Why Is There Still A Gender Gap in The Financial Sector? And What Can We Do?
What barriers are faced by women in the financial services industry – and why does this stop them progressing further? That was the subject of a recent Treasury Committee inquiry into Women in Finance. This post explores the findings of the inquiry, why there is still gender inequality in finance and what businesses can do to close the gap.
Gender inequality in business
There is a wide disparity at the top in finance, with disproportionately small numbers of women in senior roles. The Treasury Committee found that shockingly women made up just 14% of executive committees in the finance sector. On top of that, fewer that 1 in 7 partners at hedge funds and private equity firms are women. This is just an example of the slow progression women face when it comes to achieving the top roles in business.
Barriers facing women
But what’s the reason for this gender gap in the financial sector?
The inquiry addressed the barriers facing women, citing workplace culture, unconscious bias and the effects of maternity leave, as well as childcare. Male dominance and ‘boys clubs’ culture unfortunately still prevails in larger corporations, meaning women have felt held back in certain roles.
Alongside this, when recruiting senior positions, there has been evidence of unconscious bias against women as well as people of colour. Instead, organisations are more likely to recruit from inside the business and favour those already in leadership positions.
And, of course, the impact of maternity leave on women’s careers cannot be ignored. The inquiry found assumptions and judgements were negatively made against women who returned from leave – saying that some organisations even put women in roles that were less stressful and less senior.
How to redress the balance
So, how do we address this imbalance? And what can we do to ensure that more women are put in senior financial roles?
Firstly, more transparency is needed to raise awareness and address the current gender gap. This means understanding which areas require improvement and then implementing structures that allow people to achieve higher roles in the financial sector.
Creating fair opportunities for education, developments and promotions will also help. Assessments allow women to understand their strengths and areas that may need further training. With more widespread company equality, the recruitment process for senior roles should reflect more than just the alpha male environment.
All levels of diversity improve company culture, morale and employee confidence. Diversity leads to innovative thinking with access to more talented individuals and more open discussions that challenge traditional ways of thinking.
Not to mention, it will also boost business and give you that competitive edge. In fact, the Mckinsey & Company found that there is relationship between diverse leadership and better financial performance.
Here at UWM Accountants, we value gender equality and know the importance of fair business. Our team of cloud accounting experts have over 30 years’ experience and can help you with our range of accounting and business planning services. Get in touch today to find out more.