EDITOR'S TAKE: Why women will disproportionately disappear in investment banking redundancies - again
Last time investment banks made widespread redundancies - in 2008 -female bankers seemed to evaporate. As Forbes pointed out in 2009, female employment in financial services and insurance in the US fell 4.7% between 2006 and 2008. Male employment fell 3.2% over the same period.
On a longer timescale, the Wall Street Journal estimated that
141,000 women left the US financial services industry in the 10 years to 2010; 398,000 men joined.
Various explanations have been advanced for women's disappearance during difficult times.
Anecdotally, women do less well in appraisals (last year, Goldman was accused of systematically discriminating against women in its annual appraisal system). Then, there are more women in the non-revenue generating functions, which suffer most when costs are cut. Dubiously, some people also argue that poorly performing women who were being retained for reasons of political correctness are eliminated when lenience becomes a luxury.
However, there may also be a more prosaic and insidious reason why women disappear when the going gets tough: they don't like competing. In situations where individuals are required to self-select for competitions, women are far less likely to put themselves forward than men.
Gender differences in competitiveness were pinpointed by academics at Stanford University in 2007. In a study investigating why there are fewer women in high profile jobs, they asked men and women to compete in a simple tournament. Twice as many men entered as women, leading the academics to conclude that:
Even when women and men are equally successful in the competitive environment, when given a choice, women may not enter the competition at the same rate as their male counterparts.
They attributed this to two things: men are over confident and women simply have less urge to compete than men do. The outcome is predictable:
...low-ability men enter the tournament too much, and high-ability women do not enter it enough.
Transposed to a redundancy situation, the implication is controversial: when male and female bankers must compete hard to retain their jobs, women are likely to make less effort than men. High performing, non-competitive females risk being displaced by poorer performing, ultra-competitive males.
If true, the remedy is clear: for women to avoid being axed disproportionately in the likely round of redundancies in Q4, they need to start competing hard to remain in employment now. If they don't, the gender skew in investment banking may only worsen.
