There has been a lot of talk recently about the lack of senior women in the financial services industry, and discussion around how to address it. This is an enormous issue and the finance and technology sectors have woefully low numbers of women in senior roles. A 2016 report by Oliver Wyman suggests that across 381 financial companies, women comprise only 19% of executive leadership teams. Astonishingly, 25% of companies have no women in their leadership teams.
One of the ideas that appears to be getting more traction is that companies should set and track targets for the number of women in senior roles. For example the Women in Finance Charter that is being driven by the RT Hon Nicky Morgan MP and the Treasury Select Committee supports this approach. And their core point is correct, unless you measure diversity, change will not happen. As the saying goes, sunlight is the best disinfectant.
Diversity is important for our society – as a father to a daughter, I want her to grow up in a world where she can be as successful at work as her brother. Likewise, I’m keen for my little boy to be in a school that enables boys to close the gender gap that has opened up in education. Fairness matters, from a moral standpoint and also because fair societies are more cohesive and successful. And let me be clear, diversity is much bigger than gender diversity… it encompasses age, ethnicity, sexual orientation, disability, religion amongst other things.
Diversity matters for businesses too. The most touted reason for this is because balanced companies make better decisions, grow faster and are more profitable than imbalanced ones. The stats on this are shaky, but I wholeheartedly believe in this principle. Diversity also matters because it is really hard to find great people, so why would any company shut out whole groups of people in the search for talent?
Diversity at Currencycloud
At Currencycloud, we have a robust programme to ensure inclusion and diversity, which is championed by our CFO, Fiona Tee, and supported by the entire leadership team. We took part in National Inclusion Week last September across both our London and New York teams. As part of this, all employees undertook mandatory diversity training provided by ACAS.
When we hire for new roles, we try to ensure that job specs are written without gender bias. Research shows that job specs that emphasize words such as ‘decisive, determined, independent’ are more likely to attract men, while those that emphasize words such as ‘honest, dependable, collaborative’ are more likely to attract women. We work hard to balance candidate lists prior to interviews, but the role always goes to the person who is best suited to the position.
We also regularly review the pay of our entire workforce, to ensure that people doing the same job, to the same level of ability, are paid consistently, and that our promotion process is fair. All employees are offered free access to the EveryWoman network to further drive gender equality and we bring in external speakers which include senior women from other firms to inspire our team.
But we also recognise that we need to do more. 27% of our employees are female. We would like this to be higher. In our small executive team, 33% are female but in the next level of management only 21% are female.
So the question is whether we should introduce additional targets at Currencycloud.
Looking at the numbers, we clearly need to up our game. But here’s the rub. Fewer than a quarter of our job applicants are female, falling to below 10% for technology roles. In 2018 we are planning to hire 50 new people, that’s roughly a 35% increase in our workforce. If we put in place targets, a simple way to meet them would be to make sure we hire more women and favour women in promotions. And one could argue that these actions would create a culture where more women will want to work.
But would this be the fair thing to do? Quite apart from the legality of such an approach, think of the message. Female employees are undermined because they are unsure if they are the best person for the role. Male employees feel overlooked and become disengaged. Targets don’t drive inclusion, they drive exclusion. The Economist published an interesting article last week laying out far more articulately than I can why such approaches are misguided.
Companies should absolutely publish data on diversity, be transparent, create the right conditions for people of all backgrounds to be successful. But solving gender diversity is complex challenge that needs a comprehensive solution over time. Some selective targets may be set, but as part of a broader, more meaningful programme – not in isolation, where they can do more harm than good.