Getting a job at a bulge-bracket bank is already a battle of wills. You’ll need the proper network, resume and people skills to earn an offer, after which you’ll have to dance through red tape from HR, including background, credit and employment verification checks as well as a drug test, more than likely. But if a global financial regulator (of sorts) has its way, the hiring process may soon feel more like a proctology exam.
Buried in the latest 70-page report from the global Financial Stability Board (FSB) are a number of rather specific recommendations surrounding the hiring process at banks that could create equal headaches for managers, candidates and human resources.
The FSB, tasked with monitoring the global financial system and making recommendations to regulators, is asking banks to consider conducting interviews with candidates that are separate from traditional sit-downs with hiring managers. Instead, they would be strict behavioral assessments that focus on previous conduct as well as hypothetical situations aimed at spotting potential red flags.
Admittedly, many of these types of questions are already being asked, but by hiring managers. The FSB guidelines call for having candidates respond to hypothetical ethical dilemmas from “trained observers” as well as employees who work in control functions, which may “send a signal” to candidates from the outset on the importance of risk and compliance. But control staffers would hold more than just a ceremonial role in the interview process. “Members of control functions could also provide an employer with an alternative view on the suitability of a candidate for a position,” the authors wrote. The potential involvement of organizational and behavioral psychologists was later mentioned.
Another recommendation includes the creation of more comprehensive databases on financial services professionals where firms could share information on past employees. The FSB also promotes conducting exit interviews with outgoing employees and maintaining records of those conversations that could be later viewed by competing banks.
Perhaps the most eye-opening suggestion is to have financial firms redo background checks on current employees at certain career milestones. The examples the FSB give are three months and one year following a hire, as well as when employees are promoted and even when they make lateral moves within the company. Banks may also want to routinely review voice recordings of client interactions and mine information from employees’ social media posts, according to the FSB.
Quite how this Big Brother-like behavior would sit globally with EU data protection legislation isn't clear, but to some extent it has already been happening. Barclays, for example, installed heat and motion detecting sensors below bankers’ desks to see how much time they spend at their post. Other banks have at least tested predictive analytics software to identify whether employees are exhibiting odd behavior. Now, hiring managers may soon need to get the sign-off from a behavioral psychologist and a social media expert to make a senior hire.
It’s important to note that the FSB isn’t technically a regulator as it can’t impose mandates. It simply monitors the global financial system and makes recommendations to authorities and banks based on its research. Still, the FSB is chaired by Bank of England Governor Mark Carney and was once called one of the “four pillars” of global economic governance by former U.S. Treasury Secretary Tim Geithner, so it wields considerable power behind the scenes.
The bulk of the FSB report focused on the importance of assigning personal accountability to senior bankers to help prevent employee misconduct – a point that largely overshadowed some of the recruitment recommendations.
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