The new recruitment crisis as banks try doubling their strats teams
There is a U.S. investment bank in London's Canary Wharf (which will remain unnamed) that wants increase the size of its strats team by nearly 100%. Right now, it has around 60 strats in London. In a few years' time it wants 120. It's already focused on hiring them. And it's already come up against a major problem: almost all the applicants for its strats jobs are men.
Diversity is a big deal in banking. At Goldman Sachs, new CEO David Solomon has promised to equalize the proportions of men and women on Goldman's analyst programs. Someday soon, Solomon has promised that entry-level classes will be 50% men and 50% women. However, in any strats team - not just at Goldman - this looks like seriously wishful thinking.
"90% of our strats are male," says the COO of the strats team at another U.S. bank, speaking off the record. "We're trying to change this, but it's going to take a while."
It's a sentiment echoed at today's Women in Quantitative Finance conference organised by quant-focused WBS Training in London. The bottom line is that a lot of work needs to be done if women are to be equally represented in the fastest growing jobs in finance.
'Strats jobs' were born at Goldman Sachs, which has employed 'strategists' to apply technology and quantitative techniques to problems across its business for decades. Goldman is growing its strats team - in February, outgoing CEO Lloyd Blankfein said strats already accounted for 25% of the headcount in the firm's fixed income currencies and commodities division and 27% of external hires into the division were strats last year. Other banks are following: Credit Suisse, Deutsche Bank, J.P. Morgan, and Morgan Stanley all now have strats of their own. "We're basically trying to do what Goldman is," says the COO.
For anyone coming into the industry now, the opportunities in strats teams are therefore enormous. This is effectively a "massive new business area," said a senior female systematic trading strat at one major bank. "We think of ourselves as leading the business," she added. "There's a new mentality where technology is leading the world." In the past week, she said her strats team has been able to use quantitative models to explain the effects of trade restrictions and rate rises to clients: "We can [user our models to] communicate market drivers to clients in the most simple way."
This might be expected to elicit excitement among candidates, and it does - if they're male. "When we advertise quant roles only one or two suitable women apply – the rest are all men," says a senior recruiter at another bank. Even after working hard to add women to shortlists, she said it's still impossible to female applicants above 25%. "The candidates just aren't there."
Nor is this going to change quickly. If banks want to hire more female strats, they will need to ensure that more young women study quantitative courses at university and also that young women apply to these courses in the first place. "We need to encourage young girls aged 11 into technology," said one attendee at today's conference. That's a pipeline that will take a long time to come through.
For the moment, then, female strats have an advantage, particularly as recruiters try to find women for shortlists. The perceived positive bias can be a double-edged sword: "No one wants to be promoted just because she's a woman," said one of today's panelists. But, "I’ve been in the industry now for 20 years and the number of men who are promoted just because they go to the pub is crazy," said another. Female quants of all kinds need better recognition, she added: "If you get a woman who is promoted, the level of scrutiny is unbelievable – much more than men."
More generally, the female quants at today's event, said young women thinking of future careers need to be given societal permission to make money. "If girls say they're choosing a career because of money, they're looked down upon whereas it's totally acceptable for a boy to say he wants to earn a sh*tload of cash," said one. "Society puts pressure on women to choose compassionate professions."
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