By David Leithead, managing director at Michael Page Banking & Financial Services
A spotlight has once again been thrust upon gender diversity in the banking sector with the latest report by the Parliamentary Commission on Banking Standards concentrating on the male environment as a root cause for the financial crisis. Gender inequality has been a headline topic in the City for years and despite women now being well represented in some roles, the Commission focuses on imbalance on the trading floor.
The report contends that a greater percentage of female traders might have mitigated the financial crisis five years ago. It goes on to recommend that the main UK-based banks should publish the gender breakdown of their trading operations and, where there is a significant imbalance, state exactly what they are going to do to address the issue. The Commission even went as far as to advocate that the banks would have to report on progress within six months and thereafter in their annual reports.
Whilst the idea that better gender balance specifically suppresses excessive risk-taking on trading floors is debatable, moving the gender discussion from the board level to other areas within the finance sector is definitely helpful. Greater female representation on the board is important, but women need to be better represented across the sector. We have worked with a number of large banks on specific gender equality campaigns for over a decade, witnessing the benefits of having more female employees across the business. Fundamentally it reduces the environmental machismo and that has a positive impact.
But male domination of the trading floor is not necessarily the underlying reason why banks continue to fail attract female employees. At a fundamental level, to trade for profit is to take a risk, and the reward for one party in the transaction is winning. This desire to win is not exclusively a male trait. Women may not apply for trading jobs simply because of the nature of the job itself rather than a negative perception of the male dominated environment. Women tend to look for a broader proposition from a job, so to start with, banks should think about how they can paint a better picture of the job itself to appeal to women.
The longer term key to achieving a greater gender and cultural shift lies in attracting junior female applicants who can then grow with the business. The firms must provide the structure and opportunities needed to retain them into senior management positions.
There are a host of strategies but examples include having strong junior staff to provide necessary support to senior females who are juggling family commitments. When trying to hire senior women from other organisations, firms need to convince them that they’ll immediately get the kind of goodwill they enjoy in their current company, for example around work flexibility. Some companies make people earn this goodwill but that’s a mistake and could see them miss out on top female talent. Goodwill should be ingrained into the culture of an organisation.
Selling the job in the right way is vital but so are the channels that banks use for recruitment. Looking at a more experienced level, recruiting into banking roles, and the trading floor in particular, has typically been oriented around using personal networks and referrals. This is understandable in the current climate where banks want to cut costs, but it can also significantly limit the pool of talent to draw from. A recent example has been financial companies’ reliance on online networks like LinkedIn as a source of new hires. Our recent Michael Page Banking & Financial Services survey found that nearly half (42%) of employees in the sector either don’t have a LinkedIn account or have one but don’t use it. The same research also found that LinkedIn is used by more men than women, so placing a lot of reliance on channels like that is actually anti-diversity and works against banks’ other efforts to boost the number of women they have in the workplace.
It’s worth investing time and energy in getting diversity right as it creates a virtuous circle. Having more women in senior positions who have been with the businesses for a number of years is the best way to affect real and lasting cultural change, and that in turn perpetuates the better balance at all levels.