“Women leaders are switching jobs at the highest
rates we’ve ever seen, and ambitious young women are prepared to do the same.
To make meaningful and sustainable progress toward gender equality, companies
need to go beyond table stakes.” That’s according to McKinsey’s latest Women in
the Workplace report, in partnership with LeanIn.Org.

The financial services industry is not immune from
this latest trend.  In the last few years, the sector has undoubtedly made
progress in promoting gender diversity. However, the underrepresentation of women in
senior leadership roles remains a pressing and seismic issue. Over the years,
the number of women advancing through the ranks has been consistently lower.
Cultural factors and dysfunctional leadership teams play a pivotal role.
Now, financial service companies are facing a new challenge in retaining the
relatively few women leaders they do have, leading to a pipeline problem. These
issues are even more pronounced for women of colour, exacerbating the gender and
racial disparities in leadership positions.

There is no question that female leaders are
determined to progress in their careers but encounter greater obstacles than
their male counterparts. The desire for more fulfilling work is driving women
to leave their current companies at an unprecedented rate. The frequency of
women leaders changing jobs has reached record levels, surpassing that of their
male counterparts in leadership positions.

The reasons that lead current women leaders to
leave their companies are even more crucial for the upcoming generation of
women leaders. According to McKinsey’s Women in the Workplace 2022 Report, the
desire to advance amongst young women is paramount, with over two-thirds of
those under 30 aspiring to become senior leaders. The younger generation of
women is exceptionally ambitious and places a greater value on working in an
equitable, supportive, and inclusive environment. They closely observe senior women
departing in search of better opportunities, and they are ready to follow suit
if needed.

Benefits of women leaders in FS

The advantages of having female leaders are
well-documented and extend beyond just gender representation. The presence of
diverse leadership teams has been proven to have positive financial outcomes
for companies. However, despite this knowledge, much work must be done to
achieve gender equality and inclusivity in leadership positions.

Artificial intelligence (AI) is currently a highly
discussed topic, and its relevance to the urgent need for more women in
leadership roles is evident today. Women leaders are renowned for their strong
commitment to ethical practices. In the rapidly evolving and complex field of
AI, having senior female leaders actively involved in decision-making is
crucial. Their unique perspectives and experiences bring valuable insights to
the table, resulting in a more comprehensive and well-rounded approach to AI-related
choices. Embracing diversity, including women in leadership positions, and
actively involving them in AI decision-making will foster innovation and lead
to a more responsible and ethical AI implementation, benefiting society as a
whole.

Why female leaders are switching jobs

The scarcity of female CEOs and senior leadership teams within financial
service organisations highlights the existence of a glass ceiling. Women who
ascend to leadership positions often find themselves as lone voices in a
male-dominated environment.

Women are more likely to encounter demeaning
behaviours, such as having their judgment questioned if they are working in a
boy’s club culture. A lack of female representation and a support framework can
lead to isolation and difficulty in making their voices heard, resulting in a
strong inclination to leave.

Women leaders bear a heavy workload and often lack
the recognition they deserve. Compared to their male counterparts at the same
level, women leaders invest more effort in supporting employee well-being and
fostering diversity, equity, and inclusion (DEI)—efforts that significantly
enhance retention and employee satisfaction yet are not adequately acknowledged
in most companies. Devoting time and energy to unacknowledged work might hinder
the advancement of women leaders. Furthermore, it results in women leaders
being stretched thinner than men in leadership roles.

Balancing demanding work hours with personal
responsibilities can be especially challenging for women, as they often
shoulder a disproportionate share of caregiving responsibilities for children
and elderly parents. With the recent shift in organisations seeking more
visibility in the office as the pandemic’s impact recedes, women face increased
pressure to be physically present at work. Women leaders are, however, actively
pursuing a distinct work culture. They are less inclined to leave their current
jobs than their male counterparts. They mainly seek more flexibility or
opportunities to work for companies that prioritise employee well-being and
diversity, equity, and inclusion (DEI). These factors have grown even more
significant for women leaders over the past two years.

Additional factors include:

– Intense competition. The demand for senior female talent is increasing
as companies recognise the value of diversity. Competitors may offer more
attractive roles and better support for career growth and development, enticing
women to explore other opportunities.

– The absence of senior female
role models and a limited number of women in leadership positions can lead to a
perception that the organisation does not value diversity and hinders the
advancement of women in the firm.

– Gender pay gaps still persist in
many financial service firms, and unequal compensation can lead to frustration
and dissatisfaction among female employees, prompting them to seek
better-paying opportunities elsewhere.

– Many women feel they do not have
a safe platform to voice the challenges or obstacles they face with their
current employer and fear reprimand or negative consequences for speaking
up.

– Barriers to career advancement,
such as biased promotion practices or limited access
to mentorship and developmental opportunities, can hinder women’s progress
within the organisation.

– Women in mid to senior-level
positions may face specific challenges related to ageing and life stage
transitions, such as peri/menopause, which can impact their
well-being and career decisions. Some women may experience imposter syndrome,
doubting their abilities and feeling like they do not belong or deserve their
success. A lack of understanding and support for such challenges can impact
retention.

The importance of flexible and remote work choices

For women, having the freedom to choose their
preferred work arrangement leads to lower burnout, increased job satisfaction,
and reduced attrition. Remote work is especially crucial to women, benefiting
their well-being and mitigating subtle and unintentional discriminatory
behaviours. Companies should address concerns about remote team disconnection
and invest in building an inclusive culture, as remote work alone cannot
substitute for systemic change.

How
to retain top female talent

To
cultivate a more inclusive and appealing environment for females while
addressing seismic issues and dysfunctional leadership teams, companies must
prioritise investing in leadership assessment and development programmes. This
investment can lead to the growth of skilled and diverse leaders who can drive
positive change and foster an inclusive culture within the organisation.

Managers
also hold a pivotal role in shaping the work experience of female
professionals. Prioritising people management and diversity, equity, and
inclusion (DEI) leads to higher job satisfaction, reduced burnout, and stronger
employee loyalty. However, many companies have yet to adequately train managers
to meet these expectations, resulting in a disconnect between desired behaviour
and actual managerial practices. Improved training and support are needed to
bridge this gap effectively.

To foster a conducive environment for female
leaders to thrive, financial service firms must establish a robust support
framework that includes conducting external, tailored and impactful engagement and retention programmes. These programmes create a
psychologically safe space for female leaders to openly share their concerns
and obstacles, ensuring their voices are heard and valued, without experiencing
any repercussions.

In parallel to these participant workshops, the
leadership team/line managers need to be actively involved, whilst being made
aware of the content, overarching themes, and discussions of each session,
enabling them to actively support the development and success of female leaders
within their organisation.

Participants are empowered to take ownership of
their future, understand the power of choice, and address any barriers holding
them back, whilst collaborating with their line managers to overcome challenges
and achieve collective success. This holistic approach ensures a collaborative
and supportive environment, promoting the growth and advancement of female
leaders in the industry.

Hanover’s
engagement and retention programmes

If you’re interested in learning more about
Hanover’s customised engagement and retention programmes for senior women,
please feel free to reach out to me directly.

Our impactful and tailored retention initiatives
assist our clients in achieving gender equality and attracting and retaining
talented women. Our focus lies in equipping senior female cohorts with the
essential tools to overcome obstacles and enhance their skills. Simultaneously,
we aim to empower and educate line managers to play a more significant role in
driving positive change for female talent. Our programmes aim to advance their
careers, improve their network, increase confidence, support work-life balance,
provide tools to improve communication and feedback to peer/line managers and
gain recognition for their valuable contributions, ultimately contributing to a
more diverse, engaged and successful workforce.

While investing in these programmes will drive an
impact in your business, it is one piece of the puzzle. Hanover is well
positioned to support you with alternative solutions that may move the needle
for you based on your context and unique challenges. Examples of these (not an
exhaustive list) are:

– Empowerment webinars

– Our partnership with Illoominus,
providing you with the platform to track and generate insights from your data
across your employee lifecycle. This ensures you address the right challenges
from the start and hold your business to account.

– More bespoke top-down and
bottom-up cultural interventions that will help ensure you progress your
business culture to being more diverse, equitable and inclusive, premised on a
strong foundation of psychological safety.