Women's quota, equal opportunities, gender quota in boardrooms – all these measures and buzzwords aim to increase the proportion of women on boards and in management positions. But what is the status quo in Germany really like and how is the gender pay gap related to it? What can we expect from this topic in the future?
Development and status quo
Looking at the total number of employees in finance, the gender ratio is relatively evenly split: Women account for 48% of employees. However, it is noticeable that the proportion of women decreases the higher the position. In 2023, do we still have to assume that the financial sector continues to be a male domain?
According to Statista, the proportion of women on the boards of major banks in Germany in 2022 is 14.4% - the highest level since 2006, when the statistics began to be kept.
Actually, a reason to rejoice. But overall, this figure is still quite low and it also says that 85.6% of leadership positions in the financial sector are held by men – that is anything but balanced. But why is that?
Possible causes for the inequality
On the one hand, this is due to the traditional and still popular family constellation: Both childcare and care of the elderly were and are often taken over by women. This often forces women to take on part-time jobs. And this in turn is poorly compatible with a management position – a vicious circle.
A study by the University of Mannheim also found that the financial sector is not perceived as an attractive industry by many women. 1,200 female and male students took part in the study. On the one hand, this perception is due to the fact that many of the female students cannot reconcile a job in the financial sector with their moral concepts. The image of the industry has suffered considerably since the beginning of the financial market crisis in 2007 and has not recovered to this day. In terms of public perception, the financial industry ranks second to last on the popularity scale - ahead of the energy sector.
Furthermore, the female participants in the study stated that the working atmosphere is said to be less collegial and characterised by rivalry. This "elbow mentality" goes down much less well with women than with men: one third of the male participants said that this was precisely why they found the industry exciting.
The most decisive reason, however, was the perceived difficulty in balancing family and career. Therefore, women prefer the corporate areas of marketing and human resources, while men favour the financial area.
Last but not least, the fact that there is a lack of female role models also is relevant. If there are not enough women in top positions to look up to and orientate oneself by, one's own motivation and confidence in one's own abilities may also decrease.
But why do other European countries perform much better than Germany?
No equal opportunities in the financial sector in Germany
A study by the HR consultancy Heidrick & Struggles, which examined the 30 largest European insurers in 2021, showed that the proportion of women on the boards of German groups was the lowest, at an average of eight percent. British insurers had a female quota of 28 percent on the board, in France it was 27 percent. That is about 20 per cent more women on boards than in Germany.
One of the reasons for this is that childcare is much better organised in Britain and France. Furthermore, there is a lack of programmes for the advancement of women, e.g. mentoring programmes. Especially after returning from parental leave, there is often a lack of opportunities to take on management positions on a part-time or job-sharing basis.
The German financial sector has been facing a huge challenge for years: the proportion of women in board positions is vanishingly small. At the savings banks and cooperative banks, the figures are shocking: the share of women in these companies is between 4.5 and 6.1 %. In cooperative banks there are even more board members named Thomas (93) than female board members in total (88).
If the increase in female board members in the 100 largest German banks is continued in a linear fashion, gender parity will not be achieved until 2098. But one cannot even speak of a linear development. Although the topic of diversity is receiving increasing attention overall, it is still moving at a snail's pace in the financial sector in Germany.
If companies want to be sustainably successful, the management teams must become more diverse. There are studies that show that for every 10% increase in gender diversity among managers, EBIT also increases, by a full 3.5% ¬– reason enough to promote the underrepresented gender more.
Tip for companies: The first step is to become aware of the lack of diversity in companies in German finance and to recognise it as a problem. Only in the next step concrete measures can be decided to increase gender equality.
Possible solutions
The first possible solution would be to reform childcare, as the examples from other countries have shown. Companies above a certain size or annual turnover should also be obliged to offer a women's advancement programme. There are certainly enough women who would be ideally suited for the financial sector in terms of their skills, but who do not pursue their career path confidently enough – in the mentoring programme, such things could be explored and women could be encouraged and promoted.
Overall, companies should be more open to alternative leadership models. Women with part-time jobs should not be disadvantaged when it comes to top positions. For example, there could be shared leadership positions: Two women each in part-time positions who share the post. For periods of leave or illness, such a model is better suited than the classical one anyway.
Certain quotas should also be anchored in the law so that equal opportunities can gradually be guaranteed more and more. At EU level, there is already a new regulation that must be achieved by 2026: 40% of all supervisory board members must be female by then. Munich Re has already met this requirement: At the Group, eight of the 20 supervisory board members are already female. Allianz has gone one better, with 42% of the supervisory board being female. Talanx also wants to fill at least every second vacant management position with a female applicant starting this year.
Gender Pay Gap: Germany lags behind here too
The gender pay gap describes the wage difference between women and men. In Germany, this gap was 18 percent in 2022 – the gross salary of women was 18 percent lower than that of men on average. This puts Germany in a poor position in the EU comparison, as was the case with the question of gender equality in management positions: the gender pay gap in the European Union averaged 13 percent in 2021. Countries like Romania, Poland and Slovenia do better: the gender pay gap here is less than 5 per cent. LHH Recruitment Solutions sets a good example:
"At LHH Recruitment Solutions we attach great importance to gender equality. We live the Equal Pay principle and therefore pay everyone depending on qualification the same – regardless of their gender. In this way, we create an incentive for women to work in management positions."
Stephan Bahns, Vice President DIS AG / LHH Recruitment Solutions
Conclusion
The financial sector needs an image change! It can be summed up that the industry is still a male domain, at least in the management teams. If finance wants to become more diverse, colourful and modern, it must rethink dusty and conservative processes and structures and allow a breath of fresh air. This is the only way change can occur and thus increase the attractiveness of the industry among women.