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 Meanwhile, senior management still maintains the outdated refrain that, ‘women leave to have children’.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.
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