Attracting more women into the financial sector isn’t just about getting them in the door, but ensuring that they break into areas where testosterone has typically been the hormone of choice.
Figures from the eFinancialCareers’ UK resume database (outlined in the charts below) suggest that there are sectors where women are still woefully under-represented. Investor relations and public relations, as well as human resources and recruitment, are predominantly occupied by women, while it’s still very much a man’s world in more technical and front office positions.
Women comprise 35.2% of all employees in investment banking and securities dealing, according to figures from the U.S. Equal Opportunities Commission, but they hold just 15% of executive or senior level positions. It’s not just at the senior end where women get a short shrift in finance, though – our figures suggest that trading, information technology, quantitative finance, private equity and capital markets are still lagging when it comes to recruiting women.
Below are the bottom five sectors when it comes to employing women.
1. Trading (15%):
Trading has always been a boys’ world, but our figures suggest that not only is the proportion of women depressingly low, it’s getting worse. Women made up 16% of the UK trading workforce in 2012, and 15% in 2013.
There are reasons to want more women on the trading floor and it has nothing to do with paying lip service to diversity. As investment banker-turned-neuroscientist, John Coates outlined in his book The Hour Between the Dog and the Wolf, testosterone that builds up in the bodies of predominantly young male traders breeds irrational exuberance, which affects their risk-taking decisions and, ultimately, leads to a market bubble. A simple solution, he says, is to have more women (and older men) on the trading floor.
The problem is not unique to investment banks. A January study by professional services firm Rothstein Cass suggested that hedge funds run by women produced a net return of 8.95% to September 2012, versus 2.69% on the HFRX Global Hedge Fund Index. “Women investors to be more risk adverse, and therefore potentially better able to escape market downturns and volatility,” said Meredith Jones, director at Rothstein Kass.
Despite this, there’s still a lack of women running portfolios at hedge funds, the research suggested.
2. Information Technology (19%):
When Jo Cole started working in an IT role in an investment bank 25 years’ ago, stereotypes rang true: “I was the only woman in my team, but that’s changed dramatically in recent years and I’ve worked at banks where the male to female ratio is 50-50,” she said.
In the UK, there remains a supply problem – just 19% of Computer Science graduates are women, according to figures from the Higher Education Statistics Agency (HESA), and the number of female candidates has declined by 10% since 2006. However, not all ‘technology’ roles require in-depth programming knowledge and the cliché that women gravitate to the ‘softer’ side of IT still holds true to an extent.
“Women typically get involved in the more strategic elements of IT – project and programme managers and business analysts – but there are some very capable women working in technical roles and banks are beginning to recognise this more,” said Cole.
Getting recognition for technical prowess is still an uphill struggle; at an event organised by recruiters Nicoll Curtin late last year, women in banking technology spoke of the need prove themselves to their male counterparts and demonstrate better technical knowledge in order to gain their respect.
3. Quantitative finance (21%)
Female quants are still a rare breed, but investment banks don’t appear to be particularly proactive when it comes to attracting them. Morgan Stanley has its Strats & Modelling Women’s Quantitative Finance Mentorship program in the US, but there are few schemes specifically aimed at encouraging more women into the sector.
Despite this, our figures suggest that the situation is slowly improving. Just 19% of quant employees in the UK were female last year, and this has edged up to 21% this year. Recruiters say that women with physics or mathematical science PhDs are still a rare breed, but banks are ever-eager to recruit them.
“If there are two candidates of equal ability, it’s far easier to place a woman quant into the role, and it’s a much quicker turnaround time,” said Dominic Connor, a partner at P&D Quant Recruitment. “It’s simply a supply problem.”
In the UK, 37% of students pursuing a post-graduate degree in mathematical sciences are female, according to HESA. However, banks need to start targeting potential female quants earlier than that, argues Robert Grant, COO of technical recruiters Cititec.
“Focusing on pre-university entry is likely to get the banks a higher percentage of females, but this will require co-ordination, investment and a long term view,” he said.
4. Private equity (21%)
The chances of making it to the senior ranks in private equity as a woman remain slim, but Asia is more progressive than other parts of the world. Nearly 13% of people in senior positions are women, according to a March survey by private equity intelligence provider Preqin, compared to 10.4% in North America and 9.9% in Europe. Either way, they’re badly represented and over numbers have fallen year-on-year.
Private equity is a demanding career, where senior deal-makers are expected to work long hours and travel extensively in order to find opportunities. Not surprisingly, raising children often plays a factor in blocking women’s route up the career ladder. However, things are starting to get better, suggests Gail McManus, managing director of Private Equity Recruitment.
“We’re speaking to male clients who are taking more personal responsibility for childcare, avoiding late or crack-of-dawn meetings, and this progressive attitude is transferring across to their attitudes towards women in the industry,” she said. “Even two years ago, this would never have happened.”
Women comprise just 6.9% of senior positions in large buyout firms and 9.7% of venture capital companies, said Preqin. Real estate, with 12% of the total, was the top performing sector.
“Fundamentally, we need more women in the private equity feeder pools,” says McManus. “This means more female recruits in investment banking, leveraged finance and the advisory functions of the Big Four accounting firms.”
5. Capital Markets (26%)
For all the diversity initiatives to encourage more women into capital markets and help them advance, their overall representation in the investment industry “hasn’t moved in over 10 years”, said Martha Fell, chief executive of Women in Capital Markets and a former executive director in debt capital markets at CIBC World Markets.
Its research suggests that 23% of analysts or associates in capital markets are women, but this slides to 17% of vice president and director levels and just 10% of managing director roles. “Women are still under-represented at every level,” she said, adding that there’s no “silver bullet” to the problem.
“Well-educated women are still more attracted to other industries, and several still leave the industry mid-career – both of these factors contribute to the numbers that have existed for a long time,” she said. “Advocacy for increasing the representation for women in the investment banking industry must continue to include increasing awareness for career options and advancement, alongside the efforts to increase access to role models and mentors as well.”