By: Iman Jaffari
Recent Industry Trends
When it comes to workplace harassment, the banking and financial services industry reports some of the highest incident counts. A recent 2019 report published by Violation Tracker found that major banking and financial institutions in North America are amongst the firms which have paid the highest amount of damages in settling cases of employee abuse, mistreatment, and sexual harassment allegations. [1]
Moreover, other employment studies of the industry show that up to 35% of employees working in the financial services industry have experienced bullying, harassment, and sexual harassment in their place of work. Such noticeable trends and findings beg the question of why the financial industry, in particular, is suffering from such a record number of harassment cases.
Causes and Areas of Concern
Gemma McCall, an expert on HR and workplace practices and the CEO of Culture Shift, believes the total number of harassment cases is underrepresented in the above studies. Regarding the financial and banking services industry, McCall mentions that “there is still a lot of work to be done considering just under half of the financial sector workers wouldn’t report toxic behaviour even if it was happening at the present.” [2]
Such a high number of cases is likely due to the formal, hierarchical, and ultra-competitive workplace culture of many financial and banking services firms. Specifically, many top firms here are paying out record salaries to first-year hires, and the decrease in total available positions every year creates a very selective and cut-throat application process. Upon hire, the work and job demands are also very high for many employees. In several top US firms, employees worked 20 hours shifts from 9:00 AM to 5:00 AM, seven days a week. [3]
However, the workplace demands in this industry do not end here. At the end of the year, financial services employees often compete for a limited number of highly sought-after promotions based on their annual performance review by upper management. Dubbed the up or out policy, many firms in the financial services industry dismiss any employees who fail to get promoted after their end-of-the-year performance review. [4]
The promoted employees remain but must go through this entire ordeal again the following year. It is easy to see how such high stakes and high-pressure environment dramatically contributes to placing employees in very vulnerable situations. This hierarchical power dynamic combined with vulnerable employees concerned with their job security is fertile ground for workplace harassment and abuse.
“Speak-up Culture”
McCall observes that the high number of workplace harassment cases highlights the importance of needing a massive workplace culture shift in this industry. Such a change aims to foster and promote a “speak-up culture.” Specifically, McCall argues that “companies and organizations that treat their employees fairly, actively adopt the appropriate anti-discrimination and harassment protocols, foster a truly speak-up culture and constantly work to create safe and supportive environments will thrive and flourish.”[5]
Possible Outcomes
However, it remains to be seen if the very traditional and rigid culture present at many financial and banking services firms will yield to such changes. The work-from-home phenomenon in recent years has brought forth such concerns front and center in the conversations surrounding workplace culture. Specifically, there is an ongoing exodus caused by financial sector employees refusing management demands of returning to their offices. [6] Perhaps, this could be the key deciding factor in forcing employers and managers in this industry to create a less hostile and more welcoming workplace environment. Still, only time can tell whether such a change will ever occur.
Disclaimer: The information provided in this response is for general informational purposes only and is not intended to be legal advice. The content provided does not create a legal client relationship, and nothing in this response should be considered as a substitute for professional legal advice. The information is based on general principles of law and may not reflect the most current legal developments or interpretations in your jurisdiction. Laws and regulations vary by jurisdiction, and the application and impact of laws can vary widely based on the specific facts and circumstances involved. You should consult with a qualified legal professional for advice regarding your specific situation.
Sources
[1] Janson, Abel (2019), Report: Big Banks Rank High Among Corporations Paying the Most Penalties in Workplace Discrimination and Harassment Cases, Good Jobs First.
[2] Rozi, Jones, (October 2021) Over A Third of Financial Services Employees Have Experienced Workplace Bullying Or Discrimination, Financial Reporter.
[3] Gura, David, (May 2021) Absolute Meltdown’: Wall Street’s Work Till You Drop Culture Under Attack, NPR.
[4] Michael C. Jensen (1998). Foundations of Organizational Strategy. Harvard University Press. p. 215.
[5] Rozi (2021).
[6] Colvin, Jeff (March 2022), Goldman Sachs’ CEO Demanded All Employees Return Full-Time to The Office. Only Half Showed Up, Fortune Magazine.