Attracting, Retaining and Promoting Female Talent in the New World of Finance
Innovate Finance recently conducted a survey to find out how women felt about working in the FinTech sector. According to the results, which were compiled with anonymous feedback given by female members of Innovate Finance and the wider community, 48 percent of respondents believed FinTech was becoming a more attractive space for female talent and 35 percent felt that female bosses were helpful in achieving their career goals.
While the survey results were mainly positive there’s still a major problem with the gender gap at the leadership level. Within the Innovate Finance startup community only 8 per cent are founded or headed up by women. If you look at our membership base we only have 21 female founders out of a total of 260 FinTech member companies.
One of the reasons for the lack of progression is the skills shortage in the sector. Girls often outpace boys at school but few are pursuing STEM studies that can land them top jobs in financial technology.
In fact, though we are living in more technically driven, digital economy, there are fewer women getting tech skills today than ever before.
According to Melinda Gates, 37 percent of computer science graduates in America were women in 1980s. Today, the number is 18 percent. In the UK only 10 per cent of practising engineers are women – lower than any other European country.
For women that do have the skills, many struggle to navigate their careers and stay in their jobs.
A major contributing factor often associated to the drop rate is how a woman’s career progression changes depending on the stage of her life. A women fresh out of university and just starting her career might be more optimistic about her prospects than someone whose been in the workforce for a while and trying to balance work and family life. For many, the result is often a lack of promotion, big career progression and pay gaps, and women working below their abilities.
This recurring problem has been captured in the recently published book: The Paula Principle: Why Women Work Below their Level of Competence, by Tom Schuller. He argues that women outperform the opposite sex at the start of their careers. By the time they hit their forties, they fall behind in terms of their jobs and salaries. The gender pay gap is big across all business verticals but the financial services sector stands out: it offers the highest paid careers but has the widest gender pay gap. Women earn 60p for every pound earned by a man.
Schuller suggests that pay and career blocks has a lot to do with the motherhood penalty with women still struggling to find a job that offers meaningful flexible time that also provides a path to promotion. As a result, an amazing pool of talent that could advance sectors such as FinTech is being lost.
Research published by BCG takes the argument one step further to examine the perceptions and ‘stubborn theory’ about women and their career ambitions in the workplace. In the thought provoking essay, ‘Dispelling the Myths of the Gender Ambition,’ BCG analysts describe how they received feedback from 200,000 respondents in relation to an employee survey about women and whether their ambitions were lowered once they grew older and had children. The perpetuated myth is that most women want to take a step back and spend more time focusing on their family life, but the results dispel this assumption. Data from two global BCG data sources showed that women had as much career ambition as the opposite sex1 when they started off their working life.
Women’s ambition varied, but, according to the research, ‘they varied by company and wasn’t determined by their family status. Data also showed that when companies created a positive culture and attitude about gender diversity, all women—mothers included—wanted to advance their careers.’
The essay goes on to reveal that ‘the problem is neither inherent nor related to motherhood; instead, it hinges on the day-to-day experiences of women at work. Ambition is not a fixed attribute but is nurtured—or damaged—by the daily interactions, conversations, and opportunities that women face over time.’
Indeed, changing culture in the workplace is vital to making everyone feel inclusive. There’s not much point offering flexible working hours if all the crucial decision making for the company is done on the days when women are not in the office. Also the language and behaviour that can shut women out of group engagement and bonding with colleagues –that can help support them and nurture their career growth – is also problematic.
Changing culture is a big challenge, but so much more needs be done to even get women into financial services in the first place – as well as keeping them there. Firstly, STEM skills must be prioritised in primary and secondary school curriculums and available to all students with an emphasis on coding and software skills. Second – we need mentoring programmes to encourage more women to become entrepreneurs – and this should start at secondary school to inspire the next generation of leaders. Third – we must better legislate flexible working practises to help parents – men and women- balance their work and family life. And, as mentioned before, make sure that important decision-making and ‘bonding opportunities’ occur during the times when everyone is in the office and during work hours.
Finally, we must back female talent with investment – women often see opportunities and risks very differently from me and their perspective can provide a better view on delivery and investment.
We’re seeing some positive changes. Coding schools like the terrific Makers Academy are attracting more women than ever before and returnship programmes aimed at luring women back to the workforce are also gaining popularity.
Government is also doing its part with the launch of HM Treasury’s Women of Finance Charter, where signatories agree to a series of recommendations that aim to promote women to leadership positions in financial services.
FinTech firms are in a great position to make things happen. They are starting from scratch and can create a workforce that reflects the diversity of the society it serves.
Together with their help and support from investors, education, and government, financial services can become one of the first sectors to finally solve the gender gap, and serve as an example for other businesses to follow.