Diversity now
By Richard Donkin, independent journalist
When Barclays Capital, the investment banking arm of Barclays, the banking group, revealed in December that it was offering bonus payments to recruitment agencies if they could find talented staff from the gay and ethnic minority communities it caused more than a ripple in the City.
The bank, which normally pays head hunters a fee equivalent to 27.5 per cent of a recruit's first year salary, said it was prepared to raise the figure by 25 per cent for successful candidates recruited from underrepresented groups.
Whether or not the move will be successful in concentrating the efforts of recruiters, the message from Barclays Capital was the clearest signal possible that the big banks are seeking to make tangible commitments to creating a greater diversity of backgrounds among their staff.
Diversity, a growing issue for US employers for some years, has moved swiftly up the agenda among London-based institutions in the past 12 months, particularly among banks dominated by American managers who want to see US-style initiatives replicated in the City.
Most banks now have diversity policies, a requirement in law in the US. But the way these policies are applied varies widely and recruiters and managers are still struggling to broaden their focus. Most of the big investment banks are making this a priority because they understand that there is a strong business case for having a diverse workforce. The more diverse the people, the more diverse the ideas, says Stephanie Docherty, a director of Michael Page City responsible for finance, compliance and operations.
But there is still a big job to do. It's about changing mindsets, not just among managers and recruiters but among potential candidates who might have had the impression previously that they would have had no chance if they had applied for an investment banking job. Diversity is not just about the obvious issues of race, gender, sexual orientation and age. It's about people's background, experience and values, where they come from and how they are brought up.
As Matthew Barrett, chief executive of the Barclays Group spelled out his approach when he launched the bank's equality and diversity programme over a year ago, "This is not about political correctness," he said. "Equality and diversity is not a 'nice to do', but a significant part of the answer to our business challenges."
The potential business dividend for a diverse employee base is substantial. The Asian British community alone earns an estimated £5bn a year in disposable income according to a recent report by the British Bankers Association that looked at access to financial and business support for ethnic minority businesses. The report found what it called a 'communications gap' between banks and their customers among ethnic minorities. Increasingly banks are looking to their diversity policies in recruitment and development in order to bridge this gap.
Some of these policies are beginning to win recognition from equal opportunities bodies. HSBC and J P Morgan, for example, have won awards from Opportunity Now, the business-led campaign for improving job advancement opportunities for women.
At J P Morgan Chase, which has developed perhaps the most sophisticated approach to diversity of all the City-based investment banks, Frank Howell, the bank's London-based head of diversity, has been holding a series of meetings with recruiters in an effort to persuade them to broaden their reach. The meetings, he says, "have met with a mixed reaction - Some have thought that J P Morgan is not serious about diversity. There are others that don't really see the problem."
Too many recruiters, he says, have been content to stick with their traditional hunting grounds. "A lot of them don't know what to do or where to look. It's important for us that they are tapping into organisations such as the Afro-Caribbean Finance Forum, Women in Banking and Finance, and the Pakistani Bankers Association," says Mr Howell.
The Interbank Diversity Forum, a group made up of many of the City's leading banks, has been co-ordinating efforts to encourage greater diversity in recruitment and plans to meet with recruitment professionals in the next three months to ensure that diversity policies are understood.
Stephanie Docherty, who has been leading the diversity drive at Michael Page, says "This is not about positive discrimination. The banks still want the best people. But the definition of what is meant by 'best' needs to change and we need to look beyond those with typical qualifications for finance such as chartered accountants and people working in other banks."
Copyright Richard Donkin 2002
