Walking the talk – How to reduce the gender gap in fintech

Women and men, despite being equally capable, have historically not been treated that way. Although it was unfair that it had to be done this way, women have proven their strength and resilience, succeeding over the last 100 years in pushing for the right to vote, have equal rights with men and stand as equals. Today, this movement is still ongoing, but is now more focused on reducing the gender gap in the workplace.

Over the past few years, we have seen a newly coined term, “She-cession,” due to how the pandemic disproportionately affected women in the workplace compared to men. According to PwC, of ​​the 15.3 million people who lost their jobs in the UK between July and October 2020, 52% were women despite women making up less than 50% of the workforce. During the pandemic, women’s jobs were overall 1.8 times more vulnerable than men’s, which has resulted in women’s progress in the workplace being set back for years.

The Broken Rung for Women in Finance

The financial industry for women is an interesting but somewhat disheartening thing to look at. Women have a strong representation within the financial industry, making up 66% of leadership positions in talent and 48% in marketing and business development. However, these roles are not usually part of the path to becoming a CEO. On top of that, women actually outnumber men at lower levels, but that quickly reverses on the way up the corporate ladder.

The exact problem is hard to pin down, but the general consensus is that for one reason or another, women are given fewer opportunities than men. This problem is so widespread that McKinsey coined the term “the broken rung” to refer to the fact that women and men are promoted to leadership at vastly different rates. According to the Women in the Workplace 2022 report, only 87 women are promoted for every 100 men who are promoted from entry-level to management roles. This may not seem significant at first glance, but this leads to a domino effect that continues to the upper levels, resulting in what was seen in the United States in 2019 with only six CEOs being women out of the 107 largest public financial institutions.

The importance of women in leadership

An HBR study conducted in 2019 showed that women scored higher than men in many different aspects of leadership, including willingness to take initiative, resilience and drive for results. Does that mean women are inherently better leaders? Or does it mean that the women in these positions must be extremely exceptional compared to the male equivalent? Although the answer is unclear, the latter seems more likely.

No matter how good a leader a man may be, women have a clear advantage in this aspect – the effect they have on women in the workplace and in industry. A woman in leadership can be a strong role model for others and be a motivator for other women to strive for the same goals. Studies have shown that women have a harder time promoting themselves compared to men and also tend to score their own performance lower. According to the PwC Workforce Hopes & Fears Survey 2022, women are less likely to feel listened to by their managers. However, having a woman to look up to as a role model or talk to for mentorship can help other women learn to value their skills and make them feel listened to by decision makers.

The big break

It is now more important than ever to learn how to retain and increase the number of women leaders in a company. Workplaces are currently undergoing a “Great Breakup” where female leaders are looking for companies that are more in line with their values.

An important reason is to have a flexible work schedule or a hybrid workplace. Women are expected by society to be the primary caretaker, and although this is changing, the societal changes are slow to take root. Flexibility is important because if women are expected to do most of the childcare, they should be given the opportunity to do so comfortably.

It’s also important for employees to feel valued by their company beyond the money they bring in, and a strong DEI initiative can do just that. Female managers look for companies that, through their initiatives, are actively making cultural changes and improving the workplace for women. It can be a powerful motivator and empowers many who are looking for new opportunities.

Having a woman in a leadership role who leaves the company can also be dealt a heavy blow, as their departure can be a signal to the next generation that something is wrong. Could it be due to incorrect handling? Headwinds that prevented progress? The next generation will begin to ponder these questions and, if not addressed, may cause them to follow suit to look for new opportunities.

Ways to retain and grow

The best way to reassure the next generation of women leaders is to have thoughtful and comprehensive DEI initiatives that let these young women know they are valued by their employers. These DEI initiatives should include plans for mentoring programs, fair pay and benefits, and a focus on lowering barriers for women.

Mentoring programs are a relatively effective way to educate and prepare young women for what lies ahead. While many will naturally find a mentor in their workplace, there is no guarantee that everyone will. Through a female mentoring program, young women can be guaranteed a level of guidance from a woman in leadership and learn to navigate the specific challenges women will face.

It is also important to ensure that people in the company have fair wages and benefits. Unconscious bias can lead to a gap between men and women, and has even led to 7% of women being less likely to be satisfied with their pay compared to men. So it is important for companies to reassess and revise these potential problems. Offering hybrid work and flexible schedules are also effective ways to ensure employee satisfaction and can show women with young children that they are valued in the company.

Another important step in ensuring a safe and productive environment for women is to educate employees about unconscious biases and microaggressions. Since unconscious bias, by name, is an unintentional judgment that people make, education is a necessity so that people are aware that the seemingly harmless statements and thoughts they have are potentially harmful. This will also help reduce microaggressions caused by well-meaning men and help create a fair workplace for women.

Only through the mentoring programs, ensuring fair wages and benefits, and educating employees, will the “broken rung” on the corporate ladder slowly be repaired. Implementation of these programs and initiatives can not only help retain women in management, but also attract others looking for better opportunities.