Financial Services – Living in Interesting Times
It is a real pleasure as well as a genuine privilege for me to once again find myself working within Financial Services Executive Search, and working on behalf of some of the leading names within the Investment Banking sector in particular.
In this my first piece that I am writing following my appointment to lead our practice at Bailey Montagu I believe that it is noteworthy (and somewhat surprising) to observe that, as well as the core macro issues that all firms face currently, and Investment banking divisions within those firms in particular – the challenges that Investment Banks face with respect to Diversity and Gender Pay Bias, and the attraction, retention and reward of women within Banking continue to be very much a work in progress. I choose my language deliberately here, because in reality we have been discussing the issue of a “ Gender Pay Gap “ for a number of years now. It would seem that having identified this issue – and having assigned an almost passive or abstract descriptive for it – i.e. “ Gap “ suggesting that it may have somehow arisen accidentally, it might be time to call it what it is – Bias – whether consciously or un-consciously arrived at.
Now although the concept of conscious versus unconscious bias has been a reasonably well understood issue for some years now, it is very clear that many organizations despite having evolved genuinely sophisticated performance review processes such that all employees regardless of Gender are evaluated on a consistently applied set of metrics, those organizations continue to struggle with the challenges around this subject.
Much of it I believe arises from an inability to address key issues around equality of opportunity – which are most affected by unconscious bias. This itself becomes a core driver of the inequality of reward that materializes in any Gender pay Gap analysis. Women in banking in particular are significantly affected by this, but much of the Professional Services sector suffers with the same problem. By way of illustration, a simple example of unconscious bias in decision- making may be based on the simple assumption that a female colleague may have more limited time available to work on a significant project because of perceived time constraints around family commitments. Therefore this person is not staffed onto a significant transaction/ client facing opportunity, with the role going to a male colleague who it is perceived has unlimited time available to devote to the project. On close examination this is clearly, or ought to be seen as a clearly ridiculous and gender biased set of assumptions. It should be perfectly possible – and indeed it is – to be able to contribute time to a project regardless of which hours in the 24 periods those hours happen to be – whether you are a male or female team member. The team should be able to be structured such that all eventualities are covered. The reality is however that all too often this is not the case. The effects of this failure feed directly into the reward gap issue, and also have a similarly damaging effect on the acquisition of experience. This issue itself then feeds into the whole performance review process resulting in potentially imperfect outcomes for female employees. The use of sophisticated data -visualization tools has started to shine a light on this problem, but in reality it will take regular on-going training and education as well as strong leadership in these firms if real progress is to be made. It must be understood that simply rebasing compensation structures to “ level the playing field “ will have nothing more than the effect of temporarily window dressing the problem. Without fully understanding the drivers that resulted in these differentials arising in the first place, and without putting in place on-going training and development throughout the organization at all management levels, then this issue will continue to arise again and again in the future.
As part of my new role at Bailey Montagu, along side my Executive Search practice, I am greatly looking forward to working with Human Resource professionals in the Banking industry as they seek to understand and analyze the challenges that have arisen with respect to these and other issues around talent acquisition, retention and reward. The on-going need to focus on these issues is critical if Banks wish (as they should) to represent themselves as genuinely equal in all areas of their employment and opportunity.