As the average age of financial advisors creeps upward, the industry is looking for the next generation of advisors to replace them.
However, as the general population becomes more diverse, firms are also looking for ways to attract people with different values and experiences. The benefits of a diverse work force to firms are more immediate than securing replacements for retiring advisors. A 2015 report by PwC of CEOs at global financial services firms found three-quarters of respondents believe diversity at their firms has led to more innovation, and better customer satisfaction and business performance.
A survey released in May by PwC suggests ways to attract young women to the industry as part of that drive for increased diversity. “The increased presence of women can improve the ability to build relationships and engender trust, giving businesses an edge in key growth sectors, such as wealth management,” according to the survey.
PwC surveyed more than 8,000 women born between 1980 and 1995, of which about 600 were already working in financial services.
Of those 600, 60% say career progression is the most important attribute of an employer. Over a third said lack of opportunities for advancement was the reason they left a previous job. However, almost twice as many said they felt they could attain a senior position at their current job. Half said employers were biased toward men in promoting employees.
Women want flexibility at work, and almost half say programs to help with work-life balance exist at their firm, but 53% say taking advantage of those programs could jeopardize their career. Within asset management, that rises to 63%.
Elaine Miller, managing director of PwC’s financial services practice, said that this disconnect between firms offering work-life balance assistance and employees using them isn’t limited to women, and in fact, “can be an even bigger hurdle with men.”
She suggested three ways firms can encourage workers to use the programs they offer. One is to make sure they “set the right tone at the top.” In an email to ThinkAdvisor, she said, “Leaders in the organization should take advantage of work-life balance programs themselves, and encourage their teams to make use of them as well. Managers should proactively discuss work-life options with their employees, and work with them to define a plan that works for them while still enabling them to perform their job responsibilities.”
Another way to improve utilization of work-life balance programs is to “manage by outcomes,” Miller wrote. “Employees should be rewarded for the impact they have on their organization’s business objectives in terms of outcomes and delivery, rather than time spent in the office.”
Finally, the firm’s policies and processes should support those work-life programs, according to Miller. For example, workers who use the work-life program and meet performance objectives should be considered for a promotion, even if they haven’t been in their current position for the prescribed length of time. “Too often, talent policies inadvertently punish employees who opt to use work-life balance programs with stringent requirements that are often not indicative of employee ability,” Miller wrote.
Interestingly, more than two-thirds of women say they’d like to work outside their home country, and 55% say it’s necessary to further their careers.
Miller said that international experience “accelerates the learning process” by putting employees in situations where they encounter more ambiguity than they would in their domestic experience.
Aside from language skills, employees who work abroad learn important interpersonal skills, Miller said, like cultural dexterity. “While abroad, employees build their understanding of other cultures, ability to read verbal and nonverbal cues, ability to maintain an open mind and emotional intelligence,” she wrote. “These interpersonal skills increase awareness and enable employees to be more effective when engaging with people from other backgrounds and cultures when they return to their home country, ultimately increasing their effectiveness and ability to collaborate with others in order to achieve project or business goals.”
Adaptability and the ability to work outside their comfort zone is another benefit to working in a foreign country. “Starting a position abroad doesn’t simply mean new cultural barriers to navigate; it adds challenges such as building new networks, access to new but unfamiliar resources, and infrastructure changes,” according to Miller. “Immersion in a new environment forces employees to be flexible and resourceful, builds their listening and observing skills, and builds independence. Employees who work abroad tend to be more resilient and able to adapt to changing business situations, which reaps huge benefits for organizations.”
Miller added that as the global work force becomes more mobile, it’s more common for employees to work with people in other countries, even if they stay in their own office. “Individuals with international experience understand nuances of communication — such as the importance of opening conversations in certain countries with relationship-building questions (e.g., family, travel) — rather than getting right down to business, and are able to more successfully create new relationships and navigate cultural boundaries.”
She said that those three factors “translate into more effective problem-solving skills in any situation, which truly is value add for employers in a world of increasing ambiguity and a faster pace of change.”
The report found that only 13% of respondents from outside financial services said they would never work in the insurance industry because of its image, and 10% said they wouldn’t work in the banking and capital markets. Asset management was even more appealing; only 5% said they wouldn’t be interested in that industry.
Still, Miller said that the industry’s image hasn’t fully recovered from the financial crisis and won’t in the near term. Changing demographic preferences, as millennials look for careers that are more than “just a job” and provide meaningful work, are affecting the way new recruits view the industry. Miller said millennials are looking at companies’ values and how they deliver on them when they consider a firm as a potential employer.
Firms that have successfully attracted millennials have offered paid time for volunteerism or are strongly tied to a specific cause. They may also consider more than quantitative factors when considering a worker’s performance and rewards.
Rewards are still valuable to millennials, but they’re not limited to compensation. Miller said millennials generally value opportunities to progress quickly through the ranks more highly than compensation, although those who work in financial services “tend to be more money-oriented” than workers in other industries. She referred to a 2012 PwC report that found 44% of millennials in financial services rated cash bonuses as an important benefit, compared with 36% of those in other industries.
“Rewards are still a factor in attracting these millennials to the industry, and the limited potential for big bonuses means this population is more inclined to look at other industries, such as entrepreneurship or technology,” she wrote.
Miller noted that the financial services industry has been dominated by men partly because of the “promise of high rewards,” but also because of a traditionally “macho culture.” As more women have earned bachelor’s degrees and MBAs, they’ve entered the industry in higher numbers, Miller said.
“This is especially noticeable in insurance, where women make up 62.8% of underwriters, according to the Women’s Bureau,” she wrote. “Some organizations are placing increased emphasis on hiring female graduates in order to build the pipeline of potential female leadership candidates. And, many organizations are continuing to establish programs to make the industry attractive to women, such as diversity initiatives including affinity circles as well as work-life balance programs. As more women move up the ranks in finance, we anticipate seeing a larger proportion of women in this field.”
— Check out 7 Reasons Women Make Better Money Managers Than Men on ThinkAdvisor.