Treasury Select Committee – written submission from the ‘Women in Finance Engagement Event’ held on 21 February 2018

Women in finance engagement event

The Treasury Select Committee met with 42 women from across the financial services industry (banking, asset management, insurance, consultancies etc…). They represented over 18 financial firms and included women of various seniority as well representing a mix of back and front office parts of the business.

Attendees were split into five groups and asked to discuss the following questions:

1)      What attracted you to the financial services industry?

2)      Why do we not see more women in financial firms at Board and Executive Level?

3)      What is your experience of career progression and what are the barriers you have faced?

4)      What career development and other support has your employer provided to you?

5)      What changes in firm practices and policies do you think are needed to support women in the industry?

Finally, attendees were asked to make recommendations that firms, regulators and/or the government could take forward to ensure that greater proportions of women are represented at the Board and Executive level of financial firms. The key themes that came out of the discussions are outlined below.

The financial services industry has many selling points

Attendees came to work in the financial services industry through a range of routes. Some came from law, journalism, marketing, accountancy, tax advisory, and science sectors.

There were a range of reasons why attendees were attracted to the industry, including getting to work with bright and motivated people, being able to see what value you create for the business and getting to work with interesting clients. Some were attracted to the industry due to the high salaries, others joined as they wanted to work in an international setting. Many were attracted to how challenging the industry was. They saw the industry as dynamic, high energy, and an exciting place to work. They welcomed the opportunity to work with highly motivated and skilled colleagues and felt that the industry provided them with the opportunity to develop transferable skills.

Some recognised that parts of the industry were male dominated and this had not put them off wanting to work in the industry. Most found that there was a balanced in-take of women at junior levels, but started to notice they were the only woman in the room as they reached more senior levels.

Barriers faced in progressing beyond middle management

There were a range of reasons given for why women are not making it to Board or Executive level and it was felt that there was no one ‘silver bullet’ that would reverse this trend. It was felt that part of the problem was a legacy issue – with very few women entering the industry in the 1990s resulting in a small pool of women with sufficient experience to fill senior roles.

Attendees also considered that the expectations of women and the prevailing culture in the 1990s may also have meant that this cohort were less vocal about women’s progress in the industry than the current generation. Many expected that the current and future generations of women will experience improved prospects, having grown up in a different culture with very different expectations of what they can achieve. However, it was felt that material barriers to women progressing beyond middle management were likely to remain unless they are pro-actively addressed. The Committee heard that ‘letting things evolve naturally will not work’ and that a ‘more radical approach is needed’.

The discussions revealed that attendees felt they had come up against a range of barriers when progressing their careers. They felt that:

• Unconscious biases can favour men and work against women in the workplace
• Confidence levels of women and lack of role models are holding women back
• Culture and networks within firms can provide more progression opportunities for men than women
• Quality of line management is often poor, in particular when it comes to spotting and promoting female talent
• Flexible and part-time working is often viewed as a ‘female thing’ and can act as a barrier to career progression
• Maternity leave and returning to work present challenges

Attendees identified a range of actions that could be taken forward to address these barriers

• Everyone at all grade levels (but particularly middle managers) should have inclusion and diversity objectives directly linked to pay (for example, senior men could be required to mentor junior women, middle managers should be required to build gender balanced teams etc…)
• Coaching and training for women and managers should be available across financial firms. In particular, managers should receive training on unconscious biases as well as training to raise their awareness of the specific barriers women are likely to face throughout their careers. They should also be trained on the potential impact of life events (such as starting a family) on women’s confidence levels and how these can impact the decisions they make about their careers, including at times being more reticent to put themselves forward for promotion.
• All staff should be encouraged to make use of flexible working and senior men should role model flexible working patterns to combat the perception that it is a ‘female thing’. It was seen as important that men take up flexible working and shared parental leave so that it becomes ‘normal’ for men to work flexibly in order to take on family responsibilities. There was also the hope that if more people took up flexible working patterns it would change the culture of firms so that performance was judged more by outcomes than being ‘visible’.
• Having a diverse range of women at senior levels was expected to have a material effect on improving women’s confidence and encouraging them to put their name forward for more senior positions and to reach out and ask for help.
• Recruitment panels should be gender balanced and senior management should play a greater role in challenging incidents where no women are shortlisted or where teams are not sufficiently gender diverse – managers should be required to explain such outcomes.
• It was also felt that the Government should incentivise firms to take diversity seriously, by providing tax relief for corporates that meet diversity and inclusion targets. It was also felt that such an initiative may attract more firms to the UK.
• There should be more transparency about pay and there should always be wide advertisement of all senior roles. The requirement to publish the gender pay gap was welcomed, but should be reported at a more granular level (grade, specific departmental functions)

Key points made under these areas summarised below.

Unconscious biases

It was viewed that unconscious biases are prevalent in the workplace. There are a number of key areas where it was felt they acted a key barrier to career progression for women:

• Assumptions made about what a woman wants from her career

It can be the case that managers do not present all career opportunities to women because they are making judgements and assumptions about what opportunities they would be interested in. For example, not asking a woman with a young family whether she would be interested in a role that involved lots of travel. It is important that these opportunities are communicated and discussed openly with female direct reports so that these assumptions can be tested.

• Similar behaviours by men and women are often interpreted differently

The same behaviours used by men and women are often interpreted differently. For example, men making strong arguments confidently is seen as demonstrating their competence as a leader, whereas when a woman exhibits similar behaviours they are viewed as aggressive and difficult. One attendee said that she had felt she was exhibiting very similar behaviours to those in her team (mainly men). She received feedback that she was being ‘too aggressive’.

It was also felt that women are less likely and not as comfortable lobbying or reaching out for opportunities. Part of this was due the reactions they got when they did lobby for opportunities. For example, some attendees said they had tried to do this, but felt that it was viewed as ‘unbecoming’ from a woman, but expected of a man.

• Men tend to recruit in their image

It was felt that men tended to hire in their image. The general view was that women are less likely to do this and are much more mindful of fairness. There was a perception that men promote who they know. To combat this, recruitment panels should always be gender balanced.

• Client and investor biases also matter

There was an example of some investors being uncomfortable with putting money into a hedge fund run by a woman. Client demands and biases can also have implications for female career progression. However, it was also acknowledged that these groups can be a powerful driver of change when, for example, they recognise the value added by having gender diverse senior teams and they demand this from the firms they choose to invest and/ or work with.

Confidence and lack of role models

It was felt across the board that senior female role models are very valuable. Having a diverse group of senior women can encourage junior colleagues to aspire to progress their careers and encourage them to put them name forward for promotions. The power of role models is greatest when more junior colleagues can see senior women that ‘look like them’. If they don’t see women, like them, with similar childcare or other responsibilities or even personal character traits (for example, exhibiting more female traits) this can cause them to doubt whether they would be able to be successful in a senior role.

In some cases, it was felt that many women who succeed in financial services are those women that have adopted - what may be referred to as - ‘traditional’ masculine traits or the prevailing ‘dominant culture’ within the firm. More junior women often do not identify with these women and do not feel that they can approach such senior women for support and advice. This can put them off progressing their careers within the industry.

Many attendees also felt it was important to see more male role models in senior management doing things like taking up flexible working and shared parental leave, and visibly being seen to be taking on family responsibilities. This was seen as important at combatting the perception that ‘flexible working’ is a ‘female thing’. It was also thought that it could help change the culture of organisations, so that presenteeism and ‘being visible’ become much less important that the outputs you deliver.

In terms of confidence, it was viewed that women were more reticent to put themselves forward. In instances where they do not get promotions, it was thought that women were more likely to internalise and criticise themselves, believing they were not good enough. It was suggested that men were less likely to do this. They were viewed as recovering quickly from such setbacks, seeking an alternative promotion or leaving the organisation for other opportunities. Firm cultures should be mindful of such differences.

There was a view that the culture within firms needed to change to appreciate diverse sets of personality traits, rather than women feeling they must emulate more masculine behaviours and holding the view that the can’t succeed by ‘being themselves’.

Culture and networks

The legacy of ‘male informal networks’ prevail and can be part of a financial firm’s culture. For example, a range of informal networks for men still exist such as men going golfing, drinking and enjoying sports-related activities together. These activities were viewed as less appealing to women and felt exclusionary. It was also felt that many men who work in the industry have partners or wives that stay at home and look after the kids, which allows them more freedom to attend social events that gave them more exposure to senior management. This was also seen to allow men to more readily identify mentors and sponsors, that women don’t have the same opportunity to approach and secure.

Another barrier to women securing exposure to senior management, was concern that if they approach a male sponsor, there may be suggestions of impropriety or favouritism.

Concerns were raised about the culture of the industry. Within the industry, there is often a focus on ‘what you achieve’ rather than on ‘how you achieve it’. Appraisal processes focus on these ‘hard money’ outcomes, with bonuses and pay being linked to them. This, it was felt, contributed to cultures within the industry that were more aggressive, competitive and less collaborative than in other sectors. It was felt that bonuses and pay should also depend on exhibiting the ‘right’ behaviours and this may go some way to addressing this culture.

It was also mentioned that the culture of firms was such that physiological challenges women face, such as menstruation and menopause are never discussed openly and are taboo subjects. Some felt these ‘facts of life’ should be openly acknowledged so that women feel they can seek support when needed.

Quality of management

There were some examples provided of high quality line management being a key driver of why some attendees felt they were able to progress their career. For example, one woman was able to secure a promotion the first time she went on maternity leave and a pay-rise the second time. She attributed part of her success to her line manager, who supported her, encouraged her and was pro-active at spotting opportunities.

However, it was felt across the board that management was poor at spotting and promoting female talent. For management to take gender diversity seriously, it was felt that those in management positions needed to be have specific inclusion and diversity objectives as part of the appraisal and these needed to be linked to their base salary.

One attendee suggested that ‘firms seem to have lost their way when it comes to training and cultivating people’, noting ‘there is not enough investment in management’. Some attendees suggested that management should be trained on unconscious biases. It was seen as important that managers do not make assumptions about women, their career, their willingness to travel or take on novel and difficult projects. Training should encourage managers to challenge these assumptions and encourage managers to raise all opportunities with their female direct reports, check whether they want to pursue them and discuss what support could be given to help them, where it is needed.

It was also felt that middle managers should receive awareness training on the specific challenges women face throughout their careers. For example, confidence dips that women can feel when going on maternity leave, dealing with concerns they may have returning to work, balancing work and family responsibilities, impacts of menstruation and menopause etc… This would allow managers to better support women but also combat any negative implications that these experiences can have on women’s career related decisions and their willingness to put themselves forward for promotion.

Good quality management is also important at ensuring that women are taking on the range of roles and experiences that they need to be able to demonstrate they can meet the job criteria for senior roles. It is often the case that there are lots of women in support functions; however, to progress they need exposure to front line or profit and loss roles.

In addition to training for middle management, it was suggested that senior management should provide more oversight and challenge to management in a number of areas, for example:

• Ensuring that recruitment panels are gender diverse
• Challenging managers of teams that are not gender diverse and / or challenging instances where no women are applying or being shortlisted for roles. Managers should be asked to explain how such situations have arisen and justify whether the processes used had been fair and unbiased.

Flexible working can be an obstacle to promotion

It was felt that caring responsibilities – either for children or aging parents – still disproportionately falls to women. A larger proportion of women than men take up part time working and other flexible working arrangements. This can put women at a disadvantage as they do not have the same visibility as their male counterparts. The presenteeism culture can mean that women are penalised for taking up flexible working opportunities, they can be overlooked for promotion or as a consequence they are not given sufficiently high profiled opportunities that would allow them to secure a promotion.

As mentioned above, it should be the case that men are encouraged to also take up flexible working, and that more senior managers should role model flexible working patterns. One attendee said she required her team – both men and women - to work from home a day a week.  Such initiatives were felt to be effective at ‘normalising’ such working patterns, and making it less of a ‘female thing’.

Transparency about pay is often lacking

Pay structures and internal promotion processes in firms can be opaque. Many felt that the requirement to publish gender pay gap data was a positive step. However, there was concern that reporting of gender pay gaps at an aggregate level hid disparities in certain parts of the business. Some suggested that gender pay gap information should be reported at a much more granular level, such as by grade, by department, function and split between back office and front office functions. It was felt that this would shine a greater light on certain parts of a firm that are not doing so well.

Some also felt that more pay transparency within the organisation would also be helpful. One attendee was aware that a male colleague in a similar role as hers and with much less experience was getting paid significantly more than her. More transparency on this would help ensure that such discrepancies are challenged.

It isn’t just transparency of pay, but some noted that senior roles are not always advertised transparently. There was concern that this reinforced the likelihood that men recruit in their image.

Maternity leave and returning to work present challenges

Generally, it was felt that maternity leave was not a big barrier to career progression. However, some noted their frustration that time out of work means you miss out on opportunities and male colleagues can start to overtake women. It was also suggested that maternity leave usually coincides with those points in a women’s career when she is thinking about promotion. Taking maternity leave can hinder career momentum. It was suggested that this contributes to women progressing at a much slower rate than men.

Other concerns about maternity leave focused on returning to work. Returning to work can be difficult, not just because you are coming back potentially to a new environment, but also because you now have a child to think about and have many more decisions to make in relation to managing a household as well as your work. One attendee said ‘there is only so much capacity your brain has to make decisions each day and when you have children it often falls on the women to make decisions related to their care on top of your day job and this can be challenging’.  In addition to this, finding quality, reliable and affordable childcare can place additional stress on those returning to work.

There was concern that in some cases when women come back from maternity leave they are given more junior (or less challenging) roles. It wasn’t clear how prevalent a problem this was.

Attendees also felt that having children changed how they were perceived in the work place. Some felt the amount of maternity leave they took affected how seriously they were perceived to take their career. Some felt that men that take leave for caring responsibilities also faced stigma about how seriously they take their careers. This can impact the uptake by men of initiatives such as shared parental leave and flexible working.

Some suggestions were put forward that might alleviate concerns about maternity leave included: encouraging men to take up shared parental leave; one to one coaching before going on maternity leave; training for managers so they were comfortable talking about anything pregnancy related issues, including issues related to returning to work; and finally it was suggested that voluntary courses and training should be available to women on maternity leave, so they can continue building on their skills and confidence while out of the workforce.