Why financial firms should hire, and promote, more women

Focus on hiring, training, and mentoring female staff

While fictional silver screen depictions almost always show men in financial services leadership positions, women remain underrepresented in the industry, especially at the top levels. However, women bring unique talents and perspectives to the industry that can benefit companies and employees alike. Women leaders across industries are more active champions of diversity, equity and inclusion (DE&I) than their male peers.¹ Women in financial services also tend to do more than their male peers to support their teams, including providing emotional support, ensuring employee workloads are reasonable, and organizing team-bonding activities.¹

Although progress is happening, the proportion of women in leadership positions within financial firms has only modestly increased of late from 22 percent to 24 percent.³

In order to address this, financial firms must work on training and mentoring their female staff, developing a pipeline for qualified female talent, and promoting women into senior management and C-suite roles.

The broken rung

While the percentage of women and men entering financial services is roughly the same, women leave the industry in higher numbers as they climb the corporate ladder, causing higher inequality at the top. Moreover, women experience a “broken rung” at the first step from entry level to manager, where they are less likely than men to be promoted.¹ When women at the junior levels of the pipeline aren’t being promoted, it becomes increasingly difficult to equalize gender diversity at the senior levels.

Nancy Nawn, Managing Partner and Financial Planner at WatchDog Planning says that the industry is a historically male-dominated sector, but that never deterred her from embracing it.

“Early in my career, I visited the Philadelphia Stock Exchange and was so overwhelmed by the amount of men. There were no women – it was a guy’s world and that was definitely intimidating,” says Nawn. Still, she was drawn to the industry. “What I liked about financial services is that it’s very dynamic, it’s always changing and that really drew me.”

A confidence crisis

"The proportion of women in leadership positions within financial firms has only modestly increased of late from 22% to 24%."³

In the financial services industry, women often face a “confidence dilemma” as they work to prove their abilities, leading some to suffer from what’s known as imposter syndrome. Many women also encounter unconscious bias, which can impede their ability to secure new opportunities, earn recognition, and receive equal treatment.

Nawn noted that the biggest obstacle she faced in her career was not being taken seriously. “In the beginning of my career, I remember going to a meeting with a colleague who was an account manager, and I was the only woman in the room, which was very frequent. He introduced everyone in the room besides me, and that was embarrassing.”

So, how can financial firms continue to push for progress in the number of women in the industry? We’ve outlined a few ways:

1. A fair and transparent promotion and appraisal process

It’s important for companies to support women from the beginning of their careers. From entry-level to manager, companies can start by addressing unequal promotion and appraisal rates by implementing gender equity policies to hire, retain and promote women.³

At the business school and entry-levels, women need mentors and role models who can play a crucial role in their professional development, whether that’s a professor or colleague within the industry who can help guide their progression. “If women can see it, they can be become it,” says Nawn.

Fortunately, more and more nonprofits and women-focused organizations are emerging to fill this role, such as Girls Who Invest, whose mission is to have women managing 30 percent of the world’s capital by 2030.

Firms also need to make sure they’re practicing what they preach. Even though 85% of financial-services CEOs say they have programs to promote DE&I, more than half of women in financial services believe an employee’s diversity status can be a barrier to career progression.² This highlights a potential trust gap between what employers say and what employees believe. Organizations can address this gap by developing targeted recruitment initiatives to build a potential pipeline of qualified diverse employees and promoting interest in financial services and STEM among women.⁴

2. A flexible and supportive culture

Compared with other industries, women in financial services are more likely to want flexibility in their work arrangements but are less likely to ask for it.¹ Therefore, it becomes imperative that leaders and organizations set clear expectations around remote and hybrid work and role model these values themselves. The Covid-19 pandemic showed that the financial services industry is well suited to support remote work. In the post-pandemic world, flexibility is no longer a preference – it’s an expectation.

"When more women are in financial services, everyone wins."

Organizations can also design flexible work models and create policies that help women balance their personal and professional lives. For many women, maternity leave and caregiving, whether it’s for children or other relatives, can impact the trajectory of their careers. Referred to as the “motherhood penalty,” many women in financial services are fearful that becoming a mother could potentially harm their career.²

“I don’t have children and got married much later in life, but motherhood is one of the biggest barriers for women working in the industry,” adds Nawn.

What financial services organizations can gain from gender equity

When more women are in financial services, everyone wins. As we move towards a different, more flexible way of working, prioritizing workforce wellbeing and implementing gender equity strategies can be a long-term differentiator.³ “A lot of people want to work with women,” says Nawn. “We’re sought after by both women and men because we’re [often] considered more trustworthy and better at managing risk. I can be tough. I can be strategic. I can be a leader, but at the same time, I can be empathetic and vulnerable with my clients.”

To achieve positive, long-lasting change, it’s important that women have support and opportunities available from the beginning of their careers. This means everyone – men and women – need to put in the work to create a cultural shift. For many, it begins with examining their own unconscious biases and listening to women.³

Financial institutions should also actively build teams of diverse members – recognizing that diverse organizations outperform their less diverse counterparts. In the end, hiring and advocating for more women in the industry is a win for employees and firms alike.