Gender disparity in the financial services sector remains a hot topic in 2024. The landscape is evolving, but is the gap shrinking or widening? Recent studies provide a nuanced answer showing a mixed bag of progress and setbacks. While there have been strides t0wards equality, there’s still a loooooooong road ahead.
According to a 2024 report by Catalyst, women now hold 29% of senior level roles in financial services, up from 26% in 2022. This incremental rise indicates a positive trend but also highlights the glacial slow pace of change. What makes this even more interesting is that across all positions in financial services, women now make up over 50% of the workforce.
In the banking sector, entry-level positions see relatively balanced gender representation, but the ascent to executive roles shows a stark contrast, as women occupy only 10% of C-suite roles in leading financial institutions. This discrepancy highlights the persistent barriers women face in reaching the upper echelons of banking.
In the hedge fund space, recent studies show both encouraging improvements and persistent challenges. According to a 2024 report by Preqin, the percentage of women in senior positions in hedge funds in the United States has increased to 19%, a slight rise from 16.5% in 2020. Despite this incremental growth, the overall representation of women in hedge funds is still quite low, especially in roles requiring high-level decision-making. A (CAIA) study reveals that only 10% of portfolio managers are women, a figure that hasn’t seen significant change over the past decade.
Private Equity shows similar “snail like” growth pace as women represent just 17% of senior roles in private equity firms across the US. In Fintech women now make up 30% of the workforce, as reported by Deloitte’s 2024 US Fintech Report, up significantly from previous years but fill only 10% of C-suite roles.
Why the significant drop-off as we climb the ladder? One key factor often cited is the “high-pressure environment” and often “inflexible working conditions” prevalent in the finance industry. We have seen those myths pretty much destroyed in the past couple of years, (especially post covid) where all genders are seeking (and have attained) flexibility.
Recent data shows that 61% of women in finance believe their gender affects their career progression negatively. In contrast, other industries such as technology and healthcare report figures of 45% and 38%, respectively. In my opinion, this perception has unfortunately become self-fulfilling prophecy, as women shy away from the finance industry and leave much quicker than they would other industries.
But it’s not just about representation in leadership. A 2024 study by McKinsey revealed that women in financial services are paid 25% less than their male counterparts, whereas the national average gender pay gap across industries stands at 18%. This disparity is even more pronounced in higher-paying roles, pointing to systemic issues that still need addressing. Across all industries, in 2024, women earned 85 cents for every dollar earned by men, an improvement from 80 cents in 2020 (U.S. Bureau of Labor Statistics).
A study by McKinsey & Company in 2024 found that companies with greater gender diversity at the executive level are likely to outperform their less diverse peers by up to 25%. The business case for narrowing the gender gap is compelling, yet the pace of change needs to quicken. The progress is not uniform across all institutions, with many struggling to implement effective changes. As we move forward, continuous evaluation and commitment to gender equality are paramount
Evidence has shown us that there is no magic cure to solve this issue. Many firms are implementing diversity and inclusion initiatives aimed at fostering a more equitable environment. Concerted efforts such as mentorship programs, supporting career development for women and changing to more transparent hiring practices can also help bridge this gap. The hope is that these programs will not only attract but also retain more female talent, thereby gradually narrowing the gender gap, but to date, the results have not born real dividends yet. And so…………. The questions remain:
- What do you think will close this gap faster, and how can firms better support women in finance?
- What steps do you think are crucial to bridge the gender gap?
- Have you seen improvements in your workplace? What worked? What did not?
- How can we accelerate these efforts to ensure a more equal future?
Your thoughts and experiences in this area are invaluable, especially if your team / firm has experienced a positive trend! Let’s discuss how we can drive further changes in our industry.
Feel free to reach out directly to discuss this topic further as well as any other questions or concerns regarding the current hiring climate. I guarantee that in our call together you will leave with 2 or 3 ideas that will greatly impact your ability to find, attract, and procure the top 10-15% of the candidate pool on a consistent basis.
