People from privileged backgrounds are over-represented in front office roles within investment banking compared to the population as a whole. That is one of the main findings of a recently published report,
Socio-economic diversity in life sciences and investment banking, by the UK’s Social Mobility Commission – and it sparked much debate about whether investment banks are discriminating when it comes to recruiting talent.
Culture clash
An article at
Phys.org, a leading science, research and technology news service, notes from the report that the banks are failing to hire talented young people from non-privileged backgrounds because they recruit from a small group of universities, and hire those who already fit in with established banking culture.
The piece commented on the report’s finding “that candidates who fit the typical image of an investment banker are favoured by managers, some of whom also place importance on an individual's speech, dress, accent and behaviour, among other characteristics”.
The article says: “One finding showed that applicants who wear brown shoes with a suit will be at a significant disadvantage. This is because it is generally considered an unacceptable deviation from the standard 'dress code' as understood by the British banking establishment.”
The article
emphasises, however, that investment banks are now working harder to recruit talent from all backgrounds. “Banks are making good progress addressing these issues through outreach and work experience,” it acknowledges, “but more needs to be done to understand the barriers to entry. This needs to be accompanied by changes to the way that candidates are recruited and selected.”
Phys.org article
Sheen pool
But
The Guardian’s Paul Mason is not remotely convinced that investment banks are determined to become more inclusive, and is scathing in his criticism of what he sees as banks’ prejudiced approach to recruitment.
In his opinion piece – entitled 'How to blag a job in finance: buy some black shoes and talk like an aristocrat' – he writes: “There’s supposed to be a war for talent. If so, it became pretty clear last week why Britain’s investment banks are losing it. The recruitment filter works like this: you can only join the customer-facing part of an investment bank if you went to one of four public schools; got a first from one of five universities; and possess 'sheen'.”
200,000
The number of applications top global investment banks receive each year
According to Mason, no matter how good you are, if your tie is not right or your suit does not fit like a glove, you are destined to take your excellence somewhere else.
He finishes with the somewhat sarcastic observation: “Centuries of good practice show that capital can only be allocated efficiently when the participants in the deal played rugby with each other at the age of 12.”
The Guardian opinion
Foot in the door
The Social Mobility Commission study that sparked Mason's acidic article also found that young people who want to get ahead in investment banking need to have done work experience in the industry – a policy which, it found, favours those with already-established connections.
While steering clear of the debate over whether securing a work placement is all about 'who you know, not what you know', analysis by eFinancialCareers underlined the importance of spring internships and summer analyst programmes to undergraduates looking to get a foot in the door.
The financial services careers website analysed the profiles of 795 people who were hired this year in both London and New York by the likes of Credit Suisse, UBS and HSBC, to find out what it takes to get hired by an investment bank in 2016.
The website found: “Top investment banks receive upwards of 200,000 applications globally for their graduate programmes and hire only a tiny proportion of these every year – often those who have spent the previous summer as a summer analyst on the desk they were eventually hired by.”
eFinancialCareers piece
The CISI was asked for a quote on this topic by People Management Magazine. CISI CEO Simon Culhane, Chartered FCSI, said: “Class should not impact on whether or not an individual is hired or developed. Not just because social mobility is a good thing, but because diversification of talent is to be encouraged.”
Seen a blog, news story or discussion online that you think might interest CISI members? Email jules.gray@wardour.co.uk.