How State Street is bypassing recruiters to attain its top tier hiring targets

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In a hypersocial world of networking, where hiring managers are always on the lookout for top talent, the role of headhunters can fail miserably for big banks, Big Four accounting firms and other financial services companies with very specific staffing goals.

UBS, which has had a tumultuous relationship with recruiters, has scaled back its use of headhunters and is making more hires from within the bank or via direct referrals.

Ernst & Young has shifted its searches toward internal referrals, with employee recommendations comprising some 45% of non-entry-level placements at the firm, up from 28% in 2010, and strives to increase the percentage to half of total hires. Deloitte, which makes 49% of its experienced hires from referrals, up from 43% two years ago, offers prizes in addition to traditional cash incentives for employees who refer winning candidates.

U.S.-based global behemoth State Street has turned to a direct sourcing model to attain its target of having 27% of senior management roles held by women. Nearly half (43%) of the firm’s global workforce of more than 29,000 people are women. The firms says that by year end, one third of its “top table positions” in EMEA will be occupied by women.

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“In the past, external recruiting was based on the easiest and most timely solution available,” says Hazel Keating, Head of Human Resources EMEA at State Street. “However, State Street believes recruiters should be measured and challenged on diversity. If a shortlist is all male, the first question we ask is ‘why’?  And thanks to this we are seeing real change. In 2012, 50% of our executive hires were women.”

Moreover, Keating says that developing an internal pipeline also helps sustain growth in the long-term.

“We always aim for diverse candidate shortlists for all roles within the organization, including those that traditionally do not have a high percentage of female employees. We use a direct sourcing model, as opposed to passive and reactive and as such we will proactively target female candidates in these sectors in order to provide a balanced shortlist of candidates," Keating says. “This can be more challenging and time-consuming at times as the overall pool of female candidates is smaller. We also spend a lot of time exploring diversity and business network referrals, which helps increase the pool of potential candidates.”

As more women control more wealth, the need to expand financial services includes placing more women in traditionally male dominated roles.

In wealth management, there is a push to create programs catering to the growing number of wealthy women.

In 2005, about half of Americans with assets of more than $675,000 were women and they had a total fortune of $5.8 trillion, according to the Internal Revenue Service. A 2009 study in the Harvard Business Review said women controlled 51.3% of wealth in America, or about $14 trillion in personal wealth, and those assets are expected to balloon to $22 trillion by 2019. Globally, the numbers are much lower with the World Bank saying women control 1% of the world's wealth, while Boston Consulting Group says they have a grasp on 27%.

Additional data and studies vary, as CNBC notes in an article published Sunday, making it very difficult to calculate the real numbers especially as more women stand to inherit fortunes or build their own wealth.

Nonetheless, financial services firms lag miserably behind demographics when it comes to placing women in key investment roles that can serve the investment needs of their peers.

Attracting women is challenging in an industry that demands long hours and can infringe on the role of motherhood and family life. Global firms are increasingly realizing the need to provide a work environment that enables women to flourish and reach the C-suite.

There's no denying the industry culture can be unkind for women.

When former GE honcho Jack Welch, flanked by his wife and writing partner, Suzy Welch, set off a media storm with his comments at May 2012 forum on women in the workplace, Alison Quirk, an executive vice president at State Street publicly fired back.

"Of course women need to perform to advance," Quirk said at the time. "But we can all do more to help people understand their unconscious biases."

Keating says State Street is focused on nurturing a culture that accommodates everyone. “Both women and men are also attracted to our genuine commitment to flexible working too.  Approximately 70% of our workforce participate in some type of flexible work arrangement.”

Women must consider themselves the best overall candidate to win a job, not just the top female contender.

“Simply, women should distinguish themselves by showing that they are the best candidate for the job. Candidates should be prepared, attentive, succinct and to the point when answering questions,” says Keating. “Understanding the role requirements and using examples of their own experiences to demonstrate how they can best fit the challenges of the new role are also hugely important during the interview process. Demonstrable success in challenging personal and cultural working environments will also be valued.”

Follow the author on Twitter @natashagural