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In Practice February 7, 2023
Financial Sector Faces Growing Return-to-Work Gender Gap
New research among financial service and insurance companies reveals women’s careers are more at risk as workplace flexibility begins to tighten.
Reported by Alex Ortolani
There’s a new gender gap emerging in the financial sector as return to office life becomes more prevalent: a flexibility gap between women and men, according to Mercer’s latest “inside employees’ minds” research.
The top three reasons women would leave their job in financial services or insurance are insufficient pay (54%), burnout due to demanding workload (33%) and lack of flexibility (28%), according to the survey. That compares to men, who listed the top factors for leaving as insufficient pay (44%), insufficient healthcare benefits (33%), and burn out (29%).
Since the pandemic, “Flexible work arrangements provided women with the opportunity to balance their work and personal responsibilities, essentially eliminating the need for women to choose between advancing their careers and caring for their families,” says Christopher Poole, Mercer’s senior director of financial services and insurance. “This realization has resulted in flex-working increasingly becoming a priority for women when they think about staying with their current employer or seeking a new one.”
While that statement could apply to all workers, among those surveyed, 34% of women said they are full-time remote, compared to only 19% of men. Hybrid work arrangements are more even, with 34% of women in hybrid arrangements and 38% of men. Implicit bias based on a person’s work-location arrangement may have a negative impact on employees, according to Poole.
“Companies should start with ensuring there are no implicit biases against those who work flexibly, whether in performance management, career opportunities, access benefits or anything else,” he says. “Doing so will mitigate some of the concerns women in this industry face—which in turn, will help improve an organization’s reputation as an employer of choice and result in lower turnover, increased engagement and a rise in productivity.”
While the gender pay gap has shown improvement over the years, it is still a key factor in women working in finance being less satisfied than men, according to Mercer’s research. When employees were asked if they are “compensated fairly for what I do,” only 63% of women said yes, compared to 84% of men.
More Than a Number
When it comes to the financial adviser space in particular, employing fewer women in the workforce is not just bad for diversity, but a detriment to the clients the industry exists to serve, says Renée Baker, head of advisor inclusion networks for Raymond James. Baker runs an annual symposium for women in the financial adviser space and notes research that shows a dramatic shift in trillions of dollars of wealth that will be controlled by women in coming years.
“When we think about this wealth transfer, we need to think about whether the advisers are representative of our clients,” she says.
Baker, who is not associated with the Mercer research, says to create change, it is vital for people in finance to see others like them working and succeeding in the industry. Raymond James’ financial adviser symposium for women will be in its 29th year when it runs in September, but the gathering is as important as ever, considering female representation in the profession has been pretty flat in recent years at around 18%, Baker says.
The symposium will be “geared toward helping women advisers be the best advisers,” she says. “What does it matter if I’m a woman or part of another group? We’re not trying to separate individuals, but [we’re] enhancing the value that they bring to the table.”
Purpose-Driven Approach
According to the Mercer research, four out of 10 women in financial services and insurance are considering leaving their current employer, which compares to two out of 10 men contemplating a move.
There are purpose-driven approaches firms can take to not lose these valuable employees, according to Poole, such as:
- Conducting regular employee listening/sensing surveys and engaging employee resource groups;
- Improving transparency across the enterprise (pay, gender, race/ethnicity, etc.);
- Utilizing organizational and market data to objectively identify areas of unbalanced talent distribution;
- Building a robust talent pipeline that extends a few levels down in the organization, by mapping talent internally and externally;
- Defining and communicating the organization’s flexible working strategy;
- Focusing compensation investments on high-performing and critical talent segments; and
- Utilizing effective short-term and long-term incentive designs to recognize performance, retain talent and align interests.
“When looking across the industry, the companies that are responding to these challenges effectively are taking a purpose-driven and human-centric approach,” Poole says.
