If you think progress has been made in terms of gender diversity in finance, you’re right! If you acknowledge that we still have a lot of work to do, you are right as well!
Gender diversity in recent years
Let’s take a look at the recent situation: in 2018, 90% of European venture capital backing tech companies went to male founders. In the Netherlands, only 13% of funding rounds went to mixed and female-founded startups. Women are not only underrepresented in the decision-making side of investments, but also as beneficiaries of capital.
In the UK as well, There is still a lack of diversity in financial firms – on average, 20% of their employees are women. In the Netherlands, a Gender Diversity Report by Fundright stated that only 17% of start-ups and scale-ups are founded by at least one female founder.
What’s more, a study published in April this year showed that in the UK, men’s median pay in the financial sector was 24% higher than women’s – a difference that is double when compared to other industries.
So, what’s all the ‘fuss’ about diversity?
Calls for diversity are not new. For years, the civil sector, governments, companies and individuals have started acknowledging the importance of better gender diversity, especially in traditionally male-dominated sectors such as the financial industry.
From startups to large banks, and from venture capital to financial planning, it is clear that we still need to continue our efforts to improve gender diversity in the financial sector, considering more than just upper-level management and boards.
Generally, studies have shown mixed results with regards to the impact of gender diversity in (financial) companies. However, most research findings do seem to support the benefits of increased gender diversity. For example, in Venture Capital, it was proven that women-led companies tend to need less resources and still deliver higher returns than men-led companies.
Stronger returns, outperformance of market benchmarks, higher profitability and positive market reactions are just some of the many benefits that have been associated with increased gender diversity in companies.
Even when keeping a skeptical, business-oriented mind, one can argue that women are valuable resources that need to be integrated and utilized in business practices in order to stay relevant in the industry and acquire talent beyond the stereotypical profiles. Furthermore, the more diverse a company’s employees, the more various insights, opinions and expertise, and the higher the chances for success!
What has been achieved so far
Despite the grim picture painted so far, we luckily see many companies in the financial sector (and beyond) setting ambitious diversity targets, as they become more aware of its importance. Thanks to these recent developments, gender diversity in finance has been improving – data from 2019 shows that in the UK, financial companies either improved their gender diversity or maintained the same ratio.
In the Netherlands as well, legislation came into force in January 2022 stating that men and women have to hold at least one third of the seats on the Supervisory Boards of Dutch listed companies. A recent report showed positive results – all listed banks in the Netherlands achieved this target.
Moreover, there is a soar in numerous mentorship and training programs, summer schools and internships that aim at introducing traditionally underrepresented groups to the financial industry. Female x Finance has been committed to bringing resources and opportunities to young women who want to start in finance. Just in the past year, Female x Finance achieved a number of 1800 members who have access to job opportunities, networking events, training and online resources in the field of finance. With the help of Female x Finance, 70 young women landed their first jobs and internships in the industry.
Improving further, and better
In general, change needs to be invested in, nurtured and stimulated by all parties involved – from financial companies to individuals who are either working in the field or looking to break into it. Here are our top 5 tips, based on our experience in the financial sector:
1. Aim at mirroring the diversity of the general population in your company
When working with the general public (and not only), it is important that your company is representative of the diversity that’s out there.
2. Consider the whole picture
The perspective taken on gender diversity needs to be broadened. Most of the time, diversity guidelines and definitions only focus on top management and board positions – but looking at the diversity of the company as a whole will provide a better understanding of the current situation. If there is no awareness about what is still to be improved, we will never make further progress.
3. Build an inclusive company culture
With the help of a diversity & inclusion expert, set clear guidelines for your team and company as a whole. Awareness among your employees is essential. Everyone needs to then enact the guidelines in order to bring real, positive change.
4. Develop an inclusive hiring process
From interviews and assessments to possible gender biases, evaluate your hiring process and use feedback from applicants to constantly improve.
5. Last, but not least: inclusive branding
Consider whether the vocabulary used in your job vacancies might attract more men than women. Think of tone of voice, pronouns, etc.
In order to play our part into breaking the gender diversity code, Female x Finance is focusing on helping young women who want to break into finance. Through their partners, they offer entry-level, junior job opportunities and through their activities and resources, they provide much needed female role models to inspire others. Because if you can’t see it, you can’t be it.
Want to be part of the change towards more gender diversity and inclusivity? Contact us to find out how we can work together.
Want to break into finance? Book your free career consult and explore our resources.
