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The Number of Women in C-Suite Finance Jobs Is Going Up — But the View From Below Is Less Rosy
As more women than ever are promoted to executive roles in the financial services industry, growth at other levels has all but stopped.
Employment prospects for women in finance over the next decade appear promising for some — but much more uncertain for others.
The share of women in C-suite roles in the North American financial services industry is expected to increase from 21.1 percent to 28.3 percent from 2021 to 2030, according to a new Deloitte report that studied the percentage of women in various job categories in the financial industry from 1998 to 2021. However, the figures for categories below the C-suite level are less encouraging: The percentage of women in senior leadership roles (i.e., executive but non-C-suite positions) is expected to decline 40 basis points by the end of 2030, while “next generation” roles (that is, all the others) could see a drop of 90 basis points.
Patty Danielecki, senior manager and chief of staff at Deloitte Center for Financial Services, told II that the recent drops in non-C-suite levels stems from the fact that during the pandemic, fewer women chose to embark on a career in finance. “This is the time to take action,” she said, “because what we do now will influence what happens over the next decade.”
The lack of gender equity is especially pronounced in the alternatives industry. Only 13 percent of senior positions in the alternative investment space are held by women, according to the latest report by Preqin. That compares to 24 percent of such positions throughout the financial services industry.
In private equity firms, women account for a fifth of the total workforce but make up only 14 percent of the senior roles. Similarly, only 10 percent of hedge fund portfolio managers and 19 percent of real estate fund managers are women, according to the Preqin report.
“Until women are better represented at the most senior level in the alternatives industry, progress will be slow,” said Jaclyn Bouchard, head of ESG solutions and corporate responsibility at Preqin. In fact, in the asset management industry as a whole, women are more likely than their male colleagues to leave their employers. According to the 2021 Citywire Alpha Female Report, the turnover rates for female fund managers are 44 percent, versus 31 percent for male managers.
The progress of gender equity also differs across regions. For example, while the proportion of women employees in private equity firms has increased for the past three years in North America, Europe, and Asia, the same figure declined by 60 basis points from 2020 to 2021 in other regions of the world, according to Preqin.
In Oceania, women are expected to take 34 percent of C-suite roles in the financial services industry by 2030, up from 25.2 percent in 2021, according to Deloitte. Elsewhere, progress will likely be more subdued: In Asia and Africa, the share of C-suite women will remain largely the same, while in South America, the number is expected to drop from 11.6 percent to 7.7 percent.
“These geographical differences should be viewed within the context of the economic, socio-cultural, and regulatory environment,” said Orsolya Gal, senior stewardship analyst at BNP Paribas Asset Management. She added that firms with larger capitalization, which are more present in developed regions, “tend to integrate diversity issues more easily than smaller companies.”
There are numerous strategies designed to increase the percentage of women in the financial services industry, including setting up comprehensive diversity, equity, and inclusion programs. But the DEI programs alone “won’t be effective in getting more women into C-suite roles until they are linked to higher pay,” said Sloan Klein, a career coach for executives in the investment management and financial services industry.
Bouchard agrees, but says that companies also need to incorporate other strategies, such as “casting a broader net when recruiting women in junior positions, developing metrics to track progress, and adding gender diversity metrics to due diligence proceedings.”