Wall Street Courting Gay Students to Bolster Bottom LineBen Schenkel
Nick Maddock used to assume that being gay could only limit him on Wall Street. Instead, it opened a door.
“I want to break that mold, the stereotype of what gay people want to be,” said Maddock, 22, a senior at Southeast Missouri State University in Cape Girardeau, during a reception at the Out for Undergraduate Business Conference at JPMorgan Chase & Co. headquarters in New York.
The OUBC organization covered Maddock’s travel and lodging expenses, putting him in contact with recruiters in the industries where he’s aiming for a job.
Wall Street is paying special attention to young lesbian, gay, bisexual, and transgender (LGBT) applicants during the hiring process for college seniors. Beyond embracing gay rights, the country’s largest banks, brokerages and consulting firms are vying to retire their conservative image and try to improve profits along with diversity.
“The perception of Wall Street, historically, was that it’s very macho and doesn’t necessarily have space for difference,” said Todd Sears, 37, a former investment and private banker who now consults on LGBT business opportunities. “Companies are realizing that diversity is a smart business choice.”
Last week the U.S. Senate passed a bill that would prohibit firings based on sexual orientation, which currently isn’t outlawed in 29 states. The bill’s future is less certain in the Republican-controlled House, where Speaker John Boehner of Ohio has expressed opposition to the measure.
Virtually all of Wall Street has extended protections to LGBT workers and benefits to their partners. Companies such as Goldman Sachs Group Inc. are among those that have supported changes in state laws that bar same-sex marriage.
“LGBT equality is not only a civil rights issue, it is also a business issue,” said Goldman Sachs Chief Executive Officer Lloyd C. Blankfein in April while speaking at the Out on the Street summit founded by Sears. “To be successful, we must attract, retain and promote from the broadest pool of talent available.”
The buying power of LGBT Americans is estimated at $830 billion this year, according to Washington-based marketer Witeck Communications Inc. That’s up from $790 billion in 2012 and compares with about $12.4 trillion in total spending power of U.S. consumers, said Bob Witeck, who has been advising corporations on LGBT consumers since 1993.
“By hiring gay people, a financial services company may recognize they have a chance” to expand their share of LGBT clients, Witeck said. Gay financial counselors “will probably have a lot more sensitivity” in connecting with that market, he said, because “they have some affinity for their needs and issues.”
Of 688 large U.S. companies rated on their inclusive treatment of LGBT workers, 33 in the banking and financial services sector received a perfect score in the 2013 Corporate Equality Index, compared with one bank when the survey began in 2002. The survey is conducted by the Washington-based Human Rights Campaign, which advocates for lesbian and gay Americans. Part of a company’s score hinges on best practices, including gay-focused recruitment.
Appealing to that population is a “particular passion” for Brian Rolfes, the director of global recruiting at McKinsey & Co., who is gay. The consulting firm “looks for the same attributes in all the candidates we hire,” according to Rolfes.
“We will reach out to various communities to encourage folks to consider us,” he said. “Today, a lot of our competitors are also targeting LGBT talent, as they should be.”
As part of their outreach, financial services companies are donating to conferences like OUBC. Bloomberg LP is one of the sponsors. In 2011, OUBC reported $279,500 in contributions, up from $166,000 the previous year.
“By having a more diverse workforce, you’re better reflecting your clients,” said Baylee Feore, the executive director of OUBC, which just had its 10th conference. Attendees “have more chances to make a good impression, but when you go to the interview, you fail or succeed on your own merits.”
Many of OUBC’s 30 sponsors also hold their own LGBT networking receptions at top-ranked schools like Harvard University in Cambridge, Massachusetts, and the University of Pennsylvania in Philadelphia, according to their directors of career services.
The “Big Three” consulting firms -- McKinsey, Bain & Co. and Boston Consulting Group Inc. -- will match self-declared lesbian and gay students requesting support with employees who volunteer to help prepare them for an interview.
One such volunteer is Marco Chan in the Washington office of Bain. The Harvard graduate, 25, said he probably would’ve shied away from a business career if not for OUBC.
Chan said he views his sexual orientation as an asset in his career, providing a network of mentors and friends. “I’m very deliberate in sharing parts of my LGBT life,” said Chan, who attaches a rainbow pin to the bag he takes on client visits. “It feels less transactional when you come out to your clients and involve them in your LGBT identity.”
Henry Orzynski, 24, an analyst with JPMorgan, said being openly gay has helped him earn the trust of clients and the respect of his managers. In his year-end review, Orzynski said he was praised for displaying his boyfriend’s picture on his desk, a reaction he didn’t expect.
“That was actually brought up as evidence of character, so it’s definitely a comfortable environment,” he said. “To be a person that’s open about everything is an advantage when dealing” with clients.
At Ernst & Young LLP, Jorgan von Stiening is co-chairman of the company’s internal LGBT network, “Beyond.” The network pointed von Stiening to an opening in the real estate division, he said, allowing him to change tracks.
Now in his seventh year at Ernst & Young, von Stiening, 29, is working to turn the affinity network into a platform that’s “actually something quantifiable for the firm in terms of getting business.”
PricewaterhouseCoopers LLP has an advisory board of 10 LGBT partners at a time, said Jennifer Allyn, managing director of PwC’s office of diversity. The group focuses on providing mentorship much more than attracting outside clients, Allyn said, though it has a business development subcommittee.
“We have certain advisers who spend a little more time in the LGBT community than others,” said Kelly Coffey, deputy CEO at the JPMorgan U.S. Private Bank. “But we don’t centralize that in any way.”
While Coffey hasn’t observed any American clients hesitate to work with an openly gay adviser, she said, foreign clients might be less willing to -- a concern echoed by Chan, the Bain consultant, who hasn’t had a negative interaction so far.
“Laws are the way they are in the Middle East and Singapore,” Chan said. “The reality is that our firm does everything it can to be supportive, but people still go outside the office.”
Not every path on Wall Street has opened up to LGBT workers, according to Brian McNaught, a sensitivity trainer based in Fort Lauderdale, Florida, whose clients have included Goldman Sachs and Citigroup Inc. While McNaught has seen progress in corporate policies, he still hears about casual slurs on trading floors.
“The traders will make fun of you for any difference,” he said. “They know they’re the golden boys, the ones who bring in the money. It’s very different from being in a back office.”
Wall Street’s LGBT outreach seems like “a well-intentioned but naïve approach, with little impact,” said John Sullivan, a management professor at San Francisco State University who assesses recruiting strategies. Banks and consulting firms aren’t necessarily tracking whether lesbian and gay workers are represented across segments, or promoted with the same frequency, he said.
“You don’t try to measure those things if you’re afraid of what you’re going to find,” Sullivan said.
Feore, the head of OUBC, said there’s still a “mirroring problem” in many corporate workplaces, where minorities become dispirited and may quit if they don’t see people like them in senior positions.
Back in Missouri and busy with job applications, Maddock said in a phone interview that OUBC was an “eye-opener” about his employment potential in finance or consulting. He plans on contacting the recruiters he met to help get interviews.
“The world is changing to a more LGBT-accommodating view,” he said. “You see these front-runners in business who are right there on top of this.”