The melting pot pays on Wall Street
More than ever, diversity means dollars when it comes to retention, recruiting and access to new markets.
Wall Street firms are moving more aggressively to step up their diversity training programs - from gender sensitivity training to the creation of 'religion rooms' here and abroad.
Sure, you've heard it all before. A Wall Street bank gets sued for sex bias and a new diversity training program crops up: $2 million of last summer's $54 million sex bias settlement against Morgan Stanley, for example - the second largest payment ever in a case brought by the Equal Employment Opportunity Commission - is being used to create new diversity training programs at the firm.
But before you start yawning, wake up: The size of your bonus may now depend on your ability to get with the program. It's a new day in the diversity arena at most Wall Street companies, and now you - whether a trader, vice president or new recruit - are going to be held accountable for how well you play with others on the job, regardless of your colleagues' gender, race, sexual orientation, religion or nationality.
The reason: Many firms - from Morgan to Goldman Sachs, Merrill Lynch, and BNP Paribas - have begun moving in the last 4-6 months toward zero-tolerance diversity policies that tie pay, promotion and performance reviews to one's ability, in a word, to act and be 'global.' In your firm's scramble in a tight talent market to retain the best and the brightest, regardless of their cultural or lifestyle differences, you are a full partner.
Diversity as brand equity at BNP
Building a more visible and positive brand in the U.S. to woo the best of the best recruits is a big driver for change at BNP Paribas in New York. HR executive Barbara A. Gorman says sensitivity training, already underway in the firm's capital market operations, has just rolled out to its financing group.
The goal is two-fold, says Michel Magny, BNP's head of HR-to ensure managers are sensitive to the potential for gender and racial discrimination and well-versed in the 'do's and don'ts' of the types of behavior that can lead to a hostile work environment.
Gorman says, 'It's not necessarily that more people are complaining as much as the fact that employees are being educated more on the outside, and this climate is working its way into the firm.'
Some firms are being more aggressive than others at the top. At JP Morgan, members of the executive team are assigned to nine company diversity task forces to ensure the needs of these communities, including women, are heard by top brass. Progress on that score figures in the execs' compensation.
Goldman women train to get tough
At Goldman Sachs, employee surveys and studies of male-female communication styles are behind a new, intensified communications-training program for female vice presidents, aimed at helping women communicate more effectively and credibly with men at the firm.
'The company found that not only were the women not moving up in the organization, but also that there were informal barriers, with communications style issues contributing,' says a diversity expert working with the bank. 'Women were being told at promotion time that they didn't have the 'presence' to move into a higher executive role, but the problem was, how do you define 'presence'?'
The bank found that in sales and trading roles, women tended to be less skilled in 'report-style' methods of communication, including second-guessing as a method of challenging colleagues' assumptions in a group. Instead, women at the bank tended to seek consensus rather than aggressively push any one point of view and, as a result, were perceived as being ambivalent and weak within the more aggressive, male-dominated culture of the bank.
The result: a one-year mentoring program for top women vice presidents, under which each woman vice president is paired up with a senior leader of the bank, usually a male, for coaching around differences in communication styles and skills needed to communicate and lead credibly across male cultures at the bank and in global operations.
To make sure it works, Goldman has tied compensation to how well both coach and mentee perform and measure improvement. While it's too early to conclude how well it's working, the bank says promotions for V-level women are on the rise.
Deutsche gets religion
As religion in the workplace grows as a concern among diverse cultures represented in the bank's global offices, Deutsche Bank among others is including religious tolerance initiatives in their new retention and recruitment and pay-for-performance policies.
Deutsche now has what it calls 'All-Faith Rooms' to recognize the need by some for daily and intra-day periodic worshiping rituals required by some religions here and abroad. Private worship rooms exist at the bank's London and New York offices, and the rooms are available for use by all employees regardless of religious belief. The rooms are so popular among some employees that the bank has had to build a larger worship room in its London office to accommodate growing numbers of male and female Islamic worshippers.
And griping about any of it isn't tolerated-for a second, says Karen Meyer, global diversity chief for Deutsche Bank.Meyer. 'It's one thing to stay out of court, it's another thing to be able to attract a diverse workforce and then still another thing to retain it and get value from it-not only to understand our clients better but to mirror their values and to be sure we find the best, get the best and keep the best, regardless.'
'If you're more diverse, your chances for being the best globally increase,' Meyer says. Indeed, it's all part of a larger trend: A September 2004 survey of 1,780 HR and training executives by Boston-based consulting firm Novations/J.Howard & Associates says 2 out of 3 U.S. companies are broadening their diversity programs because of increasing globalization and the drumbeat of litigation. Novations CEO Mike Hyter says U.S. diversity programs used to be focused on addressing past grievances, but the pressure for a more proactive, comprehensive approach is increasing as more and more employees are hired from global cultures and as more execs are shifted from one global office to another.
Paying for lip service
To be sure, all of this does not mean that lip service around diversity programs has gone entirely the way of the junk bond. Online diversity training programs, for example, are having limited impact at some firms across the financial services industry.
'Online sensitivity training is a joke,' says one mid-level female executive at Charles Schwab in Manhattan. 'You go online for an hour a week and that's supposed to fix the culture? It's not nearly enough, and everybody knows it.'
But don't be fooled. In a tight, globalizing market for the best talent, don't assume your behavior isn't being closely watched by colleagues or those you report to. Think twice the next time you're tempted to skip the company diversity seminar or coaching program because you might pay for that decision right out of your wallet.