It is 2018 and women have made tremendous strides across various sectors politically, economically and socially. In North America, women account for over half of the entry-level workforce in financial services.
At a glance, one could say that women have made it and have achieved equality. Yet this illusion of equity remains far from truthful. Gender discrimination continues to dominate everyday working life, specifically in the financial-services industry.
Study after study highlights the lack of female representation in Corporate America, particularly as it pertains to management level positions. In a study conducted by LeanIn.org and McKinsey & Company titled Women in the Workplace, the gender-parity gap in finance is closely examined to determine what can be done to close the gap.
Women in the Workplace surveyed more than 14,000 employees at 39 financial-service companies and interviewed 12 female senior executives at financial-service companies to determine areas of concern and the most effective initiatives to promote gender diversity.
Statistics prove that companies with greater gender diversity undoubtedly perform better. McKinsey’s research shows that companies in the top quartile for gender diversity on executive teams were 21 percent more likely to outperform on profitability and 27 percent more likely to demonstrate superior value creation.
It makes sense that a group of diverse individuals can be extremely beneficial to a company. People who differ from the norm can offer more well-rounded views of the client—a key objective in the financial consulting industry.
Generally, women and men enter the industry on an equal footing, but research shows that women account for 19 percent of senior level positions while women of color account for only 9 percent.
Women in the Workplace went even further to determine where exactly women lose ground to their male counterparts. The findings show that women are 24 percent less likely to receive their first promotion than their male peers—despite requesting promotions at similar rates—while women of color are 34 percent less likely to make their first promotion in comparison to men.
When determining an approach to remedy the alarming disparity and unfortunate reality that exists for women in Corporate America, targeting the source can help us derive a solution.
Sally Helgesen, co-author of How Women Rise: Break the Twelve Habits That Hold You Back, defines culture as the biggest impediment to women’s success in financial services.
“Perception accounts for much of why financial services organizations have such a hard time retaining women,” Helgesen said. “Until that perception is finally dislodged, all the good faith efforts underway throughout the financial services industry to recruit, retain, and promote women will be undermined by implicit bias that remains unchallenged.”
The root of this problem directly relates to women’s confidence levels, which is directly impacted by the type of culture that surrounds us. We live in a society that roots for male success and is constantly encouraging men to aim high and take risks in order to secure upper-level positions.
Females also need this type of support in order to rise in the rankings. Women are less likely to take on risks and tend to doubt themselves, due to the nature of our society. Because of this tendency, women miss out on opportunities and continue enabling a cycle that perpetuates itself, as Executive Vice President and CFO of Principal Financial Services Deanna Strable describes it.
“Because we don’t have many females in the C-suite [Senior level positions], young women don’t see role models or potential paths towards executive-level leadership and are more likely to deselect themselves out of higher-level leadership roles,” Strable said, according to the McKinsey study.
To improve representation at every level, society must make a sincere effort to empower women, beginning at a young age. We must empower the next generation of girls to be assertive, driven and willing to take risks.
Women often hold back from taking risks because of the possibility of failure—but we must teach them that failure is a part of success. Hopefully we can educate this generation of young girls to be comfortable with being uncomfortable and to be okay with being disliked.