Calling all women in business and finance: Here are 3 things you should keep in mind if you want to stay ahead of the game.
Women began to climb the corporate ladder at the dawn of the millennium, achieving significant boardroom representation for the very first time. Shockingly, 36% of FTSE 100 boards had no female members in 1999. 8 years later this figure had fallen to 24%. The numbers were improving, yes, but progress was insufferably slow. Even by 2011, just 12.5% of FTSE 100 board members were women. It wasn’t until the UK government called for 25% female board representation by 2015 that progress picked up. Today, the percentage of women on FTSE 100 boards is 29%.
Financial services firms represent a significant proportion of these FTSE 100 companies. Historically occupying roles as receptionists, secretaries, and administrators, women in the financial industry, more so than other sectors, have fought against deep-rooted barriers to gain a seat at the table. While the overall figures for boardroom representation are positive, statistics for the finance sector do, however, reveal that being invited into the conversation doesn’t necessarily mean that these women have a top role in their company.
Only 6% of financial services firms have a female CEO and, according to research by the Financial Conduct Authority, out of 9,957 partners at hedge funds, private equity firms, and other financial services companies, just 1,381 (14%) are women. Moreover, the gender pay gap is 91% for people earning £1 million plus annually in finance companies in the UK. Currently, only 400 women in the financial services industry earn more than £1 million a year, in comparison to 4,600 men.
One of the world’s largest banks and a FTSE 100 company, Barclays, is a prime example of the gender inequality within the sector. In 2017, the business reported a mean gender pay gap of 48%. On average, women at the company received 78.7% less in bonuses. The proportion of women in each pay quartile further revealed inequality; female workers made up 63% of the lowest paying positions and just 19% of the top paying ones.
Don’t let yourself be put off by these statistics. The global push for gender parity is moving the figures in the right direction, with the Financial Times reporting in October 2018 that “the gender pay gap fell this year to its lowest level on record and has been virtually eliminated for full-time workers under 40”. Successful women in finance are here to stay and we’d like to share 3 points for you to keep in mind while traversing the financial services landscape as a female.
1. Women are crucial to the continued growth of the financial services sector
Swiss investment bank Credit Suisse found that companies where women make up at least 15% of senior managers have more than 50% higher profitability than those where female representation is less than 10%. Furthermore, stats from EY show that companies that invest in Diversity & Inclusion collaborate 57% better with their teams than those that don’t and are 19% more likely to retain their employees. Achieving success in new markets is also 70% more likely for businesses that promote D&I.
It is also worth noting that US women are set to inherit $22 trillion in investible assets by 2020. As 79% of women determine their family’s monetary decisions, having female voices in finance as advisors or mentors could significantly influence the distribution of this wealth – a fact that financial services companies are acutely aware of.
Many initiatives are being put in place to increase female representation in the sector. The Rockefeller Foundation explores the issue of female leadership in the workplace and has launched the 100x25 campaign, which aims to place 100 female CEOs at Fortune 500 companies by 2025. The Fortune 500 list includes companies such as AXA, Allianz, JP Morgan Chase & Co., and HSBC. Currently, there are 25 female CEOs featured.
In addition, building on the work of the UK government, the 30% Club aims to achieve a minimum of 30% female representation on FTSE 350 boards by 2020. The figure currently stands at 27%. Led by Dame Helena Morrissey, who features on our 7 Influential Women in Banking and Finance list, the project has opened numerous chapters worldwide, including ones in Hong Kong, Turkey, and Malaysia.
2. Never be scared to negotiate your salary
According to the BBC, the average woman working in the finance sector earns 35.6% less than the average man. This can also be expressed as her taking home 64p for every £1 that her male colleague earns.
There is much debate about whether or not young women in finance tend to shy away from asking for a pay rise, believing that they are overstepping their mark. One study revealed that men are four times more likely to ask for a raise and, when women do ask, they typically request 30% less than men. Linda Babcock, Economics professor at Carnegie Mellon University in Pennsylvania found that out of 78 Master’s degree students, just 12.5% of women negotiated their starting salary, versus 52% of men. However, a research study with a much larger sample size – 4,600 workers across more than 800 employers – carried out by the University of Wisconsin, the University of Warwick, and Cass Business School found “no difference” in the rate that women and men negotiate pay.
Whether women are denied pay rises more than men, or don't ask for them in the first place, is beside the point. The truth is that men ask and usually get what they want. If you are told "no" at first, you can always challenge that decision — your male colleagues know this. Speaking to Forbes, Katie Donovan – founder of Equal Pay Negotiations — said “Women may not realise that many companies set aside money with the expectation that employees will ask for better compensation packages.” With this in mind, don’t hesitate in your decision to request what you deserve.
3. Don’t underestimate the power of building a network
Capitalising on your relationships, especially early on in your career, is key to conquering the industry. Wrack your brain, browse your LinkedIn profile, and ask family and friends if there’s anyone you already know who could give you advice. Finding a female mentor really is essential to jumpstarting your career.
Attending an event specifically created for women in the industry is another way to discover your mentor. Women at these conferences will have a personal mission to promote females in their sector. We recommend Women of The Square Mile, it will inspire you with talks from industry leaders and enhance your skills with practical workshops, helping to drive change in the UK's financial sector. Brought to you by the creators of Europe’s biggest Women in Tech conference, this event is a must for any women in banking and finance looking to smash the glass ceiling.
Remember to project your voice during networking events, monitor your pitch and enunciate. Radiate happiness and optimism in addition to maintaining eye contact with everyone in the conversation, even if they’re not talking. Once you've impressed your new contact, hand them a business card and add them on LinkedIn — it is essential that you follow up on all meaningful interactions. Making the decision to build strong connections with female finance workers is guaranteed to enrich your career, providing you with an abundance of new opportunities and a group of like-minded confidants.