The new technique for assessing covert discrimination in banking
Investment banks have got a gender issue. The industry's gender pay gap is well-documented, as is its shortage of women beyond the mid-ranks, as are the small acts of subtle discrimination that can make it hard to get ahead.
"It's a systematic and cultural problem," claims one senior female banker at a U.S. house. And it's not limited to women: demographic figures for staff at different levels in Goldman Sachs suggest it's hard to progress if you're hispanic or black too. Goldman certainly isn't alone in this.
None of this is new, however. Banks have been trying to tackle discrimination for decades, with negligible results. Now, though, a new company is proposing a solution - based on the presumption that existing measures of discrimination are far too imprecise.
"Every bank has identified diversity and inclusion as an opportunity," says Laura McGee, founder and CEO of Diversio. "What they are missing is the data and analysis needed to identify their particular problems and to solve for them."
This is what McGee does. Canada-based Diversio already works with 10 Canadian and international banks, including HSBC, Royal Bank of Canada, Toronto Dominion, Bank of Montreal and the Canadian Pension Plan Investment Board, plus nearly 200 companies in other sectors.
"We look at inclusion across six main metrics," says McGee. "An inclusive culture, freedom from harrassment, access to mentors and sponsors, bias and feedback, flexible work options, recruitment and hiring."
Diversio's method is simple: employees in different demographic categories are asked to rate their company's performance on each metric and the outliers are analyzed to indicate where the problems are. "We also give respondents free text opportunities so that people can say they were asked gender-related questions during interviews or were accused of being aggresive when they asked for a promotion," says McGee. "And then we use natural language processing (NLP) to boil up the themes and draw out the common narratives."
In this way, McGee says she can identify "acute areas" which simple measures of diversity miss, like a tendency to discriminate specifically against women with young children.
When the data is collected and employee feedback analyzed, most banks and other clients find they're trying to solve the wrong problems, says McGee. "Since #MeToo, a lot of emphasis has gone into preventing sexual harrassment, but we usually find that there isn't a problem with this. The real issue is that men and mentoring and helping women.
"We usually find that white heterosexual men are quite happy from an advancement and mentorship perspective, that women are less satisified, that people of color are less satisfied again and that people with disabilities are at the bottom of the pile. Most CEOs have no idea their people feel so excluded."
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