Did you know that women represent half of all professionals entering finance, but by VP level the proportion has dropped substantially? Is this the same for private equity? The answer is yes – but from a lower entry base so the problem is magnified. We’ve done some counting and whilst approximately 25% of junior private equity professionals are female* this proportion reduces to 10% by investment director and above. You might ask – does it matter? Well it should.
There are sound economic arguments for maintaining a good diverse mix within your team. But the issue here is not so much accepting that diversity matters, which I think most people do, but focusing on the lack of upward movement or fall out that happens before the senior levels are reached. Arguably you are losing some of your well trained skill base before you can really capitalise on all that input you gave in those early years. And it is not all to do with leaving to have children. It’s a bit more complicated than that. There are real issues of women leaving to have families and then not being able to get back on the ladder. There also seem to be issues related to promotion and progression within the firm.
And the issues lie on both sides – the employer and the employee.
For the private equity employer that wants to retain and promote its female staff the sorts of issues that it may need to tackle include:
- Those difficult to eradicate unconscious biases and under the surface issues where unspoken and unconscious prejudices still exist. For example an unconscious bias that might inhibit the promotion of women is how work is allocated to them. Do you put your female team members on the most visible, promising investments? Or is there an unconscious bias that pushes them towards less high profile projects that might need a lot of attention but are not so well recognised when it comes to considering who makes it up the greasy pole
- In order to recruit more women and retain them in the business you may have to positively discriminate – but a positive discrimination culture is not easy to achieve. It means saying things like it is ok for the main child carer in a family (usually the woman) not to participate in so much travel but that this opt out is not acceptable for other team members with children
- It requires real recognition of the struggle to juggle home and work and the support that is needed from the employer to do that without falling into the trap of unconscious bias or discrimination
And for the female team member there are also a number of fundamental issues they have to deal with when taking a maternity break or aiming for high level promotion
- The psychological contract with their employer needs managing – they may feel they have to choose between a career sacrifice if they want to manage a family or ahome life sacrifice if they want to manage a career (recognising that many men in the workplace have to make home life sacrifices to succeed).
- There is a lack of confidence in dealing with the issues – it is easier to just quietly go away than fight a culture which will judge them – whatever their choice.
Can any of this be dealt with?
Well I think the best phrase I heard recently to answer this was:
“If you do what you’ve always done you’ll get what you’ve always got”
The traditional approach to dealing with these issues on both sides has been to try to minimise them – ie sacrifice your home life if you want a long term career in this industry and hide the struggle to juggle. But by changing perspective to recognise the differences that your female workforce represent rather than trying to suppress them can achieve positive long term results.
If you can be prepared to:
- Embrace the differences in the workforce not try to minimise them
- Positively discriminate, differentiate and change your approach
- Bring issues out into the open and discuss them
- Create some guidelines and communicate them
- Think about how you staff high profile projects
- Use the appraisal process objectively for promotion management and career development and
- Provide peer-to-peer and mentor support
You can retain that lost talent and gain a committed, loyal and efficient senior member of the team.
It’s not easy – but there is a lot of talent going to waste – and with a general shortage of highly talented people – that seems a shame.
*We did a web based count focusing on the larger private equity employers and looked at their team profiles by gender