MakovskyTuesday, April 28, 2015
It’s no secret that the Financial Services industry has a gender problem. Articles are published on the topic every day and various experts continue to produce studies to get to the root of the problem. According to a PwC report, women make up 60 percent of employees in the Financial Services industry, yet only 19 percent advance to leadership positions. And of that percentage, 2 percent make it to the highly-coveted CEO position.
Who’s really suffering from the lack of women leadership in Financial Services? Women may seem like the obvious answer, but financial institutions suffer too. Companies with gender-diverse leadership perform significantly better than their competition with 42 percent higher return in sales, 66 percent greater return on invested capital and 53 percent higher return on equity (PwC report) More gender-diverse companies match the market they serve and are consequently more in tune with the unmet needs of customers, allowing them to find appropriate solutions and grow the business.
To put it into perspective, research from the Center for Talent Innovation (CTI), as written up by HBR, estimates that the financial industry could be missing out over $5 trillion in potential business. Women control a significant percent of the country’s investable assets (39%) and exercise decision-making power over $11.2 trillion. Yet they are much less likely to invest. If companies had more of a gender balance at the top, they could figure out the best way to tap into this opportunity.
It seems pretty clear that having more women in power would be mutually beneficial for women themselves and the financial institutions where they work. So what can be done internally and externally to attract and sustain female talent in Financial Services?
- Support women’s advancement early on in their careers: Outline a path for career growth so that leadership positions seem attainable and female employees feel that they are valued and supported.
- Company culture needs to change, not women: There’s a widely-held belief that in order for a woman to be successful, she needs to change her behavior and adopt a more assertive demeanor. While confidence is important for both men and women’s success, the pressure should not be placed solely on women to change. Instead, companies must remove any biases and assumptions and make the changes necessary to promote women’s advancement in the workplace.
- Implement family-friendly policies: Mothers and fathers should feel like their company will be supportive should they have any type of family-related emergency. Catalyst reports 56% of mothers find work-life balance challenging and benefits of childcare are key driver in recruitment/retention. Allowing employees to work from home and giving generous paid maternity and paternity leave will attract talented female workers and improve the chances that they stay with the company. Furthermore, supporting returnees to the industry will make women more likely to return to their careers after a period of absence.
- Communicate what your company is doing to support women: If your company already has programs in place or is making a genuine effort to improve, communicate them! Make sure other potential employees and customers know that your company values and supports women.
Women in leadership is a win-win for everyone – companies perform better and women have more opportunities to lead. Every Financial Services institution should have a plan in place to attract and foster female talent, which will hopefully lead to equal gender representation in the C-suite and boardrooms.