The publication in Q2 of the latest report by the Parliamentary Commission on Banking Standards once again put the spotlight on gender diversity in the sector, with the report focusing on the trading floor as the place in which the codes of conduct have gained least traction. The report was damning about the incentive culture but also broadened that to attack the overwhelmingly male environment as a root cause of the problem.
Improving gender balance
The commission believes that the government’s view on women in the board room should be equally relevant to the trading floor, stating explicitly that improving gender balance on the trading floor would be beneficial for banks.
The commission recommends that the main UK-based banks should publish the gender breakdown of their trading operations and, where there is a significant imbalance, state what they are going to do to address the issue. The commission advocates that the banks would have to report on progress within six months and thereafter in their annual reports.
What we know is that the investment banks have been working to increase female applications for trading jobs for many years, and have certainly have made progress. As a recruiter we have been conducting specific campaigns in this area for at least 10 years.
Whether better gender balance specifically suppresses excessive risk taking is a moot point but certainly it starts to eradicate the environmental machismo and that is healthy for the overall business. Clearly the key is not just attracting female applicants but also retaining them into management positions – without that, culture may not be changed.
At a fundamental level, to trade for proft is to take a risk, and the reward for one party in the transaction is winning. Desire to win is not exclusively a male trait. But it may be that women look for a broader proposition from a job and we believe that banks need to consider how to paint that picture to female undergraduates who may not be attracted to the job per se, rather than put off applying purely by a preconception of the maleness the environment.
In our view any kind of pressure from the government on banks to publish stats on trader gender should be greeted with suspicion – improving gender balance is necessary and good, but headlining the trading floor as if it is the sole issue, may be interpreted as a political manoeuvre to deflect attention from the broader problems in the industry.
From a recruitment point of view, recruitment of traders has often been oriented around using personal networks and referrals, and that is exacerbated in the current climate where banks want to cut down on recruitment fees – but very obviously that kind of strategy is anti-diversity. In the future banks may find that this period of prolonged pressure on cost, and the consequent flight to direct recruitment, has set back efforts to improve future leadership pipeline, both in front office and support functions.
In Q2 we published our annual gender diversity monitor where we report on the gender splits in our placements.
To speak to someone about your banking and financial services recruitment process, get in touch with Simon Lindrea.
T: 020 7776 5959