Archive for the ‘Finance’ Category
Where the Women Aren’t: The Banking C-Suite
October is Carl Paladino National Diversity Month, so we decided to go back to the data we collected in our most recent Banking Survey and see if we couldn’t find a few fitting pieces to offer up in honor of these holy 31 days.
First, what we found, unsurprisingly, is a marked lack of women in the banking workplace. Somewhat surprising, though, was that this lack of women increases as you go up the banking org chart. That is, as you’ll see in the graphic below, of those bankers surveyed, 26 percent identified themselves as women. But of those surveyed who hold executive positions, only 11 percent identified themselves as women. The takeaway here is that females are still underrepresented at the top financial firms, and are severely underrepresented in the higher ranks at the top financial firms.
Second we found (again unsurprisingly) that the ethnic group that accounts for most (almost three quarters) of the entire banking industry is none other than the white male. However, interestingly, we found that the white male is far better represented in the banking industry than it is in the general population—almost 10 percent greater as you can see in the graphic below. In addition, Asians, the second largest ethnic group in banking, are also far better represented in the industry than they are in the wider U.S. population—about three times greater, in fact. On the other side of this diversity story, Hispanic individuals and African-Americans are severely underrepresented in the banking industry versus their representation in the wider population.
Third, we found a large lack of openly gay, lesbian, bisexual or transgender individuals in banking. Given that banking is perhaps one of, if not the most politically conservative industries in the United States, this might not come as that much of a surprise, but still, you would think that the lack might not be as significant as the pie chart below indicates: just 1 percent of the more than 2,200 bankers surveyed had identified themselves as an openly GLBT individual. Which begs the question: are GLBT individuals not welcome into the banking industry, not interested in the industry, or both?
–Posted by Derek Loosvelt, In The Black
Retail Jobs Surge, but Little Action Elsewhere: This Week in Employment
Is there any point in even mentioning the biggest job/economy-related story of the week? We all know by now that the recession ended in 2009, right? Officially, at any rate, if not by Warren Buffett’s more common-sensical standards. And we’re all equally aware that, whether we’re technically in a recession or not, things are still pretty bleak and likely to remain so for some time? Good. So let’s move on to the good stuff.
Frankly, economic distractions aside, it hasn’t been the best week if you’re looking for positive employment news. Sure, we found out that retailers are anticipating a slightly better festive season than last year, prompting a prediction of up to 650,000 temporary jobs during the period this year. And, sure, Macy’s alone is creating as many as 65,000 temporary positions. All of that is decent news, but temporary hiring is, well, temporary—and the example of the Census earlier this year suggests that, in this economy, once temporary jobs have gone, the unemployment rate is likely to go straight back up to where it was prior to the positions.
There was some positive news for the tech sector, where it emerged that spending is estimated to top $3.5 trillion in 2011—and all of that spending does tend to suggest that hiring will follow. But that was tempered by news of cuts in other sectors, as noted on Vault’s Employment Tracker. While the news that Abbott Laboratories is laying off 3,000 workers was the worst cut of the week in terms of pure numbers, it wasn’t the worst signal out there. That honor went to the news that Bank of America is cutting 400 jobs in its global banking and markets division. The reason for that—a slowdown in revenue from trading and advising clients—may well have industry-wide reverberations. And as we’ve learned to our cost over the last couple of years, when the financial industry isn’t making money, the rest of us may well have good reason to be nervous.
Wall Street Hearts Gay Marriage
Okay, that might be an exaggeration, but last night, while the eyes of the Wall Street media were still focused on Goldman Sachs’ sex-discrimination suit, the American Foundation for Equal Rights–the group that spearheaded the battle to fight California’s gay marriage ban–held a fundraising benefit in Midtown Manhattan, and executives from KKR, Blackstone, Carlyle Group, Goldman Sachs and others from the investment banking, hedge fund and private equity industries were in attendance to support the organization.
Such a public display of affection for the rights of gay and lesbians is a complete about-face by the upper echelons of the finance industry compared to how they dealt with this issue just a few years ago.
In Vault’s annual Banking Survey, administered each spring for more than a decade, we have asked professionals in the industry to comment on their firm’s diversity efforts with respect to gay, lesbian, bisexual and transgender employees, as well as with respect to women and minorities. It wasn’t too long ago that a majority of those surveyed would respond to the GLBT question with, at best, “no comment,” while freely providing scores of information about diversity efforts with respect to women and ethnic minorities. In addition, even when we did receive a comment, and a positive comment at that, about a firm’s GLBT diversity, the commenter, more times than not, did not wish to go on record; to boot, PR heads of firms continually lobbied for the removal (from the survey write-up) of any mention of GLBT diversity–even if their firm was painted in a very positive light.
In the past couple of years, however, this has been changing. We now receive just as many (or almost as many) comments about GLBT hiring practices as we do about women and ethnic minority practices. And PR representatives are now more than happy to highlight their efforts to hire and accommodate GLBT individuals.
This doesn’t mean, of course, that the finance industry (or America’s other corporations in other industries) have come close to embracing gay and lesbian rights in the workplace, but we have come a long way, paving the way for top-ranking executives, such as Ken Mehlman, a partner at KKR, perhaps the most well known private equity firm on the planet, to come out and speak their minds.
Last week, Mehlman (who, prior to joining KKR, ran George Bush’s reelection campaign in 2004), publicly acknowledged his homosexuality. In an interview, he told The Atlantic, “Everybody has their own path to travel, their own journey, and for me, over the past few months, I’ve told my family, friends, former colleagues, and current colleagues, and they’ve been wonderful and supportive. The process has been something that’s made me a happier and better person. It’s something I wish I had done years ago.”
Kudos, Mr. Mehlman, and here’s (glass raised) to hoping that your courage will inspire other current and future professionals, as well as encourage current and future corporations to take an increased pride in the individualities of their employees.
–Posted by Derek Loosvelt, In the Black
Did Goldman Break Its Diversity Policy?
For the 11th straight year, industry insiders named Goldman Sachs the most prestigious bank in North America in Vault’s latest ranking. In hindsight then, all the public mudslinging of recent years has done little to upset the bank whether it’s in attracting the biggest deals or the best talent. And according to our survey, bankers continue to want Goldman on their resume.
Ironically, a day after the rankings debuted, the bank’s prestige is under attack by three former female employees who charge, according to The Wall Street Journal, that “The investment bank practices a system in which women are paid less, promoted less and ‘systematically circumvented and excluded.'”
What’s astounding about the allegation is the repeated emphasis on intent, i.e., that the bank has a system that almost formulaically excludes women from getting promoted and compensated on par with their male counterparts. While the bank has called the suit without merit, stating that, “People are critical to our business, and we make extraordinary efforts to recruit, develop and retain outstanding women professionals,” it seems it is yet again in the red with the public.
Comments from our Banking 50 survey—culled from responses submitted by over 1,300 banking professionals earlier this year—provide further perspective:
“Supportive and respectful management”
“They could do a better job of promotion as well as placement into areas that are a good fit and utilize skill sets…”
“Having come up through the ranks, from a junior trader to now an experienced one in fixed income products, I must say that I’ve been very pleased with the level of training, support and guidance that I’ve received over the years from the firm…”
“I’m a firm believer in the culture at Goldman Sachs. The firm is team-focused, emphasizing integrity and personal development within the industry.”
“I think we do a good job at getting women and diversity candidates in the door, but for real success we need to work on better retention.”
And, finally a snippet of their Diversity Mission Statement from Vault’s Annual Diversity Survey:
“The firm’s commitment to diversity is evident at the most senior levels and is driven down through the firm by way of our seventh business principle: “We offer our people the opportunity to move ahead more rapidly than is possible at most other places. Advancement depends on merit and we have yet to find the limits to the responsibility our best people are able to assume. For us to be successful, our men and women must reflect the diversity of the communities and cultures in which we operate. That means we must attract, retain and motivate people from many backgrounds and perspectives. Being diverse is not optional; it is what we must be.”
So where does this leave the banking king: A chauvinistic boys club, truly diverse with a few unintentional victims, or the victim of a ploy to take advantage of its current poor reputation? Weigh in by leaving a comment, emailing In Good Company or connecting on Twitter @VaultCSR.
More reading: The complete WSJ report.
What other banks made the Top 10 most prestigious banks in North America this year?
A Second Stimulus, and Bad News for the Finance Industry: This Week in Employment
If one thing has become clear over the last week, it’s that the road to the midterm election is going to be a long, long, slog—especially for those of us who have set up alerts for the words “economy” and “jobs” in Google Reader and.
In case you somehow missed it, the biggest thing that happened to the world of jobs this week is that President Obama came out swinging as he attempts to save the Democratic majority in the House come November. Accordingly, almost everything he said throughout the week was tailored towards the issues that voters are most concerned about right now. Don’t know what that is? Here’s a clue: starts with “j”, ends in “obs.”
Mindful of the tarnished reputation of Stimulus I, the President was careful to avoid the term when rolling out his latest plan to, uh, stimulate the economy. His new plan has three main prongs, with each designed to spur hiring and investment in the economy: infrastructure spending, a 100 percent tax break for companies on new investments in plant and equipment, and increasing the budget for an R&D tax credit while also making it permanent. Oh, and there was also something about “holding the middle class hostage” that didn’t get any press attention at all.
Outside of Washington, one of the biggest hiring stories of the week turned out to not be much of a story at all. There we were all breathless with excitement over the news that Spanish bank Santander was hiring 6,000 in the UK. There was speculation on what it could possibly mean in terms of their plans for expansion (the company only has 22,000 employees in the UK).. And then there was another announcement: the company is hiring a mere 600 employees. Typos, eh?
Compounding the bad news for the finance industry was the prediction from Wall Street analyst Meredith Whitney that some 50,000 jobs related to the securities industry could be at risk. Her reasoning: that ” underwriting and advisory fees account for around 80 per cent of investment banks’ revenues and those areas have suffered badly.”
It was a bad week for those in aerospace and defense contracting as well: BAE Systems, Boeing and Lockheed Martin all announced layoffs, with tightened spending at the Pentagon prompting the firms to cut costs.
Elsewhere, it was another better-than-expected week for new jobless claims, with further “good” news to be found in the fact that there are now only five jobless workers for every open position. Woeful as that figure sounds, it’s a significant improvement from just a few months ago, when it was as high as six per opening.
There’s fresh hope on the horizon regarding that number as well: the birth rate appears to be among the many things negatively affected by the economy. All we need to do is hold on for a generation or so, and there will be more jobs than people. Right?
Post Work Socializing: Workplace Bonding or Boys’ Club?
AP Photo/Fritz Reiss
Your liver or your career?
A recent FINS article suggested that anyone thinking of trying to make it on Wall Street should drink up: the culture on the Street is apparently heavily dependent on after-hours booze-ups. While that likely won’t come as a surprise to anyone familiar with the financial industry (or many other industries, for that matter), it does raise the issue of workplace bonding—and the question of where to draw the line between an employee’s “fit” and their performance.
If the former broker cited in the FINS piece is to be believed, he was slow to realize that he was missing out on more than just a hangover by not participating in post-work drinking sessions. As he puts it, he lost the opportunity to forge “emotional connections” with his fellow employees—and specifically with bosses. And while not hitting the bar on a regular basis may strike some as the act of a responsible careerist, the failure to build those bonds may have cost the broker: he lost his job when the financial crisis struck.
The article doesn’t offer details on whether any of broker’s former colleagues who participated in the carousing were also let go, or attempt to discover whether the layoff was related to performance issues in addition to the economic difficulties. But the very fact that one can come away from the piece speculating on that underlines the difficulty of balancing a close-knit work group with a commitment to remaining professional at all times.
Most of us have had a colleague at some point who seems to get by on personal connections rather than the quality of their work. And it’s certainly not difficult to imagine a scenario where the boss’ drinking buddies are treated preferentially over a colleague who may be just as talented—or more so—but lacking when it comes to that all-important emotional connection.
Many of us also have stories of workplaces or departments where all the talent an organization could possibly need is hampered by a poor culture and lack of communication.
The challenge for execs, then, is in striking the balance between the two: encouraging bonding without having it spill over into an institutionalized boys’ club. To that end, a good starting point may well be to set aside some regular office hours for non-work activities for your employees—with a careful focus on ensuring that people socialize beyond their usual work groups.
Of course, it’s difficult to prevent groups of employees from forming cliques and excluding others: people naturally gravitate to those with similar interests. But those at an executive level need to exercise care should they become aware—or even choose to participate—in such groups. Because while close “emotional connections” can produce close-knit, well-functioning teams, they can also lead to blind spots over performance or conduct. And that’s something no business can afford.
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