Leda, what an exciting time to work in financial services!
Ain’t that the truth!
Financial services is certainly not alone in traditionally suppressing career opportunities for women, but let’s talk about this sector in particular. The positive side of things is that there seems to be an abundance of exceptional women taking the lead across a number of startups. What do you think has changed over the last few years?
Not enough is the short answer. A lot is changing every day, not fast enough, not enough in terms of the dramatic steps we need, but a little bit of changing every day. And with every passing day and every passing year, it gets better for women – actually, for diversity in the workplace in general. Specifically in founders and CEOs, the number remains quite small, so I would be surprised if these founders/CEOs didn’t break through the glass ceiling. They are a small number of women who statistically are not too different to the women who actually persevere and remain. I would say that with very very few exceptions, they have the same traits as the women who make it in the corporate world – similar backgrounds, they’ve cut their teeth and proven their mettle in the male-dominated world, mostly have no families …
That’s an interesting point.
It seems to be a sad and recurring theme that the women in positions of power, with very few exceptions, don’t have children.
So influence, on the hiring side of things, is still very much male dominated. Is that what we’re saying?
It’s a series of self-fulfilling prophecies and behavioural patterns. I was asked repeatedly when I was younger if I’m planning on having children, in job interviews, which is illegal, but was asked in a way that was couched as consideration. There’s a lot of travel involved. Do you have a family? You have to consider it, blah blah blah. I think there is an element of conscious or unconscious bias for positions that entail a lot of travel, that entail long hours, making judgement calls on who will be more available. Sometimes those are spoken about, some are not. I think there is an element of self-selection. I have definitely seen moments in my career where there was mass exodus of women from the workplace.
I did my undergraduate degree in a course that was pretty even in terms of male/female split. By the time I was in my PhD, there were noticeably fewer women, and a fraction of those actually saw it through and didn’t drop out to do other things – even more practical things, or family related things. So I think there’s an element of self-selection that the workplace forces upon people, that could be really easily fixed by giving equal parental leave. If a man and a woman are equally likely to go off and have children, it’s not a consideration anymore. So I think there’s an element of that.
I also think there’s an element of people hiring around their own image. There’s also an element of dealing with the constraints you have. For instance, if you’re looking to hire certain types of engineering talent, you cannot get female CVs for love nor money in some cases. They’re just not there to be found. The agencies, the searches, yield a very low proportion of women in certain areas of engineering. That happens across the board in financial services, which means that whatever happened, they were excluded or self-selected out of a journey that gets them in a place where they can now hold those positions.
To go back to your point, I actually think the women we’re seeing becoming founders of a certain age and up are the women that would have cracked it anyway. What’s really interesting is seeing those changes in the younger women. I don’t want to name any names, but there is one founder/CEO – one of the nicest people in the space – co-founded a firm with her long-term partner. They have a child. The child comes into the office, comes to conferences – there is that element of partnership that not only is true to their lives, but also sets an example, setting up a company that considers that normal for their teams.
Changing the culture.
Absolutely! And that drives massive change. I don’t think it’s just motherhood and family, actually. I think there’s a whole host of behaviours that drive self-selection. We know that for a very long time …
It seems to be a sad and recurring theme that the women in positions of power, with very few exceptions, don’t have children.
Are we talking gender stereotyping here?
Yes, and not only. If you think about it, fintech is mostly sitting in East London. Actually the city is sitting in East London. Bloody Canary Wharf is sitting in East London! Yet, the community is barely represented in our offices. Gender of course is close to my heart for obvious reasons, and it’s a very obvious gap, but look closer to home. We are not engaged in hiring from the community. Fundamentally, any employer’s first port of call is hiring within the community, right? We talk about mining communities, farming communities, and jobs in society tend to be extremely close in digital businesses, but tech and finance is not like that.
There’s been some very interesting work done on the impact big firms have had – like Facebook, Apple and Google – moving into certain communities, but not actually hiring from those communities. They’re importing talent from elsewhere, which has an incredible knock-on effect on the affordability of everything, from sandwiches to dry cleaning, to housing to transportation, in a community that gets penalised by that change in gentrification but don’t get access to the jobs. It’s not as dramatic, but think about it. Fundamentally, we hire a particular type of background into fintech, because we need a particular skill set. Yes, women are underrepresented in that, but East London is woefully underrepresented in that, and there is no real effort being made to create access.
It’s not just about women or the fact that we have largely white, male teams. It’s the fact that we’re looking at the world, because we can, and we pick the people who are most suitable for the role in terms of skill sets and experience right now.
We are looking for ready-made artefacts, and that makes eminent sense right? You want people to hit the ground running and you want people to be able to deliver immediately, but that means that we are continually fishing in the same pond, and if you don’t help people get in the bloody pond, we don’t help people get access, that won’t change. People who wouldn’t traditionally come into this space don’t come into this space. I don’t think that we will ever get to a statistical reflection of the makeup of society.
It’s impossible, right?
It is impossible! And it would be artificial. But at the same time, I wouldn’t mind that if I knew that there was access and people made different choices. So there was this interesting piece of research that came out of Sweden that essentially, after so much effort was poured into access to stem, to education, to the workplace, there is a return of a very large number of women to be stay-at-home mums. And of course we need to observe those statistics … to actually know whether it’s true … but my view would be, provided it’s a choice, I’m OK with that.
I’m seeing more men becoming stay-at-home dads. I think it’s more of a financial viability thing: If you can be a single-income household … I don’t have children but I’m guessing who wouldn’t want to spend time with their kids while they can?
The pay gap
I’m glad you brought up salary and what you take home, because part of this is about the pay gap as well. A few days ago, LinkedIn published research results that showed a pay gap between LGBT+ employees and everyone else; apparently as much as 16%.
The Financial Times was writing about this a couple of years ago. Sadly, discrimination still plays a huge part in career progression.
I wrote a piece about this back in the old days! For me, what is interesting is how we talk about it, because the reality is when you go into any job, you negotiate on the basis of your previous salary. So if you entered in a low-paid piece of the food chain, your incremental increases will never allow you to catch up. If you missed pay review cycles because you were away having children, or you were working reduced hours because of family obligations, that is reflected in those incremental increases. So the gap grows with every passing day. The way the industry negotiate salaries is pragmatic and real, and as well you know, we don’t force a lower pay on certain people. At each juncture, we negotiate the best deal for that person and for the firm, and you can’t argue with that. But it’s actually the wrong conversation.
I had an interesting situation in a company (that I will not name), when I refused to pay my team different salaries if they were doing the same job. And I got into a lot of hot water and I was threatened with disciplinary action. My view was that people talk, and if they’re doing the same job, you need to grade the job and not see what you can get away with with the person. But the way of negotiating salaries within bounds is so ingrained that it was an act of rebellion. And to be honest, it was an engineering team. It was all men. It was all white men. I was not trying to solve a gender issue, I was not trying to solve access, LGBT, race issue, class issue – I was trying to address a fairness issue.
I had people in my team who had been there a while and new people coming in to do exactly the same job who would need their help to get started, but get paid as much as twice what the older members of staff, who had been loyal to the firm, were paid. So the gender pay gap is very stark, but actually the pay gap in general within big corporate organisations is stark because of the way we negotiate salaries. Because the moments when you get salary increases are perversely not promotions, so if you change organisations, or threaten to change organisations, so there is a loyalty tax and women tend to change jobs more irregularly according to statistics (obviously I’m an aberration in that). So there’s a loyalty tax, a missing-out-on-promotion-cycles tax, but actually those pay gaps are real irrespective of gender. There are massive pay gaps with people doing the same jobs within an organisation.
In my experience, the resistance from big corporates to addressing that, even when there is no inclusion flag and it’s just about fairness, is one of the most brutal fights I’ve ever had in my career. I won, but lost, in the sense that I won but it meant that the talent function supported my hiring needs so little that I won an empiric victory. I couldn’t get the people in. The ones I got in got paid fairly, but they wouldn’t let me pay my older people more so I had to find new people that would get paid less.
“The pay gap in general within big corporate organisations is stark because of the way we negotiate salaries.”
So what would be your solution if you were talking about leadership positions now, and possibly hiring managers?
I think that there’s a whole host of things. Let’s take it at different levels. You should reward people for similar experience in similar jobs the same way, irrespective of where they came from. If you can’t do that, you have a fairness issue. If you have five people doing the same job and you pay them differently, chances are that these people will represent those inclusion challenges if you look at them, but the real issue you’re facing is a fairness issue. So deal with that one. The second is, when hiring, look for the best person. But when you look across the team and the best people look the same, you either have a sourcing issue or a bias issue.
I have no issue with the best candidate for the job being a straight middle-class white man. They will be the best person for quite a lot of jobs. But if they are the best person for every job, you either have an issue in hiring or an issue in sourcing candidates. So you need to address both. If your issue is with sourcing candidates, and you’re finding that actually you’re diversifying the way you’re sourcing candidates, and you’re still not seeing the diversity, then you need to create access. It doesn’t solve it for today, but it solves it for tomorrow.
You hire people and you help them upscale. That’s the only way to break it. They will pay you back a million times over with creativity and freshness of thinking that diversity brings to the table, no matter what that diversity is. And it could be somebody who has an unusual background in terms of their education, or returning mothers, or people from the local community who wouldn’t normally have access to this industry … and you give them access? No. There’s no easy fix! It will take time and it will take money.
They will reward you with the appreciation of being treated fairly – that has to come into it, right?
I also think the organisation more widely will reward you with appreciation of knowing that it’s a fair employer for all. And knowing that no one is there as a tokenistic gesture. everyone is there because they are the best people for the job. But that doesn’t mean we pat ourselves on the back and not seek to give access, because if the best person for the job is someone who didn’t even know this job existed, you’re missing out and they’re missing out.
I think fairness is a benefit to everyone. Transparency is a benefit to everyone. Diversity is a benefit to everyone. And diversity is not just optic diversity. Someone who is from an entirely different background and has had a different education – they might look like everyone else but they will ask very different questions, and they will bring a very different perspective to your organisation. So diversifying the points of view you have in the room is its own reward. Building a fair organisation that people are happy and proud to work in is its own reward. But it takes time.