Buyout firms risk ‘women-only’ hiring
Posted by Kea ConsultantsJuly 13, 2015
Article from efinancialnews.com by Becky Pritchard 13/07/2015
A number of private equity firms are resorting to women-only recruitment processes in an effort to correct persistent gender imbalance.
One recruiter at a London headhunting firm said it had run four recruitment processes for private equity firms in the past year where only women were considered for junior investment jobs. It was done only for firms that had no female investment executives and had failed to correct this by other means, the recruiter said. The person said: “Desperate times call for desperate measures.”
No matter how good the intention, however, a lawyer said women-only shortlists would be against UK employment law.
Mark Mansell, a partner at law firm Allen & Overy, said: “You cannot discriminate at the point of selection.”
The recruiter said the moves were a one-off attempt to address the gender issue, rather than a change in the firms’ recruitment policy. In private equity, women have 14% of front-office jobs – lower than investment banking (19%) and asset management (21%), according to research by think tank New Financial this year.
Another recruiter, Gail McManus, founder of Private Equity Recruitment, said that she had discussed women-only recruiting with private equity firms but it was “not very practical”.
She said firms wanted to recruit more women and avoid “unconscious bias” that could favour male candidates. She said private equity firms knew there was a clear gender bias and wanted to do something about it.
She added: “The debate is how. It’s a really big issue for PE people and to be fair to them this is why they are debating it and trying work out how to address it.”
A quarter of European private equity firms have no women in front-office investment jobs at all, according to New Financial. But there are signs firms are starting to hire more women for junior investment roles.
Roughly 18% of the new junior hires by private equity firms in Europe this year were women, compared with 16% last year, according to research by recruitment firm Kea Consultants.
Hephzi Nicol, founder of Kea Consultants, said that at private equity firms the issue was “moving on to the partnership agenda”, with partners saying: “We’ve got to get more diverse investment teams and women.” But senior women in the industry have questioned all-women recruiting.
Rhonda Ryan, a partner at Altius Associates, said: “I don’t like the idea. You should recruit the best person for the job and it should be apparent to all that is what you have done. Recruiting is always difficult and you don’t want it to end with people saying ‘Well that went wrong because we only wanted to hire a woman’ – that would reflect poorly on the recruiters and worse still may ultimately make it harder to recruit more women into that position in the future.”
Marleen Groen, a senior adviser at Stepstone Group, said: “It would not be possible to do a female-only process and out of principle I just don’t think it’s workable. Women don’t want to be the token on the team, I certainly wouldn’t want to be. The real issue is that private equity is not very attractive to younger women and we need to do some serious looking into why not.”