Diversity is a buzz word in the business world but when it comes down to it most of us just want to know how various policies will affect us. Most of the posts I do on Getting a Job in Investment Banking are about what you need to do in order to get a job in Investment Banking. However there are some things out of your control and things you can’t prepare for. One of the things you can’t prepare for is the general sector push towards a more diverse workplace.
Diversity can be quite a touchy topic for people on all sides of the debate for a variety of reasons. I’m not going to debate the merits of diversity policies but I will talk about how the different policies affect you. The fact is that more so than most industries Investment Banking is a very homogeneous work place and there is a push to make it a more inclusive work place.
So how will diversity hiring policies affect you as you try to get a job in Investment Banking?
Why do Investment Banks try and promote diversity and what sort of diversity are they looking for?
Traditionally ‘diversity’ hiring referred to the hiring of women into Investment Banks and although the definition has broadened in recent years to encompass the LGBT community, gender diversity is still the focus of most Investment Banking diversity policies.
Investment Banks have been a very male dominated boys club and the culture reflected this. What is the problem with this? Well if you don’t fit into that type of culture then you could never get ahead no matter how skilled you were at doing your job. And it’s not just women who were affected by this. If you didn’t like sport, partying or if you didn’t have the traditional privileged upbringing and contacts then you were at a serious disadvantage culturally.
This isn’t the stuff of the past either. When I started in Investment Banking most of the employees were male (there were 2 female bankers in the entire office) and they were almost exclusively from the elite schools and universities in my state.
Investment Banks have decided that this was not a sustainable culture in the 21st century and started a push for a more diverse workplace. The focus is still on gender diversity however this has been broadened to include the LGBT community and some Investment Banks are also trying to promote ethnic diversity in the workplace.
This is the reality of hiring policies these days so it is worth knowing and worth using if it can benefit you.
Does it actually make a difference in the hiring process?
YES it absolutely does make a difference. When I was in banking there was a real push at all levels of the Investment Bank to ensure that the intern and graduate pool was as diverse as possible. Each bank does this differently but generally they do it in a few ways:
- A hard quota: some banks have a hard quota for how many staff must come from ‘diverse’ backgrounds. Normally this relates to gender diversity but I have seen this applied reasonably liberally
- A soft target: other banks will not have a hard quota. They will require a certain number of people with diverse genders / orientations and backgrounds to get through to the interview stage and from there the best candidates get chosen
So how does it work when it actually comes to choosing interview candidates?
Diversity hiring should be thought of more as an ‘overlay’ than a selection tool in itself. What do I mean by this? Well if you have read my post on How Investment Banks Choose Candidates for Interviews you would know that different levels of the hierarchy look for different things when it comes to choosing interview candidates as well as the people to offer jobs to.
The junior bankers (of all backgrounds) don’t really care about the diversity angle. They are just looking for more staff who would make their life easier. As a result they just want the most technically competent candidates who can hit the ground running.
It is typically the senior bankers who apply the diversity overlay. They are presented with a list of candidates who meet the relevant requirements and they then consider how these candidates fit within the diversity policies they are looking to implement.
It is pretty rare for a more capable candidate to miss out for diversity reasons but if there are two candidates that are rated equally then the senior bankers are probably going to try and promote diversity. I know this really works some people up but I can tell you from experience it was pretty rare for me to get angry at someone who was hired over another for this reason (the connections hires ALWAYS bothered me more).
Look you can’t change this system or the fact that it exists so it is not worth getting angry about.
If diversity hiring is so important how come the statistics remain so skewed?
You would think given these policies that every year would see an equal number of males and females hired and that Investment Banks would be bastions of equality and diversity. Obviously they are not. The question is why not?
Well it simply comes down to the number of applications. When I was in Investment Banking only 10 – 20% of applications you received were from females. The rest were males. Not all these females were appropriate candidates (same with the males) but it meant that if by the time you got to the interview stage you had 30% female candidates you were doing pretty well.
If you add on top of this that every single investment bank was competing for the top female candidates and you can see why the end result looked the same to the outsiders.
Investment Banks do try and promote diversity but it is a little bit of chicken and egg. If there are no females in a workplace, a new female is less likely to want to join which means there are less females in a workplace.
So what should you do?
If you are a female, if you are from the LGBT community or even from an unusual ethnic background then use this to your advantage. You’re going to be in demand so don’t be afraid of applying to an Investment Bank. You’re still going to have to be a strong candidate but if you are then you’re going to be in strong demand.
If you’re part of the majority know that the numbers still are massively in your favor. Don’t get angry about what you can’t control and know that you still have the best chance of getting in because you’re so much more a part of the culture and you will fit much more naturally into the role.
Do you have any further questions about diversity hiring at Investment Banks? Post them in the comments section below and I’ll do my best to answer them. Alternatively shoot me an email or send me a message on Twitter (@BankersPitch) and I’ll get back to you.