Q3 Financial services networking breakfast – key takeaways

Author Fay Phillips-Jones
September 22, 2023


  1. Sexism in the City what will the latest government inquiry reveal?

Following momentum post the #metoo movement this is certainly a hot topic (and if it’s not – it should be) amongst HR and business leaders, especially given the recent string of highly publicised sexual harassment cases among some well-known organisations which have resulted in a number of senior leaders stepping down.

Strong consensus around the room was that the larger global corporate organisations are more prepared and more readily supported in terms of their governance, policies, culture change and ways of working.

Working in a smaller boutique comes with its challenges as many leaders can’t see or don’t want to believe there are issues around sexism within their firms. This impacts talent and attraction and may see SMEs being left behind. HR is tackling issues head-on and are looking for more comprehensive and effective approaches to support employees.

Often international firms can appear gender and ethnically diverse on paper due to international and diverse workforces. But when individual offices or countries are reviewed in isolation, they are still a long way off seeing equity in this space.

It’s simply not enough to have a gender-diverse leadership team (which is still a long way off even now); it goes beyond that and demands authenticity. Tackling ‘micro level’ sexism is one area that senior leaders can be successfully brought into when presented the right way. ‘Seemingly’ small factors from leadership such as banter about sports teams, to complimenting someone on their hair or dress through to who ‘makes the tea’ and ‘serves the snacks’ – may seem ‘minor’ in isolation, but build up and can result in senior female talent walking out of the door. Not to mention being overlooked for promotional opportunities, showcasing achievements, internal visibility and feeling included.   

Aside from being ‘the right thing to do’, putting diversity at the forefront is becoming more heavily demanded by clients and investors alike – something that makes business leaders sit up and listen.

Smaller firms feel it more as employees will likely be less inclined to raise concerns to managers that largely influence pay or promotion and they are more likely to know most of the firm members versus a larger global organisation.

Practical support includes:

  • Provide coaching opportunities for less experienced senior female leaders and future leaders
  • ‘Safe places’; provide platforms to raise concerns, from anonymous websites through to having clearly defined routes to HR or managers, and/or creating a ‘trusted’ group of senior leaders/board members that act as a sounding board and ‘Conduct Committee’, for raised concerns and so that they see first-hand what is happening in the firm and decide appropriate courses of action
  • Being transparent around how the firm have tackled sexism in the past – how pay/reward has been impacted
  • Being held accountable for diversity, equity and inclusion (DEI) at Board level, embedding it into governance and compensation
  • Clear and easy to access/use grievance procedures for raising more formal concerns
  • Continue to provide senior leadership with examples of micro-aggressions going on in the firm. On the whole, they do care and will listen; it is about how we educate and give leaders more of a ‘reality check’ 
  • Offering an equal platform for promotions and equal opportunities to gain the right exposure to progress careers 
  • Emphasis and care into onboarding of new employees
  • Thoroughly review talent programmes from apprenticeships and graduates through to experienced hires
  • Ensure work experience programmes are effective and fair and not seen as a ‘free for all’ pass for family and friends

At the junior level, female talent will decide whether ‘it is worth the battle’ to stay on and get promoted where they are or elect to jump ship.

Financial services as a whole has struggled to hire and attract diverse talent because other industries such as FinTech have had more transparent and consistent equality strategies that have proven successful in promoting a diverse workforce.

  • How are SMEs preparing for the EU Pay Transparency Directive?

This is an area that is playing on HR leader’s minds in preparation of the 2026 deadline, but on the whole is on the backburner until closer to the time it is required. 

Places such as New York have already embraced more transparency in compensation and hiring processes.

  • AI in the HR industry – how are SMEs leveraging these tools?

There is still a lot to learn in this space. HR are embracing report writing, presentation slides, employee handbooks, HR policies and procedures – which have all proved hugely successful and on the whole pretty accurate and fit for purpose.

Some firms have elected to use internal versions of ChatGPT to mitigate the risk of data and confidentiality sharing. 

Confidentiality sharing in ChatGPT is a huge concern for businesses as well as further education and training, and awareness raising is needed in this space to avoid major issues.

Larger firms are using AI to run their compensation rounds this year alongside their usual manual processes. It will be exciting to see how these trials go as we move forward in embracing sophisticated technology to enhance and enable HR processes and business impact.

  • Hybrid working: What is the market view on this?

This is an ongoing debate amongst senior leaders across the board. 2023 has certainly seen a rise in the number of days employees are expected to be in the office. From extremes of checking card entries to providing guidelines this is a topic regularly revisited and we expect will continue to do so. Every firm has a different view. 

Some ideas and insights shared by the group:

  • Anchor days for team working seem to be quite common
  • Set days for the whole firm are harder as most have downsized office space
  • Incentives – food, relaxation, state-of the art offices, travel payments, learning events, access to sport equipment and fitness opportunities – can works in pockets
  • Working patterns that suit individual teams (but it was noted this can lead to discrepancies)
  • Raising the number of days employees need to be present in the office has had an impact on talent and attraction
  • Lead by example: leadership teams need to be dedicated to what they enforce
  • Be upfront and transparent in interview processes and explain why there is a certain expectation for office working and what it means for the firm (culture carriers/building relationships/learning opportunities etc.)
  • Quiet monitoring and quiet words
  • Employees have leveraged the work from abroad policy and tagged working days on to holidays
  • Above all – be clear on the firm’s position

Junior staff need more 1:1 support and on-the-desk learning opportunities; some have not worked in offices before and need managers to be present for ad hoc questions and observations. They will look elsewhere if they are not getting it from their managers.

Middle managers are still proving resistant and are indeed now seeking individual contributor roles to combat the case for office working requirements. After tax, additional pressure and stress on this group versus salaries and incentives for managing teams or onward promotion opportunities, managerial roles are not being deemed attractive and do not outweigh the personal benefits of flexible working.

The market is very anxious about roles specifying more than three days of working in the office and top talent often refuse to review roles despite pay, location, industry and brand being aligned. Suspicion easily sets in as job seekers foresee a five-day rule creeping in; this has seen an upward trend in 2023 across parts of the US, Europe and UK. Unsurprisingly, this has impacted retention, turnover and attraction and has increased the trust-gap between employees and senior leaders.

Engagement scores continue to fall with hybrid working being cited as one of the drivers of this.

Hybrid working patterns are seen to be very country specific – not a ‘one-size-fits-all’ approach.

  • Compensation/pay benchmarking – what different approaches and partners are used across financial services?

For larger corporates the standard pay benchmarking tools such as McLagan and Willis Towers Watson were easily accessible. For the boutiques, these appear to be too costly and, on the whole, a lot harder to apply and less accurate.

Most leaders around the room really benefited from having strong agency relationships to compile comprehensive data and benchmarking, along with relevant market overviews. In most cases, there is not as much room or flexibility on a firm’s approach to total reward, so the importance of getting a clear view on the market for base is pretty essential.

Market patterns:

  • ‘Team lifts’ – many firms have experienced ‘team lifts’ this year where whole teams have been taken out of their firm
  • Counter offers– we are seeing a resurgence of this in 2023, where individuals have been bought back by up to 100-200% in some cases
  • Buy-back as a retention tool – most leaders around the room did not feel that buy-backs were an effective retention tool
  • Talent acquisition teams have been hit by slower market hiring trends this year following the surge in compensation post the pandemic and ‘war for talent’. This has resulted in companies having overly expensive recruitment teams and individual pay being above market rate. Firms are  now downsizing as a result

For further information on the market, your career or hiring within financial services please contact Fay or one of our specialist consultants by filling in the form below.

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