BANKING & FINANCIAL SERVICES

DIVERSITY IN THE BANKING & FINANCE SECTOR A WAY FORWARD

DIVERSITY IN THE BANKING & FINANCE SECTOR A WAY FORWARD

People strategy is key to the success of every organisation. Having a people strategy that includes diversity is part and parcel of most corporate agendas, ever since equal opportunities legislation was first enshrined in law several decades ago.

And yet diversity, or the lack thereof, continues to be a hot topic for debate. A recent report by the Sutton Trust claimed that private schools are still a passport to top jobs in Britain, giving fee-paying pupils a head start when it comes to future prospects.

This year’s International Women’s Day theme was “pledge for parity”, highlighting the fact that progress towards gender parity has slowed in many places. “The World Economic Forum predicted in 2014 that it would take until 2095 to achieve global gender parity. In 2015, they estimated that a slowdown in the already glacial pace of progress meant the gender gap wouldn’t close entirely until 2133,” said the campaign website.

Survey findings from the Chartered Institute for Personnel Development (CIPD) reveal that the proportion of female employees decreases with seniority in two-thirds (67%) of organisations in the UK and just three in ten (31%) have taken action to improve the gender diversity of their board.

While it’s true to say that recruiters are focusing on increasing the number of gender diverse submissions and placements made, their clients are not necessarily accurately measuring the impact of this on their organisations. In some cases, diversity, rather than becoming a cultural shift, has become more of a tick-box exercise.

We investigated further with leaders across a number of banking and finance institutions to see why the lack of diversity continues to be an issue in this sector.

BANKING & FINANCIAL SERVICES

BANKING & FINANCIAL SERVICES

Whilst most participants agreed that Black Asian Minority Ethnic (BAME) were a more integrated part of the workforce than in years previously, most agreed that this only went so far, and that this change hadn’t reached senior level positions. Most also agreed that gender parity continued to be a major issue.

The majority also agreed that diversity has to be approached under one policy, rather than siloed into different areas. There are areas with combinations of diversity, such as female BAME, which can only properly be tackled using a holistic approach.

There is a prevailing sentiment that diversity is another target to hit, while culturally, hiring like for like is the easiest path to follow. In other words, once the diversity target has been hit it’s business as usual. Partly, this is due to the fear factor – greater diversity means a greater investment in onboarding and training, and the overall outcome/results harder to predict. In some cases the bias may be unconscious, but there all the same. Short term-ism is very much in play, where managers seek to find the candidate easiest to fit within the team, rather than someone who will have different view and inputs and may take longer to assimilate. In many cases this is due to business pressures placed on them.

HOLISTIC ISSUES FACED BY CLIENTS

Hiring managers face the demands of helping business units meet their business targets, and following a diversity agenda. With deadlines and productivity targets to consider, and without the proper support, hiring managers are less likely to pursue diversity as a cultural way forward but rather as a tick box exercise.

Some simply don’t buy into the diversity argument, and in turn become a negative role model within the organisation. Even where this isn’t the case, because diversity is a cultural issue the bias against a diverse talent pool may be unconscious.

Those that did buy into the notion still cited the “fear factor” as a limiting factor. The inherent risks of hiring from a diverse pool of talent bred a reluctance to embrace it properly.

ISSUES THAT HIRING MANAGERS FACE

The business case for diversity is clear. Countless studies have shown that increased diversity equals increased business performance.

Last September Mckinsey & Co published a report stating that $12 trillion could be added to global GDP by 2025 by advancing women’s equality.

Another Mckinsey & Co study entitled Why Diversity Matters, found that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians.

“More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns. This in turn suggests that other kinds of diversity—for example, in age, sexual orientation, and experience (such as a global mind-set and cultural fluency)—are also likely to bring some level of competitive advantage for companies that can attract and retain such diverse talent,” says the report.

THE CASE FOR CHANGE

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ALL TALK, NO ACTIONSteve Allen, Head of Operations, Corporate Banking at Barclays, personally leads his Operations efforts on diversity. So we asked him: why is diversity still a topic for discussion in this day and age? “There has been an immense amount of talk and, certainly in my view, not enough action across the various industries despite efforts,” states Steve. “There’s been lots of analysis, lots of research, lots of stats, lots of different ways of professing how the situation can be improved. But that hasn’t yet translated into enough action. There has not been enough sustained action that we can see measurably, which is changing attitudes.”

“What gets measured get managed,” adds Steve, outlining Barclays’ three-pronged approach to the diversity issue:

1. Holding everybody accountable, from c-suite down. “There needs to be that cascade, down and back up, that real transparency on the accountability for a change in philosophy, in behaviour, being clear on who is accountable front to back, top to bottom for that change.

2. Measurable progress. “There has to be clear and very transparent indicators as to whether progress is or is not happening.”

3. Championing success. “Organisations have to be brilliant at championing and marketing success that does happen.”

In his search for talent, Steve has often looked outside the obvious pools of talent. “One thing that has proved very successful is that I mandated that for every director level hire in my organisation that there would be a female MD on the interview slate.”

“I also promised to publish to my team when we appointed a director how many females met the final interview stage. Two very simple things but it really did set the tone that we were serious about trying to improve the diversity of our candidate slate. It didn’t mean every director that we posted was a female because it’s the best person for the job, but we made sure that we had a clear commitment to get a diverse candidate slate and have balance on the interview.”

The key to this strategy is that news of every opening reaches every part of the organization; to those whose experience may not seem, on the surface, to be a natural fit.

Steve goes on to explain how this works in practice: “The well-trodden assumption is that the hiring manager knows best, I don’t agree with that. I don’t believe that I have the ability all the time to know exactly what I’m looking for a particular role; I have to be much more open minded than that. When the recommendation for a particular director role recently came down to the final two, one was a female from a different part of the organization. She didn’t get the job because of her technical capability, but because of the broader skills.

“It was the attitude she demonstrated, the forward looking opinions she had, the network that she had clearly built up in her previous role, and her motivation. She aced the interviews and brought some different dynamics to the team, even though her experience was not something I had considered having on my team.”

“I’m not convinced that there is an extra investment case to be answered,” states Steve. “Anyone who starts is going to need feedback, coaching, guidance, you can’t think in such a short term way, you’ve got to take a medium to long term view.”

Among the calls to action made by the charity, The Sutton Trust, was more work to open up top jobs to a more diverse talent pool as well as for companies to publish more information about diversity within their organisation.

Achieving a truly diverse workforce means going deeper than targets and looking at each business unit individually and the hiring trends therein, rather than a purely statistical approach.

In order to assess the effectiveness of a diversity policy, simply looking at targets doesn’t provide a clear assessment on the diversity within locations, at different levels and within teams. To achieve the results of a diverse workforce means looking at the current trends per office or the recruiting behaviours and candidates selected per office, rather than a statistical approach across offices. In particular, hiring managers need support from C-suite to be able to embed a truly diverse workforce.

Diversity has to include a cultural change, which consistently encompasses all talent pools when searching for talent at any level. This may include looking at longer periods of training and/or accepting longer periods before the new talent becomes productive. It has to be a top down approach, with hiring managers that have full support to implement diversity strategies and all that this means to the organization.

As the McKinsey report concludes: “Most organizations, including McKinsey, must do more to take full advantage of the opportunity that diverse leadership teams represent. That’s particularly true for their talent pipelines: attracting, developing, mentoring, sponsoring, and retaining the next generations of global leaders at all levels of organizations. Given the higher returns that diversity is expected to bring, we believe it is better to invest now, since winners will pull further ahead and laggards will fall further behind.”

THE BROADER SOLUTION

Huxley Banking & Financial Services is recognised as one of the market leaders in banking and financial services recruitment. Working with some of the world’s best known financial institutions to help them to identify, attract and recruit business critical talent.

We have a broad global reach, and deep local knowledge to be able to support our clients and candidates wherever they are in the world.

The Huxley Family also includes Huxley Engineering, Huxley Supply Chain and Huxley IT.

ABOUT HUXLEY BANKING & FINANCE

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Sam has spent her career with HSBC since 2000, working across various functions. She is currently Head of Business Management for HSBC Commercial covering the Channel Islands and Isle of Man. Sam has spent her career developing people and driving business across different areas of the business. Sam is also the Co-Chair of Balance UK, the voluntary Employee Resource Group which supports and drives gender diversity in HSBC, with over 3,000 UK members and over 33,000 members globally. She is also a speaker for Opportunity Now. Sam is an Associate of the Chartered Institute of Bankers.

Steve is Global Head of Operations for Barclays Corporate Banking and a member of the Corporate Banking and Global Operations Executive Committees. He currently leads a team of over 5,000 colleagues that provide Lending, Trade, Payments and Client Service capabilities to a broad range of domestic and international clients. Prior to his current role, Steve was Head of Global Payments – a division that serves over 100,000 clients and processes 10m+ transactions a day with a value often in excess of £560 billion. Steve has previously worked at Citigroup where he gained extensive international Operations and Customer Service experience having held a number of senior management positions in Citigroup’s Corporate and Investment Bank and Global Consumer Bank. Before leaving to join Barclays, he was Executive Vice President, National Director of Client Services for Citigroup based in New York.

Marcia Jones is the founder Managing Director of Inspired1 Ltd, a Human Resources & Logistics Consultancy Services company. A professional certified coach, a member of the International Coaching Federation (ICF) and the European Mentoring & Coaching Council (EMCC). She has her own practice as a Personal, Executive and Business coach with clients in the UK, America, and the Caribbean. A Fellow of the Chartered Institute of Personnel Development (FCIPD), with an MA in HR Strategy, she has over 25 years working in the Corporate sector in senior HR roles including membership of the Executive Committee at International and Global level. Marcia specialises in coaching individuals, executives and business managers helping them to increase their effectiveness and unlock the blockages that prevents them from having a fresh perspectives on their challenges in order to maximise their potential and achieve their goals, objectives and productivity. With a passion for transformation of self and others, Marcia combines her coaching skills with her HR management experience of working with executives, the business and individuals to facilitate wholeness and transformation of self or any situation to achieve a positive desired outcome.

Frank Douglas was the Executive President, Group Human Resources Director for Misys, a global technology company. Prior to that role, he was the Group HR Director for Transport for London/TfL. Frank has also served as the Executive Vice President, Group Human Resources Director and Pension Trustee, for Scottish and Newcastle Plc (S&N). He also served in senior HR roles at Royal Dutch Shell, based in The Hague. In 2011, Frank was listed as amongst the 30 most influential HR Directors in the UK. In addition, he is a Non-Executive Director of the Chartered Institute of Personnel and Development/CIPD, which is the governing and accreditation body for HR professionals in the UK. Also, Frank has been a judge for the HR Magazine determination of the top HR practitioners in the UK. Frank came to the UK, from the US in 1997 and worked for British Telecom. During Frank’s tenure at British Telecom, he won the Chairman’s award for Excellence (only give to one employee a year). To this day, he is still the only HR manager to ever obtain that accolade at BT. In addition, Frank was the first FTSE HR Director invited to speak to members of the Royal Household staff, at Buckingham Palace. Most recently, he addressed an audience of senior business leaders at Stormont Parliament in Northern Ireland. Frank has a strong passion for developing leaders and organisations in the UK, USA and emerging markets. Frank is a certified Myler Campbell executive coach.

Tas is Senior Run Lead for Product Processing with the Lloyds Commercial Banking CIO area. She is responsible for a portfolio of ~130 applications with a team of 40. Prior to her current role Tas was responsible for supporting all Front Office applications. She has been at Lloyds for 5 years. Before working for Lloyds Tas held numerous roles at Barclays Capital during an 11 year career, ranging from Head of Global SAP Support to Commodities Service Manager. Tas is committed to supporting junior resources and ensuring that talented resources are given opportunities to flourish.

Rashni is the Regional Head of Supply Chain Management, Europe and Americas for Standard Chartered Bank. She is responsible for managing third party spend across all categories. Rashni has worked for Standard Chartered for over a decade. Rashni is also Chair of the Standard Chartered Diversity and Inclusion Council for the UK, as such is very much committed to equality and inclusivity in the workplace.

Steve AllenManaging Director Global Head of Operations Barclays Corporate Banking

Sam Cooper GrayHead of Business Management HSBC Commercial

Marcia JonesFounder & Managing DirectorInspired1 Ltd

Frank DouglasCEOCaerus Executive

Taslin BogaProduct Processing | Run Senior Manager Commercial Banking CIOLloyds Bank Commercial Banking

We would like to thank all the individuals that participated in in workshops and in the development of this report. We would also like to thank some of the key contributors, who are highlighted below.

Rashni Chahal Holden Regional Head of Supply Chain Management, Europe & AmericasStandard Chartered Bank

www.huxley.com

Ami FakeyPartner | Banking & Finance (Europe)Huxley Banking & Financial Services+44 (0)20 7469 5142a.fakey@huxley.co.uk

Ashley McCuskeySenior Client Relationship ManagerHuxley Banking & Financial Services+44 (0)20 7469 5028a.mccuskey@huxley.co.uk

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