Financial services companies hiring more women but less so at senior levels

Financial services companies are hiring and promoting more women but the levels of female representation decrease as roles become more senior, a report has found.

The conclusion is contained in the first report on the Women in Finance charter, which has been compiled by the ESRI. The charter, which 56 firms employing 45,000 people have signed up to, seeks to improve female representation in financial services firms operating here.

The report draws on a baseline survey with the signatories in 2022 and a follow-up survey carried out in early 2023. It found female representation on boards increased from 32 per cent to 37 per cent over that period, which is above the national average of 22 per cent.

Female representation on executive committees increased from 32 per cent to 35 per cent, but representation in senior management and middle management roles increased by just one percentage point.

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“At first glance, firms appear to demonstrate good levels of gender balance,” the report said. “However, we note that the level of female representation decreases as roles become more senior.”

From the baseline survey this drop occurs between the middle management (49 per cent female share) and senior management roles (39 per cent), further decreasing at the executive committee and board levels (32 per cent).

“We find that increases in the female share at the executive committee and board level are associated with changes in the size of these groups within the firm,” the report said. “Increases in the female share were more common where the size of the board or the executive committee had increased or decreased.

“This suggests that some firms may be addressing gender balance by reconfiguring senior teams. This will be explored further in the next annual reporting round.”

The share of women occupying technical and professional roles increased by two percentage points, while, in contrast, female representation at junior management level declined from 51 per cent to 49 per cent.

A low number of female applicants (63 per cent) and a low turnover in senior management (56 per cent) were identified as the main barriers to improving gender balance.

These were followed by a declining headcount or lack of recruitment within firms. A substantial minority of respondents (30 per cent) identified the hours and demands of senior roles as a barrier to increasing gender balance.

The researchers found a higher female share in internal appointments to executive committee, senior management and middle management roles, when compared to external appointments.

“This suggests that efforts to support pathways to senior management positions within organisations are paying off, and highlights the importance of the internal pipeline going forward,” the report said.

“The underrepresentation of female appointees for external appointments points to the need for a continued focus on recruitment practices.”

Overall, 3,287 appointments were made by the firms during 2022. Fifty per cent of executive committee appointments, 44 per cent of senior management appointments, and 47 per cent of middle management appointments went to women.

In the case of junior management appointments that share fell to 26 per cent, which the report said “suggests this is an area for further focus”.

Practices such as improving female representation on hiring panels and unconscious bias training were used by the majority of firms (69 per cent and 78 per cent respectively) but were rarely identified as being among the most effective strategies.

Seven firms have not yet assigned responsibility for improving gender balance to the senior management team, which the research suggests is an essential element for change. It is also a requirement of the charter.