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I was an associate in IBD. This is why women leave banking

Woman leaving banking

The numbers are out. Like many of the women who work in male-dominated industries, I am not surprised. The gap in pay between men and women in banking is huge.

Hidden within these numbers are two old-fashioned beliefs still held by many, namely that women get paid less because they take time out to have children and that women just don’t perform as well as men. Before we start, I would like to address both these myths.

Most of the women I worked with in my banking career were childless and single because of a lack of time. As they go up the ranks they start realising that even without a family life they will not be remunerated fairly and often grow disillusioned as a result. Most of the talented women I knew who left banking did so because they saw a lack of progression and opportunity. Meanwhile, senior management still maintains the outdated refrain that, ‘women leave to have children’. None of the many women I knew left to become stay at home wives. Instead, they joined hedge funds, private equity firms and VC’s in senior roles, started their own companies and sometimes switched to other industries. All of them left because they realized their ambitions and hard work were not rewarded where they were, and there was no interest from senior management to change the situation.

Statistics consistently show that women outperform men, yet the situation is the same as in other areas of banking: Men outnumber women and get paid far better. Why?

I’ll tell you why: Like begets like. Boy’s clubs beget more boy’s clubs. And consistently underpaying people will cause those people to leave your company and never rise to the senior echelons.

Now let’s have a look at how the dynamics of this play out, and what we can do to fix the situation.

1.  The boys club

They go for beers. Take each other out golfing, or cricketing, or lunch. They help each other out, introduce each other to their clients, colleagues and present incoming career opportunities. They also vote for each other to have the best bonuses when review season rolls around. In the meantime, the women are still in the office, working hard, unseen, unheard, unappreciated by the guys at the pub talking sports and business over beers. #Metoo may have been a shock to the world at large, but to the women I know, the only shock was that the world actually listened this time. From experience, we have learned not to go for drinks with men we’re not dating out of fear of harassment, not to ask for help or favours lest these are expected to be ‘repaid’ and to prove our worthiness by working harder than everyone else, leaving no time to actually build our network. The solution is obvious: integrate women into the boy’s club. The process however is not. Is the man supposed to invite a woman out for a drink, fearing a #metoo style accusation? Or is the woman supposed to make the first move and boldly ask for time and help in a society which tells her she must be passive, quiet and never make the first move?

2.  The review process

Out of the boys club, the review process is born. At most financial institutions, reviews are about getting a group of senior (read: raised in the conservative 50’s) men, and ask them to group-think their way to a relative ranking for each employee. What happens too often is that the women are not visible enough to be voted, ‘the best,’ by everyone in the room, and the lowest common denominator wins. That often means the networker who gets along with all those senior men.

3.  The client relationships

Banking as most other careers today is a social game. You climb the ladder based on the strength of your professional relationships. In the absence of those relationships, everything becomes an uphill battle. If you can’t golf with the seniors, you’ll just have to outwork everyone. If you’re not invited to client meetings you have no way of building relationships with those clients. In the absence of a strong network, your next position will have to come from your own legwork and not through recommendations from your friends. To change this situation, women need their own version of the boy’s network. The problem is, there are not enough powerful women around to make the ‘women’s network’ a true equivalent to the power and reach of the boy’s club. This is also why all those corporate ‘women’s groups’ fail to create real change.

4.  Senior management

At my previous job I conducted over a 100 interviews with women at the firm, many of whom already had one foot out the door, about what could be done to retain more women. The answers were very similar: increased pay transparency, clarity on career progression and bonuses, and mentorship from the seniors. When I presented the findings to senior management I was told that none of this was true and that in fact, the women are leaving because ‘they want to raise children’. I believe the situation is similar at other firms, with opinions help by senior men on women’s motivations taking priority to actually asking the women themselves, or at least believing them when they speak up and taking their proposed solutions seriously.

The truth is, solutions already exist to change the status quo, often in the shape of new technologies. Howamigoing is a platform that allows employees to provide feedback to each other in real time, and to collate that feedback in a transparent and objective way, eliminating the need for a single end of year review that forces rankings into a popularity contest. Mavenli allows you to create open, flexible and efficient systems to enable all employees to build their network and find the right mentor without awkward cold intros or confusing invitations to drinks and dinner.

I hope that more firms will utilise the new technologies that will help them support their people to achieve everything they are capable of, to get fair and timely feedback and to ask for the advice and support they need to become the next generation of senior leaders. Until then, the women will keep voting with their feet.

Sacha Nitsetska is a former investment banking associate at J.P. Morgan and CEO of http://mavenli.com/, an app that uses machine learning, big data analytics and gamification to connect mentors and mentees in the workplace. 

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com
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Comments (23)

  1. Awful article, obviously written by someone passed over for promotion by someone more capable. Typical Obama supporter

  2. “Statistics consistently show that women outperform men”. Do they really? Which studies? In which measure? In what significance? Sources?

  3. Clearly a junior who hasn’t grasped the political dance that is required to progress at a major corporation, whether male or female. Nonsense article.

  4. Fed up of seeing people blaming their circumstances. Whether it be gender, race, their boss or the current political situation. Success takes hard work, complaining won’t get you anywhere.

  5. Yes, what are the sources of the assertion that “Statistics consistently show that women outperform men”?

  6. If the author of this article is saying that she interviewed 100 women and not one of them suggested that leaving to have and raise children was a reason for women leaving the bank, I would be inclined not to believe this.

  7. Another feminist victim!! And yes, I want to see the sources where women consistently outperform men. That hasn’t been my experience and I have worked on Wall Street for 15 years. This is a typical bitter, glass half-full, negative woman. Does she realize how lucky she is to be working at J.P. Morgan? Apparently not…negative people never see the positives in a situation such as hers. And if she thinks the atmosphere is that bad, then why are so many women still working there and thriving??

  8. I’m glad your solution to the supposed problem doesn’t involve needless gender based legislation. However, most of the situations you describe could affect any man who doesn’t like sport or drinking. A lot of men don’t want to be part of a ‘boys club’ either.

    The mistake of attributing gender difference to pay inequality (if there is such a thing!), rather than personality traits dominates current media discourses. I suggest you undertake a multivariate (more than one variable) analysis if you want to understand this issue.

  9. Seriously? Many of the comments I have seen in response to this article, merely support the author’s position that senior managers in her firm have preconceived, biased notions about women, their work ethic, and their motivations, and will not consider any other perspective. How many of these harsh commenters have a) worked in the banking industry, and b) are female?
    I immediately recognized what the author was sharing, and I can tell you that it is not just the banking industry where females face this institutional gender bias. I worked in a public institution in Ontario, Canada, where hard-working, intelligent, qualified women were routinely told that they were not qualified for management positions, and then less qualified men, or completely unqualified men, were not only given the position, but allowed to spend two years acquiring the educational qualifications to hold the position. They often spent the first two years of the job taking post-graduate classes and earned their masters degree behind a locked office door during the day using the work computers, and work time. These men then left work each night refreshed and able to attend social networking opportunities, and spend relaxed time with their families.
    The union reps that are supposed to represent the 80% of the workforce that are women, are 95% male, and adopt the same attitude as the male managers. They won’t even allow women into the meeting rooms when negotiations are taking place, to hear first hand how well they are being represented. Everything happens behind closed doors. All one has to do is stand outside of the door and listen to the old boys club laughing and carrying on in there for hours, only to emerge somber faced with bad news that there just isn’t enough money to improve wages or benefits for the female workers. And then Managers are given 30% raises the very next year, plus bonuses around the board. Any woman who manages to make her way into a middle management position, knows very well that to go against the status quo is professional suicide. The slightest push in the wrong direction (for women’s equality rights), and she is axed.
    So what is the solution? Whatever it is, it will need to be drastic in order to be effective at turning things around in our society.

    Reality check needed Reply
  10. As a male in his 50’s I should take offense of this article but I found myself agreeing after reading the first 7 comments that go to prove the writer’s point. Wow, you guys really are living with blinders on.

    Yougottobejoking Reply
  11. I have been a working woman for 35 years. I do think woman work hard. I am also sick of people blaming race, gender and so on for problems. I left a great job, because I thought I was not treated fairly when it came to money or promotions. This is what is drilled into your head as a woman. I wish to God I never listen to all that stuff and stayed in that job. It was the best job I ever had. Sure men were in charge, but you know what they were calm, non judgmental and fun to work with. Women I find are more jealous, backstabbing, trouble makers, complainers then men. When I talk with other woman, they would rather work for a man, so what the truth here. I also find that when a woman has a baby and would like to cut back her hours, its the woman who say no to this. I have been in management and I am all for supporting moms, people with illnesses and caregivers. You can make the above work, but people don’t want to take the time or don’t give a crap about people. It was a shock to me, to see woman treat woman so bad. I thought woman were the one with compassion.

  12. Not sure how the first 7 comments prove the writer’s point. Asking for sources of information and questioning some of the author’s reasoning, as presented in the article, would seem fair comment.

    Shemighthavebeenjoking Reply
  13. As a black male in a BB front office role for over a decade, I stand the risk of being called an uncle tom for this, but she’s absolutely delusional and I am glad shes is out, she is the type that makes it hard to minorities and women to get hired in the first place out of fears we would incite crap like this. She said herself that she would turn down invitations to potential networking outings out of fears that she might be harassed and that she wouldn’t ask for favours in fear of having to “repay”. Did she expect that after not socialising and getting to know the team they would just accept her over someone they have been friends with for years, whether they are black/white male or female, the chances are slim. She pointed out the metoo movement has made men wary of asking for a drink or lunch out of fears of being called out for hinting at harassment, well whos fault is that then. as I mentioned before recruiters are now wary of hiring some kids i am mentoring out of fears of things like this being stirred up many of whom are black females and males with exceptional talent that might be lost to the world because of people like you. And it makes my blood boil.

    You made it in, your success is your own responsibility now, from my experience and those of my friends from a similar heritage after getting through the graduate recruitment and analyst stages anything regarding race/gender/ ethnicity is out the window, completely. A woman with a sharpe ratio of 2 will be hired over that of a male with 0. I dont know anyone that is willing to lose literal billions just because they did not like the employees race or gender. And even if they have a similar PnL for example, no one is going to hire a no-name kid with no one to stick out their necks and vouch for them

  14. Thank you to Yougottobejoking! You said it perfectly.

  15. It doesn’t appear that the author of the article interviewed any male staff about reasons for leaving banks, but had she done so, she would most likely have found that they would also have given “increased pay transparency, clarity on career progression and bonuses, and mentorship from the seniors” as factors which would help to retain staff. The absence of these factors is not gender specific and it would be a mistake to believe otherwise.

  16. My sister worked in a high street bank after she left school. She also said that men were offered training opportunities and she wasn’t. She left and found out the same thing was happening in her next job. So she went to evening classes paid for the courses herself and became Company Secretary.

  17. Obama supporter for sure. Another give me something for noting person. Some, not all, women try to get away with doing less because they are women. How fair is that? If you want to go for a beer then invite yourself. All they can say is no but I bet they would say yes more often than not. If they don’t come to you then go to them. Take the initiative. The #metoo issue is a very valid reason for not including women in some activities. Especially when a man is guilty until proven innocent. Ugh, here I go again. Just have a nice day people. Treat people the way you want to be treated and if they don’t treat you the same then move on. Plenty of places to go. Peace.

  18. What a useless read, usual feminazi excuses and complaints. It’s capitalism, work your way up, I work in IBD and I know lots of successful women.

  19. I continue to read articles about the gender pay gap and stereotypical reasons of why women are underpaid, i.e. leave to have kids. As stated above, many professional women don’t have children, because their career comes first or they choose not to juggle both (as has been my choice), and I agree women’s hard work and sacrifice of family goes unnoticed/unrewarded. What I have come to believe (and witness firsthand at my firm) is that professional women are not seen the “primary bread-winners” or “head of household” so the income and discretionary comp paid is more “needs-based” versus merit based. Many of my male counterparts have stay at home wives (a tough job indeed), but these males get compensated higher out of consideration that they are the “primary bread-winner” supporting the household. Many of my professional female peers have husbands or partners that have lower compensated jobs (two high stress jobs/incomes is a recipe for a challenging marriage); and, these women deserve to be fairly paid despite what their husbands or partners earn. I believe that employers think of “household” income when compensating men and women and think that what a women earns is “frivolous mad money” used for cosmetic surgery or girls weekends in Vegas and their husband’s income supports the household and family expenses. Women need to be seen as equal, if not the sole provider, in supporting household and family expenses.

    sunnyinsandiego Reply
  20. @sunnyinsandiego:

    Your “primary bread-winner” point may have some merit, but it does remain the case that in some cases women do leave the workforce to have children, and that this contributes to pay differentials. And the “primary bread-winner” scenario doesn’t play out across all employers in a way which benefits males, many employers would judge viewing a male as “primary bread-winner” nowadays to be in itself stereotypical.

    Also, you seem to be saying that whenever any male is paid more than a female it is due to the male being regarded as the “primary bread-winner” and therefore, according to your argument, being compensated unfairly highly, but when females earn more than males, the females are “fairly paid”, an argument I can’t agree with.

  21. As a current VP in Investment Banking, I could not disagree more with the points expressed in this article. It is just a list of pathetic excuses from someone not capable enough for the demands of the job. Most large firms are true meritocracies and there are enough women at senior levels and in HR to ensure that real talent and hard work gets recognized, irrespective of gender.

  22. Let’s be honest, this is an ad for her own company.

    It’s an ex-associate writing about how banking needs a solution, which just so conveniently happens to be the company that she’s CEO of.

    All credibility is lost when you write about an issue then hawk your own product at the end of it.

  23. Business is greedy.Bosses are insecure. They hire and promote people who they believe will make the company money and assure the bosses continued employment. If a bisexual goat with purple fur could do that job, and be paid less, they would hire the goat.

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