"WHEN I started out in the City 25 years ago nobody talked about women’s events or gender diversity - you just had to get on with it,” said Ellen Miller, a former senior executive at Lehman Brothers, the investment bank that collapsed. “Things like maternity leave were completely different then. Some of the younger women don’t always understand what change there has been in these things.”

But what hasn’t changed is the small number of women in very senior positions, despite a large increase in the number of women recruited at entry level. Most investment banks now recruit almost equal numbers of men and women graduates, but the higher you look, the lower the number of women - by managing-director level, women account for only 5% to 15% of staff. The question, then, is why do women leave?

“That’s the real problem,” said Miller. “Academics call it a ‘leaky pipeline’ which means that there are a variety of factors - some social, some managerial, some personal - that cause women to drop out.”

Miller made it to managing director before deciding to take a sabbatical; while she was away, Lehman imploded. Fortunately she had already begun to take steps to reinvent her career in a way that would allow her to spend more time with her children while giving something back to society - for example, by serving on the boards of charities.

The reasons why women leave the City vary. For Catherine Parker, 40, the decisive factor was its inflexible hours. She had risen to a senior position under a supportive manager who treated all his employees equally, but she found it too difficult to balance work with caring for two small children. “My gripe with the sector is not about working women but about working parents and the sector’s lack of imagination in refusing to accommodate us,” she said. Parker, who left last year, is now working part-time for a charity while studying for a masters degree in charity management.

While the recession did not play much of a role in Parker’s decision, a survey by Price Waterhouse Coopers (PWC), the professional-services firm, suggests that it may be encouraging women to leave the sector, particularly where redundancy packages are available and can be used for retraining or starting a small business. Almost three-quarters of the City professionals that PWC questioned believe the recession will be an opportunity for women to change careers, while 60% think that it will reinforce the glass ceiling.

Catherine Gannon, 46, a solicitor, was pleased when her employer, a leading City law firm, offered to make her redundant during the last recession. “I was expecting my second child and I didn’t want to be an employee any longer, but I needed a payoff to start my own business,” she said.

She was already disillusioned with corporate life: “In my experience the glass ceiling is very real,” she said. “Firms take in equal numbers of graduates who work their butts off, get to their early thirties, want children then leave. Firms are happy with that because they have had seven or eight years of high productivity at a fairly low cost.” She now runs her own law firm, Gannons, which spe-cialises in sex-discrimination claims.

Alison Pothier, 37, also left the City to set up her own business - twice. The first time she was in her early thirties. “The thing that I learnt about following the dream is that you compromise your financial stability,” she said. “I had not done my research on how to run a business and I had not put money aside for set-up costs.”

Fortunately she stayed in touch with contacts within investment banking who were happy to woo her back six months later. She continued to thrive in the sector; within a year she was a managing director. At the same time, however, she was building up her small business as a sideline - with the blessing of her boss at UBS. “I only left the City again in January last year to pick it up full time because I could see that the market was going to come down.” She now runs Inside Out Retreats, which offers complementary therapies.

May Busch, 49, spent 24 years in investment banking, most recently as chief operating officer at Morgan Stanley Europe, before leaving to write a book on career advice for women. She argues that women face not a glass ceiling but a labyrinth that can be tricky to negotiate without the right people to advise them on which turns to take.

“The great fallacy is that women leave for family reasons,” she said. “There are very few cases where that’s the real reason.” She said that one of the big reasons behind the leaky pipeline is that mid-level women start to think that their opportunities to progress higher may be limited. This means the cons of staying - long hours, hard work, competitive environment - outweigh the pros, which include challenge, excitement and money.

Pothier said that this is a tough time for both men and women. “As a graduate you are well trained and given a lot of attention but as soon as you pass out of that stage you are in a no-man’s land. There is little training at this level but you are carrying the heaviest work-load, doing the longest hours and have the largest responsibilities.” Both men and women at this level would benefit from more sensitive leadership and better development, she said.

It is within companies’ power to reweight the balance in favour of staying, Busch said. All it takes is a manager, mentor or other trusted colleague telling women that they should stick it out because there are opportunities for them. That’s what kept her in the game. “Every single year during my twenties and early thirties I was going to quit because it was hard, but someone was there to tell me to stay and to show me what those opportunities were.”

Find out more

The Sunday Times Recruiter Forum is a platform for employers and industry experts to communicate with job candidates. They can share good practice and discuss the issues affecting recruitment and retention in today’s market. To have your say on the week’s topic go to timesonline.co.uk/recruiterforum .

Firms wishing to get involved should contact brendan.jones@newsint.co.uk

Upcoming Sunday Times events for HR professionals: Beating the recession: 1 Organisational restructuring (June) Beating the recession: 2 Preparing for the upturn (July)

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