Diversity survey sheds light on hiring

Investment banks have to interview eight men to appoint one IT specialist, but just six women to achieve the same result. Black candidates are the least likely to get a first interview based on their CVs but, when they are seen, they are almost twice as likely as white candidates and almost three times as likely as Asians to receive a job offer.

These were some of the results of a diversity survey of applicants for IT jobs through McGregor Boyall, a financial services headhunter. Jobseekers interviewed by the firm are asked to fill in a questionnaire which it uses to analyse success rates by gender and ethnicity.

Laurie Boyall, managing director, said investment banks' focus on diversity led to the research. "When clients ask us about our diversity awareness, we can now give them some hard information," he said. McGregor Boyall aims to expand the research to cover all finance jobs.

Research from one headhunter is hardly conclusive, but it is an attempt to put information into the public domain.

Boyall is reluctant to speculate why, for example, black candidates are interviewed less frequently but are more successful when they make it through a bank's doors.

Diversity is a hot topic in investment banks and for years leading institutions have had initiatives in place to promote the subject. Nevertheless, it is almost impossible to obtain information about the effectiveness of such strategies.

Citigroup says more than 80% of women who take maternity leave return to work. At ABN Amro a policy of paying a "return-to-work" bonus to women who go on maternity leave resulted in return rates rising from 85% to 93%. JP Morgan said applications from women for graduate positions were up 40% this year. There are no details from any of the banks on ethnicity.

The banks' reticence stems from a traditional reluctance to reveal trade secrets, embarrassment about slow progress and - not to be underestimated - poor data collection. Most do not systematically measure and track the make-up of their workforces in sufficient detail to identify successes and blockages.

Those that gather data typically focus on gender, which remains the overriding diversity issue.

Marshall ACM, a consultancy, is seeking to plug the information gap with an online diversity benchmarking tool for investment banks. Marshall believes employees will be more willing to reveal personal information to it than to their personnel departments. The tool offers drop-down menu answers and open-ended questions inviting comment. Companies can use it to find out about flexible working practices, family responsibilities, perceptions about pay equality and basic information like gender, age and ethnicity.

The tool was designed by Geri Carden, a former trader who left her job to have children 10 years ago. Last year, she completed a research project at the London School of Economics about women in investment banking. Interviews with 30 women revealed a widespread perception that diversity policies were not working. Issues included unequal pay, having less power than men of the same level and feeling unable to achieve a good work-life balance because their male bosses worked long hours.

The most useful initiatives were networking groups, having a female mentor and role models. Carden said: "There's a big retention problem among women. They come in at entry level in a ratio of about 40:60 with men but then they leave."

She believes banks need to make the moral case for diversity more strongly. "People talk about the business case because they think that's what will make people sit up and think. But a company has to make so many sacrifices to retain more women. If you approach it from a moral standpoint you're more likely to have a case," said Carden.

Nigel Nicholson, a professor at London Business School who studied diversity in the City of London, said banks were not always clear on their business case for diversity. Employers needed to ask themselves why they wanted diversity.

He said: "Is it a cosmetic thing - that they want a workforce that looks representative? Do they want to mirror their clients? Or is there a genuine awareness that there's a lack of dynamism which greater diversity could remedy? I don't think enough banks appreciate the latter."

As a psychologist, Nicholson believes banks are right to concentrate the bulk of their diversity efforts on recruiting and retaining women. Although any number of groups, including ethnic minorities, may be as under-represented as women, a better gender balance will have the biggest pay-off in creating a more dynamic business.

He said: "I don't believe in race because ethnicity does not play a huge part in how people behave. But women think and make decisions differently to men. If you had 50% women on the trading floor, it would change the climate dramatically. Women tend to over-trade less than men, for example."

Nicholson said that, after gender, taking people with non-standard educational backgrounds would be the most meaningful form of diversity. "Banks can afford to take the cream and don't need to bother with anyone else. They don't want to change the parameters by which they take the first cut. But what's the evidence that a high number of UCAS points and a 2:1 degree leads to better performance at work? If you took that approach, you'd get a better racial mix as well," he said.