This imperative shift is starting to be embraced by the financial industry, with Moody’s recently describing Lloyds Banking Group’s programme to promote more black employees to senior roles as “credit positive”. In light of the potentially wide-ranging benefits of embedding creative diversity and inclusion initiatives into long term business plans, and increased pressure from investors, clients and the general public, many companies may be looking afresh at utilising the “positive action” provisions contained within the Equality Act 2010 (“EqA”).

In this article, Pooja Dasgupta, Associate in partnership and employment law at CM Murray, discusses what positive action is and how employers in the financial sector might use it to further their reinvigorated diversity aims.

Positive discrimination vs positive action

Positive action should not be confused with positive discrimination. Under the EqA, positive discrimination means treating a person more favourably than another because of a protected characteristic (race being one such characteristic). This is unlawful unless one of the statutory occupational requirements applies. In contrast, positive action (which is entirely voluntary, save in certain exceptions), if adopted correctly, may lawfully achieve greater participation of unrepresented groups who share a protected characteristic, generating a wider talent pool; leading to a broader range of ideas; and, ultimately, ensuring better and fairer decision making at senior level.

Positive action – key aspects

The EqA allows employers to take two main types of positive action, as follows:

1. General positive action – where employers reasonably think that people with a particular protected characteristic are i) disadvantaged; ii) have different needs; or iii) are disproportionately represented, employers can take proportionate measures to enable or encourage those people to overcome that disadvantage, to meet their needs or to enable or encourage their increased participation. An example of positive action is to have aspirational objectives and targets. These are now being more widely used, including by EY, who have a target of 40% female Partners and 20% BAME Partners by 2025.
2. Positive action in recruitment or promotion decisions – this provision allows employers to treat an applicant or employee who has a protected characteristic more favourably in connection with recruitment or promotion than someone who is “as qualified” for the role but who does not have the relevant protected characteristic. The application of this provision can be difficult in practice, as evidenced by a recent Employment Tribunal case, where the employer mistakenly deemed 127 candidates who had passed an assessment to be of “equal merit” when, in fact, data showed that the candidates who had passed ranged from weak to strong passes. Employers should adopt objective assessment criteria, considering overall ability, competence and professional experience, relevant formal or academic qualifications, and any other qualities required for the specific job.

Under the EqA, positive discrimination means treating a person more favourably than another because of a protected characteristic (race being one such characteristic).

Employers should take a case by case approach and avoid blanket policies of appointing, promoting or otherwise treating more favourably individuals with a protected characteristic. Action must be proportionate and based on thorough analysis of reliable information that indicates the scale of underrepresentation (of which there will be plenty, in the current climate); what other actions have been taken to address it; and any progress that has been made. Employers should prepare detailed action plans with specific outcomes and regular review periods to monitor the impact and proportionality of any ongoing positive action on the protected group and other groups.

Practical tips

1. Think creatively about how to attract a diverse pool of talent – this may include encouraging those from particular groups to apply for roles, whether by implementing monitoring programmes; delivering training to minority students; or providing bursaries. With this aim in mind, the Premier League, English Football League and Professional Footballers’ Association have recently announced a new initiative, which will give up to six BAME coaches a 23-month work placement in an effort to increase the number of BAME players moving into full-time coaching roles. Employers should also take steps to provide mentoring programmes and networking opportunities to existing staff from disadvantaged groups; for example, AXA’s “WoMen@AXA” initiative, designed to foster the professional development of women.
2. Remove any existing barriers in your recruitment process – employers should take the time to review the diversity of their internal or external recruitment teams and implement systems that reduce the opportunity for bias.
3. Build greater awareness of racial inequality and the benefits of maintaining an inclusive workplace culture – employers should regularly deliver equality, diversity and inclusion training. Unconscious bias training will also be particularly important for those in decision making roles. Where possible, employers might consider developing an internal knowledge/resource sharing platform, so that staff can informally share information regarding diversity issues, encouraging an open discussion amongst individuals from different backgrounds. Employers should also consider how best to use their social media platforms to encourage meaningful discussion about these issues, rather than simply issuing “empty” PR statements for the sake of good publicity.
4. Consider implementing voluntary ethnicity pay gap reporting – pending the UK government’s outcome being published in respect of its consultation on ethnicity pay reporting, companies should consider implementing voluntary ethnicity pay gap reporting; in the financial sector, this type of data will be increasingly important, with regard to investors analysing the progress made by companies in respect of inclusion.
5. Finally, but most importantly, do not be afraid to take positive action – it is no longer acceptable to “go with the flow” and hope for the best in respect of diversity. The fear of exposure to potential legal claims, if you get positive action wrong, should no longer outweigh the need to drive lasting, meaningful change. Taking calculated risks, based on reliable and up to date information, will undoubtedly make organisations more attractive to applicants, investors and clients and, internally, immeasurably reshape workplace culture.

As the Coronavirus (COVID-19) pandemic continues to spread there has been a worrying rise in harassment, bullying, and discrimination in the workplace. Initially, this was seen to be race-related - targeting people of Asian origin - but has since spread to include people who expressed symptoms of the virus. Now as large swathes of the global workforce move to a working from home model, employers are faced with a new challenge - that the vector for workplace discrimination will shift in parallel with the main mode of communication. Neta Meidav, co-founder & CEO of Vault Platform, explores this phenomenon below.

Tasked not only with rapidly implementing a company-wide working from home strategy to keep businesses that are still operational up and running, many HR functions are also operationally responsible for mass layoffs all while building a crisis information and communication plan out. Bluntly, HR teams are maxed out and will struggle to field a rising number of queries about the new workplace etiquette.

Law firm Lewis Silkin LLP estimates that around 59% of large multinational enterprises have already put into place a plan to respond to pandemic diseases such as Coronavirus. Typical measures include social distancing and remote working arrangements. The majority (88%) of are managing self-isolation by asking employees to work from home.

It’s difficult to actually get a handle on the number of people whose jobs allow them to work fully remotely, especially with such an unprecedented situation. But cloud security services firm Netskope, which routes corporate traffic for hundreds of thousands of office workers said it estimates that the number of American knowledge workers (white collar desk workers) logging in from home hit a high of 58% on March 19. This is up from an average of 27% over the last six months.

While there may be some anecdotal evidence that the untested shift to an emergency working form model is in fact working, it is early days and there is plenty of research that points to warnings we should all be heeding.

Bluntly, HR teams are maxed out and will struggle to field a rising number of queries about the new workplace etiquette.

A 2017 study by David Maxfield and Joseph Grenny for leadership training consultancy VitalSmarts found that just over half of people who work mostly remotely feel they don’t get treated equally by their colleagues. Now the obvious retort is that ‘we’re all remote workers now,’ so the playing field is levelled. But research suggests the problem is more with the medium than whether workers fall into the ‘in office’ or ‘WFH’ camps.

Some 30% of UK respondents to a survey by Totaljobs in 2018 said they had been victims of workplace discrimination on official corporate messaging platforms, such as Slack, Microsoft Teams, or Google Chat. In the US, a 2019 survey by Monster.com revealed that 39% of respondents had received aggressive messages from colleagues on similar tools.

Cyber-bullying has been well documented for some time and remains as persistent in the corporate workplace as it does in schools and colleges. A recent high-profile case focuses on the departure of the CEO of leading consumer brand Away after an exposé of bullying culture over Slack.

The revelations of Away are an anomaly - most incidents go unreported. The same studies show that 30% of workers in the UK (according to Totaljobs) and 34% in the US (according to Monster.com) who do experience cyberbullying suffer in silence because they are not confident they will be supported by their employer. Lloyds of London was exposed in December last year after their complaint hotlines were proved to be inoperative for 16 months due to unpaid phone bills, and in 2018 the Financial Conduct Authority put senior managers on notice that their futures in the City were at risk if they did not take diversity seriously, while companies faced fines after a 220% increase in interpersonal whistleblowing complaints over the previous 12 months. According to Totaljobs, around 8% find it easier to leave their jobs than to complain and request an investigation into the situation.

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Digital workers are disincentivised from reporting workplace misconduct in the same way as employees that spend all their time in the physical presence of their colleagues. Firstly, the available channels for reporting misconduct are intimidating; and secondly, they don’t feel confident their employer will act on the report.

But the fact remains that employers are legally obliged to protect their workers and that responsibility doesn’t change because they are now out of sight. While ethically, employers should take more care during these uncertain times.

• Remind your employees of your organisation’s discrimination and harassment policies and ensure that these are adapted for a remote-first culture (i.e. how they apply to discrimination across messaging apps) and are easily available.
• Encourage a speak up culture: stigmatising issues (such as with race-related discrimination due to COVID-19) can be challenging for employees to report. Without effective reporting tools in place, many will suffer in silence.
• Take reasonable steps to prevent discrimination and harassment : Typically, employers will only avoid liability in the event of a discrimination case if they can show they have taken ‘all reasonable steps’ to protect employees, such as implementing an effective and secure solution for reporting sensitive issues that take place in person or digitally.

The research found that 1 in 10 would be “extremely likely” to switch.

28% would be unlikely to switch if bad behaviour was found at their bank, while 24% would be neither likely nor unlikely to switch.

Although half of those surveyed would consider switching because of non-financial misconduct, only 4% of respondents have actually done so.

For customers who would consider switching because of non-financial misconduct, the main barrier to switching is the perceived hassle of doing so. 37% of respondents cite “excessive hassle” as the reason they haven’t already switched. 23% of consumers view all banks as equally bad, and 20% don’t know enough about alternative options to switch.

The main barriers to switching are:

• 37%: "excessive hassle”
• 23%: “all banks are equally bad”
• 20%: “don’t know about the other options”
• 10%: “loyalty to bank”
• 4%: “the products of ethical providers aren’t good enough”

Racial discrimination against employees is seen as the most intolerable example of non-financial misconduct, with 58% saying they would be likely to switch banks if it was going on, and 21% saying they would be “extremely likely”.

When it comes to the gender pay gap, just over one-third (38%) would consider switching bank because of a significant gender pay gap. 9% of women and 5% of men would be “extremely likely” to switch banks because of this. Respondents were also asked if they believed banking was more likely to have a culture of gender inequality than other industries. 36% said that they believed this to be true.

The factors that would make customers most likely to switch banks:

• 58%: discrimination based on race
• 54%: discrimination based on sexuality
• 52%: poor environmental practices
• 52%: sexual harassment
• 38%: significant gender pay gap

Mike Fotis, founder of Smart Money People, said: “The financial services industry has come under increased scrutiny in recent years for its track record on non-financial misconduct, with the FCA signalling that how firms handle non-financial misconduct is potentially relevant to their assessment of firms. Our survey shows that these issues matter to around half of banking customers.

“We were particularly interested by the barriers to switching. Despite the high profile promotion of the Current Account Switch Service, the hassle factor remains the key reason why customers don’t switch. And while new banks continue to emerge, 20% cite a lack of knowledge about alternative options as the reason why they wouldn’t switch.”

(Source: Smart Money People)

It’s been exactly a year since Harvey Weinstein was first accused of sexual harassment and assault. Since then, more than 50 women have made allegations against the Hollywood mogul, whilst the #MeToo movement has rapidly spread around the world with a shocking number of powerful men across a number of industries being pushed out of jobs and publicly accused of sexual misconduct. But despite the widespread popularity of the movement, it seems like the finance industry has been, to an extent, immune to claims of sexual harassment. Of course there have been cases that have been reported in the past twelve months, with Merrill Lynch employee, Jean McCrave Baxter, suing the firm over sexual harassment and discrimination being one of the most recent examples. Yet, many women in finance who have been harassed are reluctant to coming forward to talk about the abuse and most of the very few individuals who have spoken up openly about it have chosen to remain anonymous.

What’s hiding behind the silence?

We all must remember Sallie Krawcheck’s story about a man she met at a conference organised by Sanford C. Bernstein & Co., where she was Research Director, who invited her to his hotel whilst “sticking out his tongue and wiggling it at [her]”. After moving to Citigroup in 2002, Mrs. Krawcheck found out that her harasser was about to get a job at the bank and told its CEO about the experience she’s had with him. After the Chief Executive’s suggestion that maybe this was all a misunderstanding, she threatened to quit, which resulted in Citigroup agreeing not to hire him. Krawcheck said that she’s decided not to name her harasser only because she got her revenge. “He wasn't in a position of power, and I got him back later", she says.

The first female trader to be invited into the partnership of Goldman Sachs, Jacki Zehner, on the other hand is withholding the name of her colleague who pulled her out of a taxi as he wanted to take her into his home after drinks because she’s too afraid. She also adds that she would never forgive herself for not reporting him.

Earlier this year, WealthManagement.com reported on the case of a personal banker who was working for a major firm in California and was responsible for 20% of the company’s clients. One of them, a Chief Financial Officer, used to ‘aggressively flirt with her’. “He would say: ‘When are you going to take me to the opera? When are you going to take me to a sporting event?’; I would say: ‘I will take you any time you want to go. You would take a date, and I would bring my husband.’ And he says: ‘No, I want this to be just you.’” On another occasion, she was sat at her desk when another client showed up. “This guy happened to walk in, and in the midst of me having a conversation with these other people, he turned my chair around, kissed me, and laughed”, she explains. “I got up, and I went into the manager. He responded: ‘I expect you do whatever it takes to keep that client.’ So I quit. I walked out the door. It was pretty traumatic because I worked hard to get to that position.”

In January 2018, Bloomberg interviewed 20 women who used to or still work on Wall Street and yet again, asked not to be identified. And although #MeToo has triggered some changes, these 20 women say that throughout their career, they have been ‘grabbed, kissed out of the blue, humiliated, and propositioned by colleagues and bosses but have stayed quiet because of cultural and financial forces that are particularly strong in banking’. These women worry that they have a lot to lose by reporting it and no certainty about what they could gain - all on top of legal agreements that ‘muzzle’ them.

Some may argue that the finance industry has already had its #MeToo moment in the mid-90s when a group of female employees from California to New York sued the giant brokerage firm Smith Barney Inc. for alleged sexual harassment, hostile work environment and job discrimination. The lawsuit prompted a number of other companies to put harassment procedures and mechanisms in place. And although we’ve reached a point where all major financial (and not only) institutions have policies for reporting harassment in place, a WealthManagement.com survey showed that 66% of the women who have been harassed or  witnessed harassment did not use the protocols in place to report the incident. The list of reasons included ‘fear of retaliation and ostracism within the office, the fact that the offender was the victim’s manager or a belief that the complaint would not be taken seriously’. One respondent remembers the one time she informally addressed an instance of sexual harassment that she’s been subject to and the response she got from her management - laughter and an explanation that this was ‘the nature of the beast’.

A lot can be said about the culture within finance, or ‘the nature of the beast’. On a global scale, the financial sector suggests a culture where it’s hard for women to thrive. Long hours, the travel and the pyramid-like structure that includes a lot of junior women, but disproportionately fewer and fewer of them as you get toward the top. On top of this, financial firms and institutions are built on relationships, they value discretion, demand sacrifice and fixate on reputation. The culture in their firms could be so intimidating that some of the women that Bloomberg interviewed for example are scared that bringing a sexual harassment claim to light could permanently alienate bosses, colleagues, and even rivals. Many in finance tend to attribute it to an industry norm, believing that this is the way things get done around here and victims need to develop a thick skin and get on with their life.

Alan Moore, Co-founder of XY Planning Network, a support network for advisers looking to serve next generation clients says: “There is a generation of men that simply don’t recognise harassment when they do it or when they see it. Women have been told time and time again, either verbally or through inaction, that harassment isn’t a big deal. You should just put on thicker skin and get over it. And so we haven’t given women a way to actually end the harassment without basically having to quit their job and move on.”

The unique nature of the culture makes removing oneself from the situation and moving to another company seem like the easier option – you won’t have to talk about it, you won’t have to face judgement and you won’t have to feel embarrassed. Even Sallie Krawcheck and Jacki Zehner, some of the very few women in finance who have had the bravery (and maybe the strong reputation) to open up about the traumatic experiences they have been victims to, have chosen not to ‘name and shame’ their harassers.

“You can have protocols in place that look great in theory, but if nobody is ever actually disciplined for having harassed somebody, then those protocols start to look like your complaint goes into a black hole and you never know what has happened other than you start to fear that you’ll be retaliated against”, says Eric Bachman, a Principal with Zuckerman Law and the Chair of their discrimination and retaliation practices.

“It’s really necessary for [firms] to be out in front of this and treat this like a real business problem that they need to be figuring out the solution to and giving it the appropriate prioritisation within the organisation”, Bachman continues. “And until that happens, you’re going to keep seeing sexual harassment problems in this industry.”

Arguing that every single woman working in finance has been harassed without addressing it was never my intention. I’m confident that there are countless women working in the financial services sector, who have reported the incident or whose gender has never sparked any problems – some even use it to their advantage. However, although the situation is improving, I believe the industry still has a long way to go – more women should take inspiration from women’s voices in other industries and more management teams should persuade female employees that making a complaint is not going to adversely impact their careers.

Sources:

https://money.cnn.com/2017/11/01/pf/naming-sexual-harassers/index.html

http://www.jackizehner.com/2017/10/19/metoo/

https://www.wealthmanagement.com/industry/nature-beast

https://www.bloomberg.com/news/articles/2018-01-11/why-wall-street-hasn-t-had-its-metoo-moment-yet

https://www.washingtonpost.com/gdpr-consent/?destination=%2farchive%2fbusiness%2f1996%2f11%2f06%2f26-women-sue-smith-barney-allege-bias%2f595f6d40-b69c-45cf-a1f8-a56c3167bcf8%2f%3f&utm_term=.9bf24b50233e

https://www.vanityfair.com/news/2018/02/inside-wall-street-complex-shameful-and-often-confidential-battle-with-metoo

Sopra Banking Software uncover why it is that men still dominate senior positions in Tech and why men are out-earning women, even in equal positions.

The UK gender pay gap won’t close until 2069 unless measures are taken to combat it now. That’s another 53 years that women will continue to pay a higher price for being female.

A study by McKinsey Global Institute found that in an ideal scenario, where female roles are identical to those of men, “as much as $28 trillion, or 26%, could be added to the global annual GDP by 2025.”

Gender Disparity in the Workplace

Laura Parsons, Senior Manager at Deloitte, shares these findings: Last year, girls outperformed boys in every science, technology, engineering and mathematics subject, and even though innumerable top-paid jobs demand capabilities in STEM subjects - 70% of women in the UK with a STEM qualification aren’t working in compatible fields.

What is it that pushes women out of these industries, and how do we secure them from entry level to senior positions, and offer support in pursuit of entrepreneurial ventures?

Unsurprisingly, McKinsey Global Institute found that 38% of women in the technology field feel that gender discrimination staggers growth and chances for progressing their career in the future. 60% of these women attribute not wanting to be a top executive to excessive stress and pressure. Of all the fields researched, these figures were among the highest.

Melissa North, head of human resources at Sopra Banking, shares: “Businesses are not taking adequate measures to ensure women feel they have the reassurance to pursue a work-life balance, including starting a family - and therefore women don’t succeed long term. Feeling like they must compromise having a family to have a career is one of the leading reasons women don’t stick around to get moved into leadership roles.”

Pip Wilson, entrepreneur, investor, and co-founder of amicableapps, adds: “Ultimately, the thing that will completely level the playing field is an even split between men and women in childcare.”

As a parent, Pip Wilson shared the domestic workload with her husband to be able to focus on the success of her business ventures. This often meant her husband would stay home while she worked, and vice versa.

Something as simple as employers providing or supporting childcare initiatives for employees could prove to be one of the most important incentives for females in the workplace.

Tech: A Growing Sector for Women

Entrepreneurs and business women, such as Melinda Gates, wife of businessman and philanthropist Bill, see the value of using tech to their advantage: “To me, the tech industry is one of the best places to work right now. If I was working again, I would work in biological science or tech or a combination of both. Every company needs technology, and yet we’re graduating fewer women technologists. That is not good for society. We have to change it”.

Women should view this as the best time to enter the tech market: more people are graduating from tertiary levels than ever before, and women are outperforming men in STEM subjects.

As businesses become aware of what this lack of gender representation means for their overall success, the more women will become empowered to hold positions they didn’t before.

It’s tough to identify whether the gender bias is due to subconscious views during the recruitment process, or from the ongoing cycle that sees women receiving lower pay and fewer promotions, thus resulting in women keeping themselves placed below men through these continuous actions. The social constructs for gender roles will take time to be broken down.

There is good news for women, however. Studies show that those who ask for the same salary as men, in the same role, tend to get offers in line with what they are asking.

What Should the Workplace Look Like?

Take gaming for example: Women make up only 22% of game developers, yet represent 50% of the people who play video games.

As a business woman and consumer, Pip Wilson believes that people inside your company need to reflect the people you’re trying to serve.

Businesses need to recognise the responsibility they have to women and gender equality in the workplace, but also the possible benefits that come with hiring from a larger pool of talent, that includes women:

- Increased labour supply
- Higher incomes
- Productivity gains
- Reduced poverty in developing countries
- A unique angle and approach to problems, due to a different atmosphere cultivated by women

Once a culture of diversity has been adopted and is naturally functioning, there will be a good discrimination in place – one that filters and keeps only the best for the job, regardless of gender.

How Companies Can Address the Gender Disparity:

• Provide practical career insights to educators and policymakers
• Create more support for women returning to work
• Share detailed information on the gender pay gap with employees and the public

Melissa North, Head of HR at Sopra Banking Software adds that networking is important, “Having a belief and not doubting yourself is important as a woman climbing the business ladder as well as making yourself visible to other women in the industry and talking about your struggles. Not chasing your dreams of going into a new field because of commitments attached to gender shouldn’t hold you back.”

Tips for Women in Tech:

Talk to others: Fight the temptation to ‘do it yourself’, and get help and advice from wherever you can

Find mentors and those who have been in your shoes before: male or female

Use tech to your advantage: A study done by Accenture details how mobile tech has made it easier than ever to balance work and home life. Exploit the connectedness, making use of mobile apps and cloud services. A successful business no longer requires a 9-to-5 in an office

Have confidence and trusting your abilities: Many women tend to believe they fall short in the skills needed to thrive in business. A lack of confidence means avoiding intimidating tasks or new disciplines, more so than some men, who are more likely to try

At a time when the tech industry and business overall is dominated by males, women should take this opportunity to get a head start in whatever they want to achieve, using the various tools available in a changing world. Businesses should recognise this as an opportunity to empower women, and to attract the best new talent, regardless of gender – as it’s crucial to growth.

(Source: Sopra Banking)