Financial services - representation of women: and there’s more...

Introduction

Two further reports add to the weight behind current initiatives in relation to representation of women in senior management in financial services:

• Putting the Gadhia review and the HM Treasury’s Women in Finance Charter in context - Yasmine Chinwala
• Women in Financial Services 2016 - Oliver Wyman.

The Chinwala report is particularly interesting in that it starts to identify (in graphic format) “The sector leaders”. This, and the soon to be published names of those who have signed up to the Government’s Women in Finance Charter, will continue to highlight those who are taking concrete actions to address the problem and are seeing some success in relation to their actions.

Key findings

Key findings of the Oliver Wyman report are that:

• Female representation on Executive Committees is growing much slower than on Boards.
• The growth observed comes only from some countries.
• The mid-career exit: women enter the financial services industry with the same ambition level as men, retain this ambition for the first years of their career, and usually also have similar ambition later in their careers. However in mid-career, a significant gap opens between men and women in their willingness to make sacrifices in their private lives and in their career ambition levels. It is at this point in their career that women vote with their feet.
• The exit rates of women in financial services in the mid-part of their careers are not only higher than those of their male colleagues, but also significantly higher than in other industries.

The last two points in particular reflect the findings of the Gadhia review.

Key recommendations

The report suggests that moving financial services firms towards gender balance will require a mix of bolder structural solutions and more profound underlying cultural change.

Bolder structural solutions

• set an Executive Committee talent pipeline strategy
• provide more flexible working options at all levels, and find ways to remove the stigma associated with using them
• encourage men and women to take parental leave
• develop better returnship programs, and
• address the promotion and pay gap (likely to be driven by invisible cultural factors).

More profound underlying cultural change

• build an inclusive culture that recognises and promotes the value of diversity along all dimensions, is free from unconscious bias and therefore supports gender balance, and
• put practice ahead of theory, supporting men to support women and seeking enlightened leadership.

Tackling the challenges

The report suggests that the solutions combine three important elements:

1. Better understanding of the current state and ambition.

• develop an Internal Labour Market (ILM) map (to understand, at each level of the organisation, how many women and men are being recruited and promoted, and how many are exiting)
• perform a pay and progression gap analysis
• benchmark - compare gender balance performance not only with other financial services firms but with non-financial services firms and, especially, technology firms
• seek honest feedback - anonymous engagement surveys, interviews, and focus groups with male and female staff on Diversity & Inclusion (D&I) measures, effectively anonymised exit interviews and insights from alumni
• assess culture - identify where unconscious bias most frequently occurs, where stigma is strongest and most damaging, and who or what influences culture is essential to removing cultural blocks that prevent D&I offerings from being effective
• set an ambition and communicate it, and
• accountability can also be heightened through public disclosures, such as announcing the goal, reporting on progress in annual reports, and wider releases of gender representation and pay data.

2. Bolder structural solutions in the areas of female talent pipeline, flexible work, parental support, returnship, and pay and progression.

• Set an ExCo talent pipeline strategy.
• Delivering this will require careful monitoring of recruiting, promotion, retention, and succession planning.
• More thoughtful and courageous approaches to flexible working and family support, addressing the shortcomings of current programs. Structural initiatives should aim to:
  • address the gap with flexible work (especially for mid-level or senior roles) and remove the stigma around using flexible work options
  • get men and women to make equal use of parental leave
  • find solutions to the returnship challenge and avoid a different view women post-maternity, and
  • make sure employees know about these initiatives.
• Assess how many employees are utilising these flexible initiatives:
  • Are there cultural barriers to its utilisation?
  • Does the initiative attract the target audience?
  • Is the initiative equally used by junior, middle management, and senior colleagues?
  • Are there groups of employees that do not use the initiatives?
  • Keep track of the results of initiatives.
  • Have fewer women left after becoming pregnant?
  • Is the organisation onboarding more returnees?
  • Is the organisation losing out to competitors in recruiting the best returnees?
• Think creatively – the report suggests that interesting examples that emerged in interviews, included:
  • bringing returning mothers back as a group intake, rather than individually (to foster community and collegial support)
  • assigning buddies to returning parents
  • “in-touch” days to keep connected to staff on extended leave
  • on-site child care, with cost-free use for new parents
  • extended leave for birth, adoption, foster care, or legal guardianship, and
  • financial incentives to encourage men to take parental leave.
• Close the pay and progression gap:
  • conduct a pay equity analysis
  • closing gaps will normally require compensation processes to be made more objective and transparent, and thereby less vulnerable to unconscious bias, and
  • aim to be ahead of the regulations requiring the release of gender pay data.
• Make promotion a more objective and transparent process.

3. More profound and intangible underlying cultural change.

Cultural changes should not focus exclusively on gender inclusion:

• put practice ahead of theory - policies should act more as a guide or doctrine, with the practicalities of implementation managed at the more interpersonal lower levels: for example, by a team manager
• managers will need support to be effective
• training is key to avoiding unconscious bias - make it compulsory for management, or provide incentives to participate in the training where needed
• making female and male role models visible and telling stories also helps to underpin a culture
• support men to support women - men should not only be allowed to take advantage of parental leave and flexible work options but should be encouraged to, and
• seek enlightened leadership - who does not have to be in the C-suite, though it helps if they are.