Is the Weak Economy and Slumping Job Market Having a Negative Impact on Diversity?
Given the relatively weak job market and financial stall, it's fair to question whether or not banks and investment firms are devoting as many resources to diversity initiatives as they may have in better times. However, according to some in the industry, those efforts remain unaffected.
Milton Irvin is a UBS managing director and Head of Diversity and Inclusion for the Americas. He says the investment bank's diversity programs continue to be a multifaceted approach, devoted to "leveraging talent, impacting culture, and delivering on and taking advantage of marketplace opportunities."
Major global banks and top investment firms have a variety of structured efforts in place, including internships, immersion events, and mentorship programs. Like many of its competitors, UBS runs on-campus and company sessions such as its Freshman Forum and Sophomore Symposium aimed at getting undergraduate and graduate students interested in the financial sector.
The short sessions at UBS offer a glimpse into the trading, sales and research side of the firm. While these one- to three-day programs are not only geared to women, minority, and Lesbian Gay Bisexual Transgender (LGBT) candidates, Irvin says there is considerable focus on bringing diverse candidates to these events. "We look to give students exposure to the business, but particularly exposure to the revenue side."
Deutsche Bank's New York hosted an LGBT Summit titled "Out on the Street" dedicated to advancing the ranks of lesbian, gay, bisexual and transgender banking leaders. Bank of America Merrill Lynch, Barclays, Citibank, Goldman Sachs, and Morgan Stanley also participated in the event. Participants discussed progress to date-particularly the emergence of private banking and advice-giving practices for gay couples, by gay advisors. Recent statistics show three out of four members of the LGBT community have annual household incomes above the national average.
Mentorship is also a critical piece of the diversity puzzle. Currently, UBS is running a global sponsorship and career development initiative focusing on senior level women at the investment bank. This concentration on positions of authority-money-making, C-suite, and client-facing-could be one of the most important moves to show how diversity is prized throughout an organization.
Many of the world's largest banks work with Historically Black Colleges and Universities, female colleges and diversity organizations at targeted universities, to increase their prospective internship and job pool. They also partner with leading diversity organizations, including Management Leadership for Tomorrow, a career development nonprofit devoted to African Americans, Hispanics and Native Americans professionals, and The Robert Toigo Foundation, a not-for-profit organization focused on increasing diversity in the finance industry.
Those in the field say that initiatives need to not only be focused on recruitment, but also on a much more critical issue-retention. Irvin says there is clearly more to be done to hold onto qualified talent. The problem in the finance sector, says Irvin, is that highly qualified professionals-minority, female, gay or lesbian-can easily find other opportunities elsewhere or on the entrepreneurial end.
Jennifer Hatch, president and managing partner at Christopher Street Financial, a wealth management firm catering to the gay and lesbian community, was just one of those people. Hatch previously served as a vice president at JPMorgan and as a managing director at Bear Stearns, working in equities and high yield bonds for institutional investors. "Back when I first started, women couldn't even wear a professional pant suit into the office," she jokes. Now, as an entrepreneur, she says she's outside of the ball and chain of Corporate America and the "master of her own fate". And, similar to other professionals, the money earned on the street allowed her to jump ship and start her own firm.
Retention is a serious money issue for banks and investment firms, as they devote considerable resources to recruit, hire, and train new staff. Says Irvin, "There is a hazard to over-recruiting. The industry needs to focus more attention on retention. It's essential to work harder to retain the people we put considerable effort into bringing on board and up to speed."
Of course, the return on investment (ROI) in diversity programs remains difficult to assess, given the information is generally kept private by the industry. Anecdotally, it seems times have changed somewhat, especially for women on the street. Nina Godiwalla, author of the book Suits: A Woman on Wall Street, agrees, but adds that the grueling environment isn't always welcoming for any professional. In 2009, she started MindWorks, an executive training firm focused on stress management. The Wharton MBA grad and former Morgan Stanley analyst notes, "Not that long ago-in the late 1990s and a bit later-clients were still requesting to not work with women. Things have gotten much, much better."