By Cathy NestrickThe pandemic negatively affected the world’s benchmark to achieve gender parity—increasing the timeline from 100 to 132 years. ABA is on a mission to accelerate this timeline with its bold vision of equitable pay and advancement of all women, including women—of all races, backgrounds, abilities, and sexual orientations—through a new Women’s Leadership Initiative.
More women than men pursue banking careers, but as with many industries, women are concentrated at the lower levels of their organizations. Women’s numbers shrink beginning with the very first promotion—a phenomenon dubbed the “broken rung” by McKinsey. The firm’s 2022 research shows that for every 100 men promoted to junior manager in financial services, only 87 women are promoted. The “broken rung” is puzzling, because women earn more college degrees than men, and Black women are the most educated demographic group. It follows that women should receive more promotions than men, but the opposite is occurring.
With fewer women at each advancing level, women comprise only 31 percent of the financial services C-suite, according to McKinsey. From new hire to C-suite, the representation of women of color drops by 80 percent. Only 4 percent of the financial services C-suite are women of color.
Women with intersecting identities face more barriers as compared to white women, according to the 2022 Women in the Workplace report from McKinsey. LGBTQ women and women living with disabilities report the highest incidence of acts of exclusion. Black women are the most ambitious demographic in the U.S., but one in three say they have been passed over for advancement because of their race and/or gender. Latinas and Black women are less likely to say that their managers take an interest in their advancement, and they report being penalized more for mistakes. Asian women and Black women report having fewer allies.
The good news is that there are practical and cost-effective solutions that banks of all sizes can implement to advance women equitably. Here, we’ll focus on three attainable solutions.
Give honest and actionable feedback
Women receive less honest and actionable feedback compared to men for two very different reasons. First, feedback for women tends to focus on personality and appearance and not on skills and performance. According to research by software executive Pratima Rao Gluckman, women were told they are “too aggressive” three times more frequently than men. Women with intersecting identities are even more likely to receive this type of feedback. For example, Black women with natural hairstyles were rated as less professional than Black women with straightened hair, according to a study from researchers at the Duke Fuqua School of Business.
Additionally, some managers fear that by being honest and direct, a woman may become emotional, which is an incorrect gender stereotype. Men are just as emotional as women are, and we should not fear natural, emotional responses.
Feedback lights the pathway towards development, promotions and pay raises. The next time you give feedback, ask yourself whether the advice is honest, focuses on job performance and gives guidance on how to improve.
Standardize your promotion practices
Women tend not to apply for jobs unless they meet 100 percent of the job requirements. Remove those “requirements” that aren’t really requirements, or at least move them to a “preferred” section. Also, be mindful of the language you use. Women may not apply for a job seeking an “aggressive” or “competitive” candidate. Certainly, many women think of themselves as “aggressive” and “competitive,” but you will limit the number of women applicants with this language. Either remove this language completely or replace it with terms such as “knowledgeable” and “good communication skills.” If you need help, upload job descriptions at genderdecoder.com, which is a tool that can help you eliminate gendered language.
Next, post the job opening so that everyone has an opportunity to apply. Too often, people make assumptions about a woman’s interest in advancement, or if she is a caregiver, whether she has the time for a role with more responsibility or travel. By posting the job, people can decide for themselves what they want and can handle. You will also avoid the appearance of favoritism. When jobs are not posted and someone is tapped for a promotion, it often creates the appearance that there is an in-crowd, which runs counter to creating inclusive cultures.
Finally, use diverse candidate slates for promotions. If you have an opening for a customer service manager, for example, a small bank could create a slate of two or more candidates which includes at least one woman, and a larger bank could create a slate of five or six candidates which includes at least two women. When slates include at least two or more women, the likelihood that a woman will receive the role increases significantly.
A unique challenge faced by many women is the arduous balancing act required to be both a caregiver and a breadwinner. Women are 75 percent of the 43.5 million caregivers in the U.S. Full-time working women spend one more hour each day on household chores as compared to their male counterparts, on average. Women in financial services senior roles are 7.5 times more likely to be responsible for all or most of the household chores as compared to their male peers.
One solution is to normalize requests about taking time off for caregiving—which can include not just children but also adult family members with special needs and senior family members. Leaders can help normalize these conversations by talking about their own caregiving responsibilities and showing empathy and understanding when an employee needs time away to handle these tasks. Caregiving often needs to happen during working hours, as doctors and schools are only open during the day. Employees need the flexibility to both work and take care of these daytime caregiving responsibilities.
Finally, rethink the value of caregiver employees. Research has shown that people grow transferable skills by caregiving such as leading with empathy, negotiation skills, time management, listening and communications skills. Banks can use these skills by considering caregivers for roles where mentoring, coaching, collaboration and team building are required. By focusing on the value that caregivers bring to the workforce, we can transform cultures so that caregivers are not just supported but celebrated.
Focusing on women is not only the right thing to do, but it is increasingly a business imperative. People want to work in environments where they are respected and treated fairly. Further refining your equitable strategies by retooling how you give feedback, standardizing your promotion practices and supporting caregivers will attract and keep more women in the industry.
Cathy Nestrick is senior director of ABA’s Women’s Leadership Initiative and the co-founder and co-host of the Parity Podcast.