The Observer

ARTICLES OF INTEREST

Diversity and inclusion – Bridging the gap

by Arti Sharma, (fmr) President and CEO, Northern Trust Canada

With the pace of technological innovation marching ever faster, and the promise of revolutionary technology like 5G networks and artificial intelligence around every corner, it can be easy to overvalue investments at the expense of every organization’s most important resource — its people. This is a critical mistake as no organization can thrive in today’s global ecosystem without investing in talent, thoughtfully nurturing it and creating work environments that empower diverse voices to contribute to pressing business challenges. Research has consistently shown that companies that do so stand to reap tremendous benefits, including improved decision making, reduced turnover and, ultimately, increased profitability.  
 
While all forms of diversity are equally valuable, whether related to race, ethnicity, religion, socioeconomic background, skillset or the many other differentiating factors that comprise our unique identities, the #MeToo movement has focused global attention in the past 18 months on the importance of gender equality by highlighting the stark challenges faced by many women who seek nothing more than equitable access to opportunity. In the process, society at large has been forced to confront the unfortunate reality that far too often, gender remains a primary determinant of professional success.
 
Although there are few industries unaffected by this problem, examining gender inequality in the financial services space provides a particularly effective example of the challenges faced by women in the workforce. In 2017, staff at the International Monetary Fund found that women held less than 2% of bank CEO positions worldwide and less than 20% of executive board positions[1], despite making up approximately half of the global population. In Canada, women made up more than half of our total population and 47.3% of the workforce[2]. A separate study by Mercer underscores these findings, demonstrating that the lack of female representation at the top is the culmination of attrition as women climb the career ladder. Starting at the support staff level, through the executive ranks, women are decreasingly represented at each stop along the way[3]. Compounding the issue of underrepresentation is the fact that women who work in the financial services sector are not compensated at a rate commensurate with their male counterparts. In Canada, which boasts a higher-than-average rate of women in senior management roles, women’s average weekly wage is approximately 31.5% less than that of men[4].    
 
Gender Savings Gap
Gender inequality is starkly evident when looking at retirement savings rates. Recent studies have found that the road to retirement is far more challenging for women than men. And once reaching retirement, women are far more likely than men to face financial hardships[5]. A report from the World Economic Forum shows that the headwinds both before and after retirement create a perfect storm resulting in lower financial security for women. The report also shows a gender pension gap of 77% between women and men here in Canada[6]. This is especially concerning given that, on average, women live five years longer than men and are putting significantly less money into savings. Statistics Canada’s most recent numbers suggests a 65-year-old woman has a life expectancy of 22 more years, compared with 19.2 for a man[7]. This “gender savings gap” is very much a reality and is something that must be addressed and actioned by all.
 
Given the importance of financial services in driving global economic output, we have a responsibility to do better. By “bridging the gap” and championing gender diversity and inclusion, we can ensure that our organizations maximize opportunity to the benefit of all. Initiatives like the U.K. law that mandates gender pay gap reporting are a good start and are likely to become widespread, but accelerating progress toward gender equality in financial services requires more.
 
Drive Perception
Complex challenges often require complex solutions, but one would argue that the first step in the process is often relatively simple. There must first be widespread acknowledgment that a problem exists, which requires substantive conversations about gender inequality in the workplace and its effect on organizational culture, productivity and the wellbeing of employees. Model best practices and empower those whose voices might not always be heard to join, or even lead, these conversations. Push those involved to identify concrete actions to improve the situation and determine how they can contribute to solutions. When this occurs on a consistent basis, “small wins” begin to accumulate that lead to long-term change. At the same time, organizational leaders should be vocal about their commitment to eliminating gender inequality and leveraging the talents of their entire workforce, both within the organization and in their external communications. When opportunities arise to take action, they should be seized, and the results should be measured over time. There may not be quick fixes that are readily apparent and easily executed, but consistency in words and actions gets the ball rolling. 
 
Rethink Hiring Practices
There is not a one-size-fits-all solution for every organization to ensure that their hiring practices emphasize gender diversity and inclusivity, but there are several basic steps that are often necessary. Educating and training human resources professionals and hiring managers to identify their own subconscious biases goes a long way toward promoting gender equality in the hiring process, as does rewriting job descriptions to emphasize inclusivity. Distributing applications to hiring managers without names is another common-sense method to reduce the effects of gender bias in the hiring process, often increasing the number of women in the candidate pool. Interviewing candidates by committees comprised of diverse members is another method to reduce the impact of subconscious bias. Wherever possible, candidates should be evaluated against objective standards that predict future job performance.
 
Empower and Retain Women
Providing women with equitable opportunity in the hiring process is likely to increase gender diversity in the near-term, but empowering female employees once they’re in the door leads to long-term progress. At Northern Trust, special attention is paid to coaching, mentoring and sponsoring women, helping them advance in their careers and avoid hitting the glass ceiling. Focusing on creating an inclusive culture has also led to “returnership” initiatives to help women transition back into the workforce after career breaks without the informal penalization that often occurs in such situations. We are also piloting coaching circles which bring together women of different generations to create networks of support that would not otherwise exist. Designing and implementing a retention strategy that promotes an inclusive culture for women is often unique to each organization’s specific values, culture and goals, but every organization should have a strategy and act upon it.

Sharma-Arti-93-19-1500x2100-(1).jpgArti Sharma, President and CEO, Northern Trust Canada
Arti is President & CEO of The Northern Trust Company Canada and serves as a member of the Corporation's Canadian Management Committee and Canadian Board. Northern Trust is a leading provider of asset servicing, investment management, banking and related services to institutional clients worldwide.