New research has explored the impact of career breaks.

Women in the Australian financial services sector are less likely to be promoted due to systemic gender bias, reducing their ability to navigate their chosen career path and realise their potential.

This is a core finding from research conducted by investment management company, Ardea Investment Management’s (Ardea IM) Head of Research, Dr Laura Ryan, in collaboration with researchers from the CFA Institute (Australia) and the Australian National University.

Dr Ryan said the research was designed to examine whether there was a statistically different promotion propensity in the sector according to gender.

“Our work shows there is strong statistical evidence of behavioural differences that lead to gender bias in promotions, mostly because the prevalence of ‘gifted promotions’, those received without being requested by the employee, strongly favours males,” Dr Ryan said.

“There is an urgent need for the Australian financial services industry to develop and adopt a standardised framework for corporate promotion policies to mitigate the systemic bias in current promotion rates for all genders.”

The research found women were substantially under-represented in the pool of people receiving unsolicited promotions by 25%, despite comprising 52.8% of total employees in the sector (WGEA, 2021). This was despite objective criterion such as education and experience being equal across gender.

The Australian findings are supported by international research that has identified that social bonds between male executives and their male managers is a significant factor in explaining higher promotional rates, enhancing their perceptions of “employee potential” even in the face of female staff exceeding their potential rating in formal annual reviews.

“The much higher proportion of gifted promotions to males suggests a degree of unconscious bias, which leads to assessment of potential based on generalisations and preconceptions rather than objective parameters,” Dr Ryan said.

The research explored the impact of career breaks and found that women should stay on the front foot in asking for promotions after returning to work.

The proportion of people requesting a promotion who have not taken a career break is uniform across genders, but women who ask for a promotion are generally more successful (25.9%) than men (17.2%).

However, after taking a career break of at least six months, women showed a substantially lower propensity to request a promotion than men.

“There is no doubt that women in financial services are leaning in to request promotions, which dispenses with the myth that women are missing out due to unwillingness to put themselves forward,” Dr Ryan said.

“Their higher success rate when asking for promotion indicates that there are no objective reasons for them to not to be receiving gifted promotions at a similar rate to their male colleagues.”

Ardea IM CEO, Stephen Clout, supported Dr Ryan’s call for a better framework for promotions policy in financial services.

“The financial services industry is noted for its analytic approach to business and investment, yet it is clear that it could do so much better by applying the same principles to staff assessment and advancement.

“Women comprise over 50% of financial services employees. This obviously means that they also represent at least 50% of our potential and it is important to have mechanisms in place to ensure we all realise the benefits of this irrespective of gender,” he said.

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