While more than 90% of financial service company executives indicate they are committed to gender diversity, only 19% of financial service company top executives are female, even though men and women start out their careers at parity, according to the results of a survey released Thursday by LeanIn.org and McKinsey & Co.
By comparison, 22% of top executives in U.S. companies overall are female.
More than half of the senior executive women surveyed who are at the vice president level or above stated they have missed out on opportunities due to their gender, compared to 10% of male senior executives. Women of color in financial services are 34% less likely to get their first promotion than their male colleagues. Some 42% of women surveyed said gender will hinder their advancement in the future.
Senior women receive less support from senior management than men, even though men and women ask for support at the same rate. Some 34% of women indicated they have received career advancement advice from a senior leader or manager compared to 44% of men. Female senior executives have fewer interactions with senior leaders than their male counterparts. Forty-one percent of women have monthly interactions with senior leaders, compared to 49% of their male peers.
"Women are starting out near parity but are dropping to 1 in 5," said Alexis Krivkovich, a partner in the Silicon Valley office of McKinsey & Co. "People feel (lack of gender parity) is a problem that will solve itself. Unfortunately ... it's a persistent challenge and not one that will change easily. It will require aggressive action."
This year's survey revealed that while popular perception is that women leave the workforce or leave jobs in higher numbers than men at the beginning of their careers, McKinsey's research shows that attrition of female executives is similar to that of male executives, Ms. Krivkovich said.
"In general in financial services attrition is not a primary driver" of there being fewer women in top positions at financial services firms, Ms. Krivkovich said. The primary driver "is women getting stuck in the pipeline."
In the asset management and wholesale banking sector of financial services, which includes institutional investment management, there are slightly fewer women starting out their careers, 48%, Ms. Krivkovich said. By comparison, there are more female junior executives at companies in the other two financial services sectors tracked by McKinsey: banking and consumer finance with 51% junior executives and insurance, 57%.
However, the rate at which the number of men outpaces women occurs more quickly in institutional money management, but all sectors end up at the same place, Ms. Krivkovich said. Some 34% of executives who have had their first promotion up from entry-level executive are women in institutional money management, compared to 49% in the insurance sector and 43% in the consumer sector, she said.
Even with these differences, all financial sectors end up the same way, where only 1 in 5 senior level executives are women, she said. McKinsey has been conducting the survey with LeanIn since 2015 and that trend has been persistent across the surveys, she added. Seventy-three percent of C-suite executives at financial services firms overall are white men, compared to 17% white women, 8% men of color and 1% women of color.
Fewer women in senior roles means there are fewer women to sponsor and champion junior female executives, Ms. Krivkovich said. Women tend to have female sponsors; whereas men tend to have more male sponsors.
According to the survey, 81% of entry-level women in financial services have networks that are largely female or evenly split between men and women. In contrast, 94% of entry-level men cultivate networks that are largely male or evenly split between men and women.
"Right out of the gate you lose visibility of women in senior management positions," Ms. Krivkovich said.
In the asset management and wholesale banking sector, 74% of the most senior executives are white men, 18% are white women, 7% are men of color and 1% are women of color.
While attrition does increase in senior management, few people are leaving the workforce entirely, Ms. Krivkovich said.
"Men are more likely to say they are leaving for another job. Women, in particular women of color, are more likely to say they are doing something entrepreneurial," she said.
"From qualitative interviews across all company types, women are striking out on their own ... because people are feeling the headwinds, seeing inequitable promotion."
They are leaving because they might have more success if they strike out on their own, Ms. Krivkovich said.
"Making progress on this issue (gender parity) will require corporate leaders — both male and female — to view gender equality as a strategic priority, and one that is integrated into the organization's day-to-day work," said Asheet Mehta, global co-leader of McKinsey's global banking practice, in a written statement. "Getting far more women to the top of financial services firms is ambitious, but our interviews with senior executive women and deep research demonstrates there are clear practical steps that can be taken to pave the way for more women to get there."