Diversity Hiring: An Asset for Asset Management?

by Liz O’Donnell (Boston)

The number one hiring request at fund management firms right now is for diverse candidates, says Karen Fenaroli, a recruiter who specializes in senior level jobs at asset management firms. It sounds encouraging, but is it really? Are the requests for diverse candidates a response to the growing body of literature and research that shows a strong correlation between women at the top and healthy bottom lines? Has Wall Street decided more women and people of color makes for better business? Or are human resource professionals merely mandating that their hiring managers simply follow the Equal Employment Opportunity Guidelines. As Fenaroli puts it, “Are they looking for an appropriate perspective of women in management or just checking off a scorecard?” The answer lies somewhere in the middle.

Clara Sierra is the Executive Vice President of mutual fund company Sentinel Investments, and one of the highest ranking people at the firm. She has an impressive resume having worked at AIG and Alliance Capital before joining Sentinel.  She is also female, Hispanic and a mother.

“On paper I look like everyone else,” she says, “but in real life, I don’t look like anything in the room.” So when she got a call from a recruiter who told her she was the hottest ticket in town and not to worry what the job entailed, just know the position was “top echelon, corner office and they want a woman,” Sierra thought it was “bombastic.”

James Walsh, author of “Mastering Diversity: Managing for Success Under Anti-Discrimination Laws“, says hiring managers are looking first, for great people and second, not to get sued. “The key question is do you want a diverse payroll or do you want diverse people working for you? Is diversity something you look for in the individuals you hire?”

The Challenges of Recruiting More Women in Finance

A former financial recruiter who spoke only under anonymity said, “It’s not so much people are saying, ‘Find me a women,’ but ‘we want these characteristics in a candidate.’ Finding a woman is the icing on the cake.”

But despite the demand for diversity, presenting women and other diverse candidates can be challenging. “You’re walking that fine line,” she says. “You’ll do a lot of referencing. There’s a concern they only have the good résumé because they are diverse. You better do extensive background checking. (The candidate) better not have been a token.”

Tokens and quotas– these aren’t words that necessarily inspire. Plus, they can be legal hot buttons. Says the anonymous recruiter about requests to find diverse candidates, “All conversations have always been offline – in meetings, via telephone. They don’t want the paper trail. They don’t want reverse discrimination (issues).”

She added that the mandate from her clients has been less about avoiding law suits and more about, “Can we see someone different? Everyone is cut from same mold, which is why we are where we are today.” 

That awareness, that so many on Wall Street fit a similar profile, and more importantly, think alike, is fueling some of the diversity searches. “I think the industry is in a rut as far as critical thinking,” says Sierra. “It’s the same old same old. Financial services — before, during and after (the economic crisis) –needs a diversity of intellectual capacity. Period the end. Intellectual capital doesn’t need organization. Organization needs intellectual capital.” Sentinel, says Sierra is looking for “the best talent and we want to be exposed to women looking to grow their career.”

Says Walsh, “Diversity is something you look for in the spirit of the people you hire. You’re looking for interesting individuals.” He goes on to say, “Nobody wants (the boardroom to be) a bunch of 35-year old white guys out of Stanford.”

Work-Life Balance as Barrier to Women on Wall Street

If that’s the case, and recruiters are seeing more diversity assignments, why is so much of still Wall Street dominated by men?

“I do think part of it is work life balance,” says the recruiter. “I wouldn’t call it work ethic.” A woman seeking flexibility is “still working hard. But she’s putting her energy in different places.” This recruiter thinks asset management is a more female-friendly sector than investment management and other financial careers. “They’re not pulling all nighters,” she says.

Sierra says Sentinel attracts and retains women because, “We’re operating from a position of what do our employees and clients need. Do we need flex time? Boom, done.”

To attract the best talent, she says managers should look within their own firms. “They have to start looking at the women holding traditional roles.” Sierra suggests women in administrative and operational jobs could be great candidates for management because they are most likely educated, licensed, and already know the firm and its clients. These women may have opted for positions in the firm that are more amenable to balancing families with career. And so many of the organizations have not created an environment where work-life balance is possible at the top.

Adds Sierra, “These organizations are missing it—missing it.”