With a 2% drop in number of women entering the financial sector in the US, gender diversity is a long way off
Suparna Goswami Bhattacharya
October 7, 2014: While the technology sector is struggling to shrug off the gender-bias tag from its name, there is another industry — the financial services sector — which is also finding it tough to do away with this infamous tag.
And unlike the technology sector, the problem is not confined to the top executives. Even at the entry level, investment bank employees are mainly men, according to a report titled ‘2014 Investment Banking Analyst Class’ by Vettery, a recruiting firm based out of New York, US.
Sample these statistics. In this year’s list of bankers who graduated to enter the industry, about 77.5% are males.
Also, of the total US investment banking analysts, only 23% are women. This is a 2% drop from the year 2012.
Vettery collected data of about 1,00,000 financial workers, through its proprietary data techniques, who have signed up with the site. Though it is no news that there is a dearth of women leaders at the higher echelons, the findings are important as most banks do not release any demographic information about their junior workers.
According to a research by University of Exeter, there are a number of barriers to diversity which need to be addressed before the benefits of improved gender equality can be felt. These include lack of work-life balance, paucity of role models and mentors, stereotypes and unconscious bias, among others.
Professor Diane Perrons of the Gender Institute at the London School of Economics and Political Science, in a study, said that there is a culture of long working hours in the sector. It becomes difficult for women to fit into this “masculine work culture”, as they usually have an important role to play at home as well.
Of course, there is the issue of supply as well. Supply in terms of candidates with the prerequisite background (finance/economics majors) and an interest in working in high finance for 80-100 hours a week.
Further, many women in the financial services sector cite a lack of role models and mentors in the industry as one of the barriers to their own career progression. Academic research, such as that conducted by Dr Ruth Sealy from the Cranfield School of Management and Professor David Gray from the University of Surrey, emphasises the key function that role models play in facilitating career progression. It was found that one-third of women leave the job after only eight months because of lack of role models.
Though, most banks refused to comment on the findings, one of the banks in the US said that they are making all efforts possible to improve the gender diversity, but much more needs to be done. “Managers need to reward output and not number of hours spent in office. Also, work from home should be included in a holistic manner rather than making it an exception for some employees,” says the HR manager of the US-based bank.
However, there seems to be some light at the end of the tunnel. “We’ve seen all banks make attempts to improve diversity, especially at the entry-level ranks. We are working on a number of searches for investment banking, private equity and hedge fund clients, and there is a demand for female employees,” says Alex Orn, CFO, director of analytics, Vettery.