The financial services industry has a disparity problem.
This disparity comes in a number of forms, but the two most pressing issues are gender and age.
Whether it’s insurance or banking or any other related field, women are underrepresented in leadership roles. This is a problem being exacerbated by the influx of millennials into the workforce.
According to a 2018 research paper from Mercer, women make up more than two-thirds of support staff at the average financial services organization but only 37 percent of managers and 26 percent of senior managers. What the study shows is that female representation declines the further up the career ladder we go.
Where Are the Millennials?
For one, millennials, in general, don’t trust the financial services industry. The financial crisis of 2008, some of them say, “shaped our mindset about finance and left a bad taste in our mouths.” Moreover, millennials have different career aspirations. Those that do enter the industry typically only stay a few years before moving on to an opportunity that is more conducive with the lifestyle they want to lead.
With regard to women in financial services, the perception of an “old boys’ club” industry can be a deterrent. As recently as 2018, women in finance were saying they felt discriminated against, demeaned and objectified, according to The Financial Times.
For many in these situations, it can be difficult to report malicious cultural norms. Those that are can see opportunities dry up or be branded a millennial snowflake, according to the same Financial Times piece.
Young Women Are the Future
Still, female millennials are on the precipice of playing a crucial role in the growth of the industry.
Positioning women in key roles is often seen as a way to curb cultural norms that have led to excessive risk-taking and regulatory breaches by many organizations. Indeed, attracting more young women is being touted as a way to shift pernicious attitudes and behaviors in the industry as a whole.
But attracting these catalysts for change remains an issue.
As PWC sets out in its study, companies need to be very concerned with their reputation. In the study, they said that because the strongest candidates actively look for companies renown for their inclusiveness and diversity, financial services firms should incorporate this into their practices and brands.
It’s an idea that financial planner Daniella Rand agrees with in this interview: “It is disheartening when you discover that your values and ethics do not align with the individuals or organizations in which you have placed your loyalty and trust for a number of years.”
Flexibility is also key to attracting millennial women for important positions. Whether it’s offering employees the chance to work from home or a good maternity package, these are issues that matter to this generation.
Firms also need to rethink their succession and progression standards, specifically as it relates to unconscious biases. Studies have shown that men routinely underscore the vision capabilities of women, while other women don’t. This comes from different ideas of what constitutes vision and is an example of unconscious biases.
Comparing men and women’s promotion rates can also help root out any of these potential biases. Additionally, looking closely at appraisal scores can provide great insight into any unconscious bias that may exist.
By taking a few easy steps, financial services companies can create a more open and inviting atmosphere to attract this younger generation of female workers. And, with any hope, we will begin to see a positive impact.