Written By Cynthia Zhang
In recent times, the topic of gender equality in the business world has been fast-tracked into public conversation. The world’s largest corporate banks are accelerating their recruitment of female business students through diversity programs, reflecting the growing desire for these entities to align themselves with the societal issue of gender representation in historically powerful and male-dominated industries like the capital markets.
The ripples of advocacy for female representation, wage equality and the overturning of sexist gender stereotypes have been supported so fiercely that they have succeeded in grabbing the attention of the highest-level executives that run our top financial institutions. These efforts to create change are important. As announced by the Payscale 2022 Gender Pay Gap Report, the “Finance & Insurance” industry has the largest difference in compensation between male and female employees: for every dollar paid to the men, women were paid only 77 cents. These figures clearly show that, although gender inequality is a widespread problem, it is especially concerning within the finance sector.
This leads to the key question today: have recent public conversations and efforts condemning gender inequality actually translated to tangible, significant changes within the business workplace? The answer, as reported by a McKinsey article on gender gaps in North American financial services, is dire. They state that “at the beginning of 2021, women in North America remained drastically underrepresented in the financial-services workforce– particularly at the level of senior management and above.” McKinsey then cited their report on Women in the Workplace, revealing their findings on the difficulty women face in climbing the corporate ladder that result in an unequal gender balance in upper-level leadership. In other terms, not enough women are being promoted to the roles that hold the most power.
This finding is reinforced in a George Washington University business article, which cites research conducted by data analytics company Visier that reports how “women were 21% more likely to achieve ‘top performer’ status than men” in the business workplace, but “women under 40 were less likely than men [of the same age] to receive a promotion.” These figures highlight the crux of the problem: women are working at the same caliber, or even higher, than their male counterparts, but are not being rewarded accordingly by their superiors.
This insight points again to how a male-dominated hierarchical power structure is created, and then protected through a male-centric recruitment process. This analysis of the intimate and self-sustaining culture of male solidarity lends an explanation as to why the loud public push for women’s empowerment has not translated into effective change within the financial services industry.
As noted by Forbes contributor Margeurita Cheng, laws and policies may have changed with the intention to open the door for businesswomen to accelerate their careers, but “actual changes have not yet been implemented.” Why is this? Women do not have access to the same social dynamic of strong gender solidarity compared to men– a complex problem that culminates directly from centuries of societally-reinforced sexism, a lack of female empowerment and consequently a low number of women holding positions of power who can support the advancement of younger generations of women. Cheng writes how this support system between women is necessary, but is not established because it is so time-consuming and challenging for women to enact compared to men. Resultantly, lack of mentorship and accessible role models leave women disadvantaged. As emphasized by the U.S. Small Business Administration report, mentorship plays an important role in business contexts. For example, “small business owners who have access to mentoring report higher revenue and growth rates.” From this, the importance of establishing mentorship relationships for women in the workplace is apparent.
Taking a step back, how exactly can female solidarity be established? The answer lies within understanding how humans become motivated to identify themselves as part of a group. This is achieved when people bond over shared perspectives and goals, which join them together as one entity sharing a common background and perspective on life. This social dynamic has been called the political solidarity model of social change. Academic Emina Subašic detailed this model in a research paper, explaining how “people opt for collective social change, rather than individual mobility, when they perceive the intergroup status boundaries between their own and the more privileged, high status group as impermeable and unstable and, importantly, the intergroup relationships in a given social context as illegitimate.”
Indeed, male workers belong to the “more privileged, high status group” while female workers are the individuals that must achieve a similar gender solidarity by “[opting] for collective social change” instead of “individual mobility.” In other words, men have already achieved a high level of solidarity and mutual support within the workplace. They strongly perceive their gender as a status and impermeable differentiator from women, and thus reward those within their “group” over their female coworkers. In this case, the best response from women may just be to do the same.
Such efforts can have lasting positive effects. A research article by Julia Becker on collective action and social change provides additional perspective. It states that “a strong collective action orientation requires that members of disadvantaged groups are highly aware of their membership in a disadvantaged group, and highly identified with this group. In addition, it is necessary that they clearly recognize existing group-based inequality and… identify the outgroup as oppressive.” Clearly, a strong sense of camaraderie and active demonstration of support from women, towards other women, has great potential to create lasting impacts within the workplace political hierarchy.
How can this plan for collective action be realized? This is ultimately the next hurdle that must be overcome in order for women in the business world to see real, tangible change within their workplaces. The women’s diversity programs touted by banks worldwide may be a positive addition to the recruiting process, but that initiative only dedicates attention to women as they enter the workplace, neglecting to support their future career development as they work to advance up the corporate ladder in the future. In this way, these initiatives do not adequately equip women with the ability to shake the ironclad grip that male leadership has on the reins to these powerful financial corporations.
The focus has to shift to the top of the power hierarchy. For example, gender-specific disadvantages should be recorded through quantifiable metrics so that data-driven and tailored initiatives can be created to support women’s career development. Additionally, the topic of gender equality must become a topic of advocacy shared by both men and women from a young age, whether that be through strong public dialogue from our current world leaders and role models, or from more robust teachings within schools and colleges.
In this way, a healthier and more productive responsibility structure is established; men are no longer “bystanders” and women “victims” in the gender inequality context, but instead both are empowered to be agents of change. These are a few examples of efforts that should be made— of course, so much more can and should be done. Ultimately, it is through examining the root problems regarding gender inequality that effective, decisive and sweeping changes can be made in the business world.