Why women leaders are switching jobs more and how to prevent it

“Women leaders are switching jobs at the highest rates we’ve ever seen, and ambitious young women are prepared to do the same. To make meaningful and sustainable progress toward gender equality, companies need to go beyond table stakes.” That’s according to McKinsey's latest Women in the Workplace report, in partnership with LeanIn.Org.

The financial services industry is not immune from this latest trend.  In the last few years, the sector has undoubtedly made progress in promoting gender diversity. However, the underrepresentation of women in senior leadership roles remains a pressing and seismic issue. Over the years, the number of women advancing through the ranks has been consistently lower. Cultural factors and dysfunctional leadership teams play a pivotal role.  Now, financial service companies are facing a new challenge in retaining the relatively few women leaders they do have, leading to a pipeline problem. These issues are even more pronounced for women of colour, exacerbating the gender and racial disparities in leadership positions.

There is no question that female leaders are determined to progress in their careers but encounter greater obstacles than their male counterparts. The desire for more fulfilling work is driving women to leave their current companies at an unprecedented rate. The frequency of women leaders changing jobs has reached record levels, surpassing that of their male counterparts in leadership positions. 

The reasons that lead current women leaders to leave their companies are even more crucial for the upcoming generation of women leaders. According to McKinsey’s Women in the Workplace 2022 Report, the desire to advance amongst young women is paramount, with over two-thirds of those under 30 aspiring to become senior leaders. The younger generation of women is exceptionally ambitious and places a greater value on working in an equitable, supportive, and inclusive environment. They closely observe senior women departing in search of better opportunities, and they are ready to follow suit if needed.

Benefits of women leaders in FS

The advantages of having female leaders are well-documented and extend beyond just gender representation. The presence of diverse leadership teams has been proven to have positive financial outcomes for companies. However, despite this knowledge, much work must be done to achieve gender equality and inclusivity in leadership positions. 

Artificial intelligence (AI) is currently a highly discussed topic, and its relevance to the urgent need for more women in leadership roles is evident today. Women leaders are renowned for their strong commitment to ethical practices. In the rapidly evolving and complex field of AI, having senior female leaders actively involved in decision-making is crucial. Their unique perspectives and experiences bring valuable insights to the table, resulting in a more comprehensive and well-rounded approach to AI-related choices. Embracing diversity, including women in leadership positions, and actively involving them in AI decision-making will foster innovation and lead to a more responsible and ethical AI implementation, benefiting society as a whole.

Why female leaders are switching jobs

The scarcity of female CEOs and senior leadership teams within financial service organisations highlights the existence of a glass ceiling. Women who ascend to leadership positions often find themselves as lone voices in a male-dominated environment. 

Women are more likely to encounter demeaning behaviours, such as having their judgment questioned if they are working in a boy’s club culture. A lack of female representation and a support framework can lead to isolation and difficulty in making their voices heard, resulting in a strong inclination to leave. 

Women leaders bear a heavy workload and often lack the recognition they deserve. Compared to their male counterparts at the same level, women leaders invest more effort in supporting employee well-being and fostering diversity, equity, and inclusion (DEI)—efforts that significantly enhance retention and employee satisfaction yet are not adequately acknowledged in most companies. Devoting time and energy to unacknowledged work might hinder the advancement of women leaders. Furthermore, it results in women leaders being stretched thinner than men in leadership roles.

Balancing demanding work hours with personal responsibilities can be especially challenging for women, as they often shoulder a disproportionate share of caregiving responsibilities for children and elderly parents. With the recent shift in organisations seeking more visibility in the office as the pandemic's impact recedes, women face increased pressure to be physically present at work. Women leaders are, however, actively pursuing a distinct work culture. They are less inclined to leave their current jobs than their male counterparts. They mainly seek more flexibility or opportunities to work for companies that prioritise employee well-being and diversity, equity, and inclusion (DEI). These factors have grown even more significant for women leaders over the past two years.

Additional factors include:

- Intense competition. The demand for senior female talent is increasing as companies recognise the value of diversity. Competitors may offer more attractive roles and better support for career growth and development, enticing women to explore other opportunities. 

- The absence of senior female role models and a limited number of women in leadership positions can lead to a perception that the organisation does not value diversity and hinders the advancement of women in the firm. 

- Gender pay gaps still persist in many financial service firms, and unequal compensation can lead to frustration and dissatisfaction among female employees, prompting them to seek better-paying opportunities elsewhere. 

- Many women feel they do not have a safe platform to voice the challenges or obstacles they face with their current employer and fear reprimand or negative consequences for speaking up.  

- Barriers to career advancement, such as biased promotion practices or limited access to mentorship and developmental opportunities, can hinder women's progress within the organisation. 

- Women in mid to senior-level positions may face specific challenges related to ageing and life stage transitions, such as peri/menopause, which can impact their well-being and career decisions. Some women may experience imposter syndrome, doubting their abilities and feeling like they do not belong or deserve their success. A lack of understanding and support for such challenges can impact retention. 

 
The importance of flexible and remote work choices

For women, having the freedom to choose their preferred work arrangement leads to lower burnout, increased job satisfaction, and reduced attrition. Remote work is especially crucial to women, benefiting their well-being and mitigating subtle and unintentional discriminatory behaviours. Companies should address concerns about remote team disconnection and invest in building an inclusive culture, as remote work alone cannot substitute for systemic change.

How to retain top female talent

To cultivate a more inclusive and appealing environment for females while addressing seismic issues and dysfunctional leadership teams, companies must prioritise investing in leadership assessment and development programmes. This investment can lead to the growth of skilled and diverse leaders who can drive positive change and foster an inclusive culture within the organisation.

Managers also hold a pivotal role in shaping the work experience of female professionals. Prioritising people management and diversity, equity, and inclusion (DEI) leads to higher job satisfaction, reduced burnout, and stronger employee loyalty. However, many companies have yet to adequately train managers to meet these expectations, resulting in a disconnect between desired behaviour and actual managerial practices. Improved training and support are needed to bridge this gap effectively.

To foster a conducive environment for female leaders to thrive, financial service firms must establish a robust support framework that includes conducting external, tailored and impactful engagement and retention programmes. These programmes create a psychologically safe space for female leaders to openly share their concerns and obstacles, ensuring their voices are heard and valued, without experiencing any repercussions. 

In parallel to these participant workshops, the leadership team/line managers need to be actively involved, whilst being made aware of the content, overarching themes, and discussions of each session, enabling them to actively support the development and success of female leaders within their organisation. 

Participants are empowered to take ownership of their future, understand the power of choice, and address any barriers holding them back, whilst collaborating with their line managers to overcome challenges and achieve collective success. This holistic approach ensures a collaborative and supportive environment, promoting the growth and advancement of female leaders in the industry. 

Hanover’s engagement and retention programmes

If you’re interested in learning more about Hanover's customised engagement and retention programmes for senior women, please feel free to reach out to me directly. 

Our impactful and tailored retention initiatives assist our clients in achieving gender equality and attracting and retaining talented women. Our focus lies in equipping senior female cohorts with the essential tools to overcome obstacles and enhance their skills. Simultaneously, we aim to empower and educate line managers to play a more significant role in driving positive change for female talent. Our programmes aim to advance their careers, improve their network, increase confidence, support work-life balance, provide tools to improve communication and feedback to peer/line managers and gain recognition for their valuable contributions, ultimately contributing to a more diverse, engaged and successful workforce.

While investing in these programmes will drive an impact in your business, it is one piece of the puzzle. Hanover is well positioned to support you with alternative solutions that may move the needle for you based on your context and unique challenges. Examples of these (not an exhaustive list) are:

- Empowerment webinars

- Our partnership with Illoominus, providing you with the platform to track and generate insights from your data across your employee lifecycle. This ensures you address the right challenges from the start and hold your business to account.

- More bespoke top-down and bottom-up cultural interventions that will help ensure you progress your business culture to being more diverse, equitable and inclusive, premised on a strong foundation of psychological safety.