So Bob Diamond has finally decided to step down, amid all the furore following Barclay’s record fine for trying to manipulate the Libor rates. I can’t say I’m altogether surprised: his resignation was inevitable, given the level of media interest, public outcry and, perhaps most damagingly, condemnation from senior politicians. But part of me is disappointed.
That the actions of a few traders in trying to manipulate the inter-bank lending rate were wrong, is clearly undeniable. And that it took place on Bob Diamond’s watch, and that there were no control mechanisms in place to identify and prevent this kind of activity, is also not at issue. And for the record, I share the disappointment and shock felt by many over this whole episode.
But let’s look at the facts. The fine imposed by US and UK regulators last week, related to the activities of 14 traders, between 2005 and 2009. Most of those traders have already left Barclays, which co-operated fully with the regulators’ investigation. Barclays also announced it would “rigorously” review the conduct of all those involved, and take appropriate disciplinary action, including bonus claw-backs. (Admittedly that announcement only came last week, but nonetheless, it did come).
So I’m not saying something didn’t go very badly wrong at Barclays, and possibly at other banks, because clearly it did. But Barclays (and the industry as a whole) recognises the severity of the situation, and is taking action. (RBS confirmed it had already sacked 4 of its traders over their alleged involvement in the scandal last year).
What interests me is how Barclays in particular, and the banking and securities industry as a whole, goes about rebuilding its reputation, in both the corporate and employer space.
Granted, it’s going to be a huge challenge. Since 2008 and the global financial crisis, the reputation of the sector has taken something of a beating. Clearly the media should be allowed to investigate and ask questions when our banking and securities industry behaves with anything other than the highest standard of ethics. But surely that should be proportionate? Does anyone else get the impression that media companies and politicians have been lining up to put the boot in? (Why am I thinking about one of my Mum’s favourite rebukes, “people in glass houses …”?)
After all, it’s not like businesses in the banking and securities sector are the only ones to demonstrate poor judgement and lack of rigour, is it? In the last 24 hours, it has been announced that GlaxoSmithKline has been fined a record £1.9bn by US authorities – nearly 7 times the fine imposed on Barclays last week – for promoting 2 of its drugs for unapproved uses, for making unsupported safety claims about another drug, and for failing to provide data to the US Food and Drug Administration (FDA). Will the story follow Barclays, from the business pages to the front pages? And will it have such a profound impact on GSK’s employer reputation?
According to PwC’s 2011 Millennials at Work report (a survey of 4,000 graduates worldwide), 9% of graduates already won’t consider working in the banking and capital markets sector. To what extent that number grows, when the impact of the latest scandal works its way through, remains to be seen. But given that 59% in the same survey said they were looking for an employer with CSR values that matched their own, it would be reasonable to assume that Barclays’ application numbers may be down next year, and they will slip down the Times list of Top 100 Graduate Employers from their current 14th spot.
And of course, reputation doesn’t just impact graduate recruitment, it also affects professional and experienced hires. The last time Barclays appeared in the Sunday Times/Best Companies to Work for lists in 2006, they made it to 6th spot. (Interestingly, Barclays was one of 6 banking and financial services companies to make the top 20 in 2006; in 2012’s list, there were only 3).
It would be a mistake to assume that, just because the sector is contracting as a result of the Eurozone crisis (with an estimated 90,000 job cuts announced worldwide this year by the world’s 50 largest banks), that Barclays (and the wider banking sector) has time on its side.
Despite the cuts, there are acute skills shortages in the sector (notably in areas such as M&A, technology, financial information exchange, and risk management); and the market is continuing to grow in China (where the China Securities Regulatory Commission reported that the number of investment banking employees would need to grow from its current level of 330,000 to 1m by 2020 to meet demand) as well as Brazil, India and the Middle East.
If banks like Barclays are going to compete for the very best graduate and professional talent now and in the future, they are going to have to take a leaf out of BP’s book. BP faced what must be one of the worst reputation crises in corporate history, and have emerged from that period, ranked 28th in the engineering list of the World’s Most Attractive Employers by Universum.
BP have succeeded where the banking sector has so far failed (the Deepwater Horizon accident took place a year after the collapse of Lehman Brothers) with a clear and simple strategy: fix the problem; act with humility; invest in the employer brand; and bring the employee experience to life – via its people in a relevant, local setting (see BP’s Our Stories for a fabulous example of this in action).
So as difficult as this week has undoubtedly been for Barclays employees, perhaps Bob Diamond’s resignation is the first step that Barclays needs to take, in order to rebuild its corporate and employer reputation. And if Barclays can take that path, the sector as a whole can surely do the same.
Filed under: Employer branding & reputation management, Financial services, Talent attraction | Tagged: banking, business, candidate attraction, employer branding, experienced hires, financial services, global financial crisis, graduate attraction, graduate recruitment, investment banking, linkedin, professional hires, recruitment advertising, recruitment marketing, reputation management, talent, talent acquisition | 2 Comments »