Women have made significant strides in the finance industry over the years, but there's still a long way to go. Recent studies show that women in finance roles account for 52% of the industry in North America, but representation falls at every step of the corporate ladder. Numbers drop to 36% for women in senior roles and 26% for C-suite positions.
These figures highlight the need for greater gender diversity in financial services so companies can leverage a broader mix of viewpoints and approaches to better navigate changing market conditions.
There is ample evidence that gender diversity drives results. This can be attributed to research consistently reinforcing the link between diversity and financial performance. Companies with a higher percentage of women in finance roles are more likely to have a competitive edge when it comes to revenue generation, corporate growth, and market valuation.
Growth: A Boston Consulting Group (BCG) study shows that diverse teams are better positioned to unlock innovation that drives market growth. Companies with above-average gender diversity generate more revenue from innovation (45%) than from companies with below-average diversity (26%).
Performance: McKinsey & Company research indicates a higher likelihood of outperformance among diverse workplaces. Companies with a higher proportion of women in senior leadership roles (above 30%) are more likely to experience improved financial performance compared to companies with fewer women executives (below 40%) or none at all.
Revenue: Another McKinsey & Company analysis reveals a positive correlation between gender diversity and profitability. Companies with more executive-level diversity have a 25% probability of producing above-average profits and a 27% likelihood of longer-term value creation based on EBIT margins.
Companies that show a strong commitment to gender diversity in finance roles see a payoff in resilience across the organization. BCG study findings highlight companies with a higher share of senior-level women in finance as more innovative and better equipped to adapt to rapidly changing market dynamics. These companies reported innovation as 45% of total revenue versus 26% for companies with below-average diversity leadership.
These results are consistent with other reports about corporate resilience. For example, Citi Ventures research shows companies with more women in banking roles were more financial stability during the 2008-2009 global financial crisis.
In a global analysis of gender diversity conducted by Willis Towers Watson, employees were 71% more likely to stay with companies that have at least one-fifth of women in senior management and executive roles. This increase in retention translates to long-term sustainability.
Gender diversity signals an attractive work environment for women in banking and finance seeking equal opportunities for career advancement. A recent PWC survey found that 61% of women look at the gender diversity of an employer's executive leadership team when deciding where to work.
Visible female role models not only give women the confidence to pursue careers in finance, but they also provide guidance and support to overcome barriers. Moreover, BCG reports 51% of women will not accept a job from companies that don't align with their diversity, equality, and inclusion beliefs. The takeaway is workplaces that prioritize gender diversity will have more success in recruiting and retaining top female financial professionals.
Increasing the representation of women in finance roles is not only a matter of gender equality but also has tangible benefits for the bottom line. There are several strategies that can help shape the future of women in finance for decades to come. These include putting diverse slates in place for hiring and promoting women, establishing clear and consistent evaluation criteria, and adjusting policies and programs to minimize gender bias.
For help with hiring qualified female candidates for fractional and outsourced finance roles, book a free consultation with one of our seasoned financial experts.
