White Paper: Gender Diversity & International Recruitment
It is no bold move to predict that in the coming years a major theme for the financial services industry in Scotland will be one of globalisation – or at least further internationalisation. But perhaps the most important challenge will be more societal and cultural than economic and financial: increasing gender diversity.
In this white paper, we outline the disparity that exists globally between the number of women entering the financial services industry and those representing
it at a senior level.
We discuss the benefits increased female representation can bring to the Scottish financial sector and look at viable means of achieving this.
Specifically, we focus on the challenge of attracting women internationally. We examine the potential benefits and obstacles of such an approach and how an international recruitment strategy can be implemented and managed successfully. This white paper also discusses the many other advantages hiring overseas can bring.
Finally, we outline a six-step road map organisations can follow to help them compete for global talent - and in doing so build a diversified workforce suitable for the 21st century.
Diversity in the workplace is and will remain a key theme of this century. I hope this white paper helps your organisation move closer to achieving its objectives in this pivotal area.
Lack of gender diversity is not a problem specific to the Scottish financial sector. It is an issue the rest of the UK and much of the developed world is facing.
But perhaps it is more incumbent on advanced nations with the largest economies to lead by example and instigate the kind of transformative change which will encourage other countries to follow.
Before we examine the extent of the problem, let us summarise the benefits which greater gender diversity can bring to an organisation:
- Benefits of gender diversity
- Better corporate governance
- Different perspective and emotional intelligence level
- Workforce better reflecting a company’s client base
- Access to a broader recruitment pool
- Greater innovation and more creative problem solving
- More balanced attitude towards risk
- Modern and more reflective brand
Taken together, these benefits serve to boost shareholder value, with the level of female representation at board and senior level now an important consideration in any investment decision.
This ‘economic argument’ has been all but won in recent years. A McKinsey report published in 2012 found that companies with the highest number of women in top management had the best corporate financial performance.(2)
In 2015, research by the MSCI World Index highlighted companies among its index with strong female leadership generated a return on equity of 10.1% per
annum, compared with 7.4% for those without.(1)
The global challenge
Despite clear evidence of the commercial and cultural advantages of gender diversity, financial services companies across the globe are still failing to capitalise.
Data in 2013 from financial institutions across 20 global markets highlighted that despite women compromising 60% of all employees, only 25% progressed to middle management positions and only 19% progressed to senior level leadership roles.
Board and CEO representation is even more of a concern, with only 14% of women at board level and a meagre 2% serving as CEOs.(3)
Clearly there is a dramatic fall-off midway through the careers of many women. As a result, firms are losing valuable talent from their business.
The UK challenge
The findings of a review led by Lord Davies, ‘Improving the Gender Balance on British Boards’, was published in 2011 at a time when only 12.5% of FTSE 100 boards consisted of women.
In the report, Davies set out the aim that all FTSE 100 should strive for a minimum of 25% female representation by 2015.
An update in 2015 showed that 26.1% of FTSE 100 boards and 19.6% of FTSE 250 boards now carried female representation. There were now no all-male FTSE 100 boards and only 15 among FTSE companies.
But the headline figures do not tell the full story. The majority of board positions occupied by women are still non-executive roles, with only one in 10 women executive directors within FTSE 100 firms.(4)
At the time of writing, only five women hold the position of CEO among the UK’s blue chip companies.
The Scottish challenge
In many ways the Scottish challenge is unknown. There exists no readily available information on the gender composition of private companies operating in Scotland, whether this is at board, senior executive level or across entire workforces.
It is difficult therefore to set goals, monitor progress and instigate real change. In this area alone, there needs to be a collective effort on the part of all stakeholders in Scotland’s financial sector to collect, process and publish this data.
In March 2016 the UK Treasury and Virgin Money published the findings of a joint review entitled ‘Empowering Productivity: Harnessing the Talents of Women in Financial Services’.
A wide-ranging and ambitious study led by Virgin Money’s CEO Jayne-Anne Gadhia, it examines many of the cultural and organisational blockages which prevent most women from advancing beyond mid-level roles or force some to leave the industry entirely.
The report carries three overarching recommendations:
Firms should set their own internal targets and publicly report progress.
2. Executive accountability
An executive should be made responsible for improving gender diversity at all levels of the company.
Executive bonuses should be explicitly linked to achievement of internal targets.
The third recommendation, in particular, is a measure with real teeth. It implies that if the economic arguments for gender diversity have been won, progress or otherwise should be tied explicitly to remuneration.
In addition to measurement, reporting and accountability, the report argues that organisations need to work harder to identify and implement the main drivers which will increase female representation at senior levels.
The publication of these 10 actions, and the detail behind each, should be welcomed. And companies should work hard to implement them. The full force of these initiatives, however, will take time to be felt.
Retaining and developing female talent within the Scottish financial sector is clearly crucial to achieving sustainable gender diversity.
But one area which appears to have fallen outside of the report’s scope is recruitment. More specifically, the recruitment of women.
As a recruitment company specialising in the Scottish financial sector, we are often faced with the harsh reality of a dearth of senior female talent.
Put simply, when recruiting for a ‘Head of’ role, it is common to have only two or perhaps three suitable candidates. In many cases, these candidates are all male.
Faced with this dilemma, hiring organisations – and the recruiters which partner them – have two options. The first is to introduce quotas either part way through or at the end of the hiring process. The second is to increase the number of suitable candidates.
Levelling the playing field
With the pace of change frustratingly slow, several Scottish-based financial organisations have recently introduced initiatives into the recruitment process in an attempt to level the playing field. While employers should be commended for this, there are inherent dangers in focusing too much on ‘push’ rather than ‘pull’ strategies.
Push – or equality of outcome – measures, while stopping short of outright headcount quotas, commonly intervene at key stages in the recruitment process. For example, a certain number of female candidates may have to be included in the initial interview stage.
Although this approach is open to accusations of unfairness, arguably promoting the very discrimination it is trying to eliminate, it does bring some benefits:
- Increases the chances that a woman with transferrable skills can make a significant career change
- Broadens the horizons of the hiring manager, encouraging them to see beyond any prejudices they may have
- Addresses head-on – and in a very open and transparent manner - an issue that can be viewed with controversy
- Overall, this push rather than pull approach gives an applicant who wouldn’t otherwise have the opportunity, a chance to shine
Widening the playing field
If an organisation’s goal is to increase female participation at middle management and senior levels but it doesn’t wish to compromise on the quality of its hires, arguably the only feasible approach is to increase the catchment area from which it recruits.
However, not all companies have the appetite, mindset or processes in place to do so successfully. The expertise required and the logistics involved can be daunting to even the most international of businesses.
Securing executive buy-in, competing for talent on a global stage, coping with the administrative burden of visas and permits, choosing whether to manage this in-house or with the aid of an external partner, and developing and managing an international recruitment process all require careful consideration.
Gaining senior support, competing for talent on a global stage, dealing with visas and work permits, and developing and managing an international recruitment process – these are just some of the obstacles involved in hiring from overseas.
On the face of it, recruiting internationally is expensive, long and drawn out, and riddled with potential pitfalls. But with the right approach and support this doesn’t have to be the case.
International recruitment often fails due to lack of internal, executive support. Without it, attempts at attracting overseas talent can be ad hoc, half-hearted, expensive and ultimately unsuccessful.
Building a persuasive case and presenting this to senior management is crucial. A detailed proposal outlining the benefits – not limited to gender diversity (see section 6) - and how any risks can be mitigated is a key part of any strategic initiative. Recruitment should be no different.
Such a proposal should include projected costings and expected returns on investment. An attempt should be made to build a hard financial case and not merely a soft cultural one.
The Scottish financial sector should not underestimate the scale of the challenge in attracting high-calibre women from overseas.
Not only are we competing with the likes of London and Dublin for talent, we are also up against other global financial centres - New York, Hong Kong, Singapore, Dubai and Sydney.
However, working and living in Scotland has much to commend it. Not only is it a fantastic place to develop a diverse and rewarding career, it can offer true work-life balance.
Living in Scotland is generally less expensive than many other financial centres. It has high standards of education and healthcare, and easy access to outdoor activities and cultural events. It is an excellent location to raise a family while also pursuing an exciting career.
Scotland’s small and relatively static population of five million inhabitants means that the financial sector has for some time been supported by a limited pool of suitable candidates.
An intensified campaign on the part of organisations - employers, recruiters, universities, government and local authorities - to attract talent to Scotland has to be a priority, as it forms part of the solution to increasing gender diversity within our industry.
The UK’s decision in June to leave the European Union was a momentous one. It is highly likely the free movement of labour will be restriced between the UK and the rest of Europe.
But leaving aside the additional issues that will inevitably be created by Brexit, the sponsorship process for non-Europeans is already a complex one.
A hiring organisation needs to have a good understanding of eligibility for obtaining a sponsor licence, the types of licence it may want to apply for, the people who will be involved in managing sponsorship with the company, as well as the application process, timescales and costs involved.
Visas fall into one of five categories: Tier 1 (highly skilled), Tier 2 (skilled worker), Tier 3 (not implemented), Tier 4 (students) and Tier 5 (temporary migrants). For most vacancies, the company will need to satisfy a ‘resident market labour test’ and have robust systems in place to monitor sponsored employees.
Hiring organisations which have no experience of navigating through this process would do well to partner with an experienced international recruiter or an employment law specialist. This expertise will be even more important as the UK ‘unpicks’ itself from EU legislation.
Execution and management
Some Scottish companies have traditionally been wary of hiring from overseas, put off in part by a belief that costs are high and retention rates low.
Companies which choose to recruit directly are often hamstrung by the absence of a global candidate database or a lack of experience in conducting overseas talent attraction campaigns. If the responsibility of a busy HR professional, international recruitment simply becomes another plate that he or she has to spin. It is rarely a core function.
In this situation many companies turn to a recruitment partner outside its borders. But unfortunately Scottish-based organisations have often been badly served by ‘global’ recruiters based either in London or overseas.
The most common complaint is that recruiters outside Scotland often fail to grasp the specifics of the initial brief, not fully understanding the organisational and cultural nuances characterising many of Scotland’s financial institutions.
While in turn, many employers have bought into the myth that a Scottish-based recruiter will only have knowledge of and access to the local market.
Scottish-based consultancies which, in particular, have vertical and horizontal expertise, and a track record of attracting high calibre applicants from overseas, are arguably best placed to support an organisation’s talent management objectives.
Key to successful hiring within the international market is having a recruitment partner who has a deep understanding of your organisation and can operate as an extension and advocate of your employer brand. They should also have a keen appreciation of the risks involved in competing for talent on a global basis.
In the next section we examine the key stages of an international recruitment process and identify the main elements which make it successful and cost effective.
Whether managed internally or with the support of an external partner, a robust and rigorous international recruitment process will typically consist of
several interdependent and interlocking stages.
Being aware of the length of the process and the importance of maintaining engagement throughout are critical to its success. Crucially, the offer stage is likely to represent only the halfway point in the process.
1. Client mandate
Arguably, this is the most important stage in the entire recruitment process. If you are using a recruitment partner, it is critical they spend time with the company and its hiring managers to better understand the unique working environment, any succession planning issues, departmental personalities and cultural fit.
A recruitment partner who is close to your organisation – in terms of both geography and level of engagement – will be in a much stronger position to map and prioritise the main components of the ideal candidate.
A recruiter who can engage with you at a local level will be better placed to represent your employer brand in the global marketplace and act as an extension and advocate of your organisation. Being based in the same location as the role also means the recruiter can provide real insight into the benefits of living and working in Scotland.
2. Candidate search
Regardless of geography, you should work to identify the best possible candidates for the role as opposed to the most actively available.
Although candidates may come to you from across the globe, you should focus your sourcing efforts on key international financial hubs where you and/or your competitors already have a presence.
These will include:
- Asia-Pacific – Hong Kong, Melbourne, Shanghai, Singapore and Sydney
- Europe – Dublin, Frankfurt, Paris and Luxembourg
- Middle East – Abu Dhabi, Dubai and Qatar
- North America – Boston, Chicago and New York
To maximise your chances of attracting the ideal candidate, you will need to utilise a range of international sourcing methods, including:
(a) Referral & recommendation
If your employer brand is strong and levels of internal engagement high, you should make use of this. Advertise vacancies internally and encourage staff to share with family and friends. Word-of-mouth is still one of the strongest methods of candidate attraction.
(b) International database
If you have a recognised brand and already some experience of recruiting overseas, you should have a record of international candidates who may be suitable. If not, you may wish to partner with a recruiter which does.
(c) International job portals
You may need to utilise a range of international recruitment websites as well as your corporate website. Key to this is the ability to create impactful and persuasive vacancy adverts to attract high calibre candidates to your roles.
(d) Social networking & content marketing
If you have the resources, it is worth investing in the production of high-quality content – articles, podcasts and videos - which address the problems of internationally-based candidates and attracts them to your website and its vacancies. Such an approach also encourages people to share content with their overseas network and in turn other potential applicants.
To support this strategy, leverage your corporate presence on social media platforms such as LinkedIn, Facebook and Twitter.
3. Candidate selection
Ideally you should focus on candidates towards the lower end of the risk spectrum (see below), but without compromising on quality.
Just as you do for domestic assignments, you should pre-interview and pre-screen applications. For international candidates you will need to utilise online meeting technology and video conferencing facilities.
During the selection process you need to work hard to understand applicants’ career aspirations, working style, cultural preferences and lifestyle choices. For international recruitment, much more so than domestic hiring, this is vital in achieving the optimal fit between the applicant and the role and thereby reduces retention risk.
To support this, it is recommended you design and facilitate a suite of tests - personality profiling, business presentations, research and strategy papers - to assess and verify the precise skill sets of each candidate.
4. Candidate support
In order for you and the applicant to get as much out of the interview as possible, it is important to ensure they are fully prepared and have taken time to research the company and the role, and are ready to articulate their relevant skills and experience.
If the interviews are to be conducted remotely we would encourage you to invest in the latest online meeting technology so candidates receive the very best user experience.
To ensure the candidate remains fully engaged, you will need to provide constructive and timely feedback at regular intervals throughout the process. This is a particularly important aspect of recruiting candidates from overseas.
5. Managing the notice period
The notice period can be beset with pitfalls and bear traps. Managing this stage effectively can mean the difference between hiring the best person or having to start the lengthy and costly recruitment process all over again.
For example, it’s quite common for the outgoing employer to use the notice period as an opportunity to persuade your new hire to stay. An increase in salary may be promised. A potential promotion might be used to entice them to stay. Such offers can be hard to ignore.
To ensure the candidate is engaged throughout the notice period it is imperative you maintain dialogue. This can be done either directly or through your recruitment partner.
Done effectively, this not only mitigates the risk of dropout but also increases the opportunity for the candidate to hit the ground running.
6. Candidate vetting
In step with the notice period, you will need to access a vetting service which is international in its reach and provides a robust, transparent and uniform process to ensure your employee is compliant to begin work.
Vetting is a critical stage in the international recruitment process. High standards of communication between you and the candidate are crucial in speeding up completion times, mitigating the risk of applicant dropout and enhancing your employer brand.
Think very carefully before deciding to do these checks in-house. Pre-employment checks, particularly within the financial sector, now involve complex processes and should be left to specialists. International vetting procedures require even higher levels of expertise.
A key stage in any international placement is between offer and induction, particularly with the logistics surrounding relocation.
Ideally, you should provide the successful candidate with detailed information on the surrounding area and guidance on the property market, schools, nurseries and other local amenities.
For complete support during all stages of relocation you should consider using a relocation specialist, and ensure they maintain regular communication with the candidate throughout the process.
A familiarisation visit, a search for a new home, advice on schools or nurseries or other key lifestyle decisions – such level of support can often prevent a hesitant prospective employee from dropping out at the eleventh hour.
The final stage of any recruitment process should focus on retention. In the days, weeks and months following your international hire’s start date, it is critical you provide them with a framework of internal and external support.
Be on hand to offer advice and guidance on any queries your new employee may have about the role, reporting lines, job description, etc.
Whether directly or through an external partner, aftercare should be provided to relocated employees and their families, ensuring where possible that any outstanding logistical issues are resolved.
In most cases, new hires from overseas will welcome access to an informal network of relocated financial sector professionals.
This ongoing, post-placement commitment to your new hire can often be crucial in converting the ideal candidate into a long-term employee - especially if that employee was sourced from overseas.
There is no doubt international recruitment can be daunting. But the benefits far outweigh the challenges.
Additional benefits of international recruitment
Of course, the advantages of recruiting internationally are not limited to increasing gender diversity.
More and more financial sector companies in Scotland have global ambitions, whether it is extending market coverage, creating more portable products or pursuing clients overseas.
The commercial advantages can be huge when building a varied workforce in terms of age, race and ethnicity, education, culture, religion, sexuality - and, of course, gender:
- Increases the collective skills, experience and talent of your company
- Breeds creativity and innovation
- Reflects breadth and depth of your organisation
- Better mirrors your client base (90% of financial services companies have a base outside Scotland)
- Gives you access to a larger talent pool
- Helps build a modern brand
As a result, all stakeholders within the Scottish financial sector would benefit by developing a more international outlook when it comes to recruitment.
This will help rebalance the ratio of male to female workers through access to larger and more internationally-based applicant pools. In doing so, it will also provide companies with the requisite skills and experience to be successful on the global stage.
Below we've summarised the main actions required to enable your organisation to compete for talent on a global stage, and in doing so create a diversified workforce fit for the 21st century.
(1) MSCI, ‘Women on Boards: Global Trends in Gender Diversity on Corporate Boards’, 2015, p. 2
(2) McKinsey & Co, ‘Women as a Valuable Asset’, 2015, p. 6
(3) PricewaterhouseCoopers, ‘Mending the Gender Gap: Advancing tomorrow’s women leaders in financial services’, 2013, p. 1
(4) Lord Davies, ‘Women on Boards Davies Review: Five Year Summary’, 2015, p. 16Back To Top