On Jan. 3, 127 women were sworn into Congress—a new record for female representation in American politics and an increase of 15% from the previous Congress.
But the same progress hasn’t been reflected in the financial services sector, particularly among leadership roles.
In North America, women account for over half of the entry-level workforce in financial services but represent fewer than one in five positions in the financial services C-suite, according to McKinsey research.
Even though men and women begin their careers at the same point, women tend to steadily lose ground to their male peers. The biggest drop occurs early in their tenure, when women are 24% less likely to obtain their first promotion than their male peers, even though they request promotions at similar rates, according to McKinsey.
In the insurance industry specifically, women represent over 60% of the 1.6 million workers-strong workforce. But only 11% of women are named officers, 19% are directors and 12% are in top officer positions of CEO, COO or CFO, according to STEMconnector. Moreover, only 35% of independent agencies are led by a woman agency principal or senior manager, according to the 2018 Future One Agency Universe Study.
The impact is acutely financial: STEMconnector reports that in 2016, women in insurance earned 62 cents for every dollar earned by men—less than what women in the U.S. earned in 1951 compared to men.
What barriers are holding women back on their professional insurance journeys?
1) Unconscious bias. Discrimination against women for demonstrating the very characteristics that are integral to being considered for and succeeding in leadership roles is a no-win scenario for aspiring women in finance.
“Unconscious bias leads some people to believe that behaviors normally thought of as belonging to a leader, such as being assertive, confident and outspoken, can be viewed differently in women versus men,” says Jeff Grange, president of specialty and commercial insurance, QBE North America.
2) Work/life balance. A historic and institutional bias around family responsibilities impacts many organizations, and Grange says this “lack of work-family balance and lack of flexibility” is a leading barrier in accounting for the needs of working women.
While many fathers contribute to their families in ways that are non-traditional for men, the expectation of responsibility for home and family still lies predominantly with women—leading to difficulties with work/life balance.
“Many women express that they feel guilty when they are focusing on their family for fear that they will be judged at work, and that they feel guilty when they are focusing on their jobs because they are not paying attention to something they could be attending to at home,” says Cyndi Sax, senior vice president, professional services at Caliper, an employee-assessment and talent-management-solutions company.
If a woman leaves work in the evening while her counterparts are burning the midnight oil, “there is a chance that her physical absence in the office could be negatively perceived by her boss or peers—even if she's putting in the same number of hours by checking email and taking phone calls from home in the evening,” Sax says.
3) Internal structure. A company’s culture can also exclude women. Consider a female client of Sax’s, who worked in an environment described as an “Old Boys Club.”
Frequently, her “male counterparts would leave the conference room together after a meeting and make decisions about topics discussed in the meeting without her perspective being represented,” Sax says. “Whether intentionally or not, those norms can often leave women standing on the sidelines or having to work twice as hard in order to accomplish the same recognition at work.”
Businesses that don’t intentionally look into ways to promote women into senior roles are missing out: McKinsey’s research shows that companies in the top quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to demonstrate superior value creation.
Companies can take proactive steps to improve gender parity and close the pay gap by “supporting women and opening the pathway for more women to hold leadership positions,” Grange says.
In addition to supporting a healthy work-life balance by offering flexibility in hours and ensuring that networking settings are neutral and appeal to a diverse audience, insurance businesses can track “clear diversity and inclusion goals and metrics across the entire organization, including among officer and management levels, which are historically male roles,” Grange explains.
Another way to address female underrepresentation is maintaining “a culture which actively analyzes its practices and protocols to sustain transparency in its hiring practices,” Grange says. QBE, for example, has “role mandates for all roles, at all levels, with corresponding salary ranges associated with each role to ensure that total compensation is fair, equitable and free of any gender bias.”
Sax encourages women to seek mentorship or sponsorship from other colleagues and reminds aspiring women leaders that “it is not simply what happens to them, but how they respond to those events that have the greatest impact on their success. Regardless of the challenges that she faces, building resiliency is one of the most impactful developmental activities that any woman can take.”
But importantly, sexism in the workplace can’t be overcome with determination alone. “Women have been fighting for equality in and outside of the workplace for generations,” Grange says. “The challenge for men is to become champions of change and make diversity and inclusion a strategic priority, not just a program.”
To that end, organizations must “commit to the promotion and advancement of women into senior leadership roles and the corporate boardroom,” Grange says. “They must champion equal pay at every level of the organization and create compensation frameworks that reward all leaders for results and outcomes around clear, measurable, diversity and inclusion goals.”
Will Jonesis IA assistant editor.