The cost of letting bullying and harassment get out of hand in the financial sector

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Bullying and harassment in the financial sector

£4.7 million. That is the total one banker was awarded from RBS after enduring years of bullying and disability discrimination at work. The average payout given to employees who faced problematic behaviour at work is £381,350, which is still a high figure and many people say the compensation they received does not make up for the emotional distress caused. According to our findings, for those who had experienced bullying and harassment in the financial sector it was a staggering 77%, which alone should tell you that your employees’ mental wellbeing should be of utmost importance and more should be done to protect and support them from problematic behaviour at work. And of course protect your reputation.

35% of employees working in banking and finance have experienced bullying, harassment or discrimination at work. This may have been the lowest percentage from the sectors we highlighted in our report “Paying the price for problematic behaviour”, but other statistics show that it is still a big problem. For example, 46% of employees in the sector have witnessed problematic behaviour but only a third of them (34%) have reported it before.

Diversity and Inclusion in the finance sector

Statistics show that gender diversity in the finance sector is broad depending on the organisation and the roles. The Financial Conduct Authority (FCA) says 16% of regulated financial advisers are women, the proportion of women working in authorised positions in the UK banking sector is 20% and 9.7% for CEOs, whereas the share of female employees in the total workforce of the largest banks in the UK is 53%.

For ethnic minorities, they currently hold fewer than 1 in 10 management jobs in the sector. In Fintech, almost 20% of workers are from ethnic minority groups, higher than the national population. But 70% of financial sector employees have experienced discrimination at work in the last year and four-fifths have experienced unwelcome comments based on their background. And both women and ethnic minorities as well as other marginalised groups have faced barriers to career progression in addition to sexism, sexual harassment, racism and other forms of discrimination.

Of the employees working in the financial sector that we spoke with, 39% said their sector doesn’t feel very diverse full stop, 45% feel their workplace could do more when it comes to diversity and 52% feel it should be more of a priority in the workplace. So how can companies in this sector do that? For advice on how to manage and promote diversity and inclusion in the workplace, read here.

Why are employees in the financial sector afraid to speak out?

As we mentioned, so few people in the financial sector say they have reported problematic behaviour before. This could be due to a culture of fear and mistrust; 31% say a previous incident has led them to not trusting their employer and 23% wouldn’t share their concerns in annual employee surveys.

Here are just three of many reasons why they may not want to speak out about bullying and harassment in the financial sector:

1. Silence and a culture of fear

When people have been brave enough to speak up about toxic work culture, normally after leaving, they have talked about the organisational silence and a culture of fear and intimidation that drove them to leave (45% of people working in the financial services sector have previously left a job due to bad culture) or that is well known within the company, yet never addressed. 

40% said they have felt silenced on issues that matter to them in the workplace, higher than the average of 36%. Furthermore, 32% said if they witnessed someone being bullied by somebody senior to them, they wouldn’t get involved through fear of repercussions. While this is an understandable and valid reason, it shouldn’t be that way and employers should make sure that not only are policies in place to protect the victim and the witness more than the perpetrator but that they are followed through on.

Sadly though, many also mention hierarchical power structures and traditions of very non-diverse top level teams as the main reason why bullying, discrimination and harassment gets out of hand and are overlooked or swept under the rug. So how do HR and ED&I teams within those organisations influence the decision makers when it comes to making and enforcing changes? Our blog post on getting senior leader buy-in to your diversity and inclusion work may be able to help.

2. Bullying and harassment and mental health

When bullying, discrimination and harassment affects a victim’s mental health, that in itself can be a reason why they won’t speak up. Our post on workplace wellbeing shows that the general mental health of many employees is often directly a result of their work, and research by Mind found that a whopping 92% of the British public believes that admitting to having a mental health problem would damage someone’s career and that 1 in 4 UK workers are struggling in silence because they haven’t talked to their employer about it.

So it is imperative employers do their best to support their people to protect their mental health and wellbeing and if it’s affected by bullying, discrimination and harassment to stop it.

3. They don’t think they will be believed

Victims of bullying, discrimination and harassment may not report what happened because they don’t think they will be taken seriously or believed or that nothing will be done. This may stem from previous experiences or that same culture of fear that they know is prevalent within their workplace. In many other instances, they are afraid their lived experience will be dismissed or downplayed. Research by reboot. shows half of financial services employees have raised racism and discrimination issues with HR, yet only two-fifths felt they were effective in dealing with the issues and a third wouldn’t feel comfortable reporting inappropriate or discriminatory behaviour at their organisation in the future.

And it’s no wonder they think these things when 77% of those we asked said at the time of the incident they experienced, they felt like they had nobody to turn to and 85% said they felt like their colleagues didn’t step in to support them. But when just a quarter of them would distance themselves from somebody being bullied in their workplace to avoid any conflict and 63% also said if they witnessed someone being bullied by somebody junior to them, they’d step in or report the issue, it shows that in some cases there is or would be willingness to do something if they could – without fear of repercussions.

If you’re someone that is responsible for dealing with bullying, discrimination and harassment allegations, the one advice we can give, which other professionals in our anti-racism and anti-bullying webinars have agreed with us, is the first step is “to believe them”. You can also read more about that in this blog post which lists ways to be a better male ally to female victims of sexual harassment but can be applied universally to other incidents.

The effects of bullying and harassment in the financial sector

As well as affecting the mental health and wellbeing of those who experience bullying, discrimination and harassment, a team’s productivity could suffer due to absenteeism and presenteeism, it could potentially cost the company a fortune as we have already highlighted at the start of this post, and their reputation could also suffer. This was certainly the case for the Open Banking Implementation Entity (OBIE) back in 2021 when a CMA investigation into claims of sexist and racist behaviour concluded OBIE allowed “a culture of intimidation” was a national scandal. 

While ED&I and HR leaders should of course work to put the right policies and procedures in place, implement ways to for people to report incidents, and conduct training, among other preventative measures, it should also be down to the entire organisation to make sure they are working together to make their workplace as inclusive, positive and supportive as possible. This includes managers being trained on how to deal with cases and being held accountable as well as all employees knowing they are responsible too and what they can do. To see how one of our financial services partners – Praetura – does this, watch, listen to or read our case study with them here.

Who regulates the financial sector?

The FCA has made it clear that firms need to have appropriate systems and controls in place to uphold a positive working environment and ensure their employees act with personal integrity. Where senior managers have been in breach of the standards expected, the FCA may issue fines and even ban individuals from working in the industry for misconduct. Additionally, managers are also required to deal with conduct in the areas for which they are responsible and senior managers can face penalties if they fail to take action in response to inappropriate behaviour.

And the Equality Act 2010 states that employers are responsible for preventing discrimination and harassment and they’re liable for any harassment suffered by their employees. So why is it still going on?

How can you improve workplace culture in the financial sector?

As ED&I professionals know, it is not a box-ticking exercise and nor is it something that can be changed overnight but there are a number of reasons why we hang our hat on the power, importance and benefits of anonymous reporting. Many of our partners understand that receiving rising numbers of anonymous reports is not necessarily just a cause for concern about what is happening but shows an increase in trust that people are having in a system to make a report, especially as they receive more named reports as time goes on.

More than half (51%) of people who have experienced bullying and harassment in the financial sector say they would be much more likely to report it if they had an anonymous platform to do so, which should be enough to help you understand that providing one for them can only result in a positive impact. By giving them the option to report anonymously, it can reduce the barrier of fear, foster a culture where they feel confident enough to speak up and know something will be done about it should they wish it to, and will allow you to get a better understanding of what is going on within your organisation and find ways to stop it from happening.

If you want to find out more about how Culture Shift can help you make a worthwhile investment that could potentially save you millions of pounds in re-recruitment or lawsuits – and has been adopted by more than 100 organisations, including EY, Macfarlanes and the Cabinet Office – contact us for a chat!

How can we help you?

Reach out to our dedicated team who will be happy to answer any questions you may have.

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