Bringing Professional Women Back Into the Workforce

April 20, 2007
It took a newspaper article to crack the usually thick skins of women on Wall Street. "The Opt-Out Revolution," which ran on October 23, 2003, in The New York Times Magazine, concluded that educated, professional women are leaving the workforce when they have children because they have the resources. Their careers, according to the story, were just not important to them.

    Like many of her peers, Anne Erni, a 19-year Wall Street veteran and mother of two, was angry. "I felt that it over-generalized," she says. "But I have to say, when I looked around, I realized that a lot of my female colleagues had opted out, so I had to ask, ‘Is this really the reason they are leaving? Just because they can?’ "

    Erni had a vested interest in finding the answer. Just months earlier—at the request of Lehman Bros. chief operating officer Joseph Gregory—she agreed to leave her position as senior vice president/head of marketing for equity finance to become the New York-based financial services company’s first chief diversity officer.

    Erni’s mandate was, among other things, to find a way to recruit and retain women for senior positions at the firm.

    Lehman has launched a number of programs during the past three years to achieve such a goal, including a formal flextime work policy, creating an incentive pool tied to diversity efforts, and establishing a program to recruit experienced women who have left the workforce.

    Work/life balance and Wall Street have seldom gone hand in hand. But Lehman, like an increasing number of companies, is realizing that to compete in the global environment, it must have round-the-clock talent available. At the same time, the old-school mentality of expecting both male and female employees to work 16-hour days is no longer the smartest way to proceed.

    "Companies need to figure out how to have their best talent available 24 hours a day without burning them out," says Janet Hanson, a former Goldman Sachs executive who was hired by Gregory in 2004 to help recruit and retain women at Lehman. "There’s nothing macho anymore about having a heart attack on the trading floor."

    That means companies have to go beyond the traditional venues to find talent and rethink how they define work, Erni says.

    "Joe Gregory intuitively understood that women approach their careers in a nonlinear way, as opposed to men," Erni says. "And we realize that the first company that can restructure its workforce around that fact and create a different way of working will be the company that is going to win the war for talent."

    It’s expensive to lose experienced employees, Erni says. Lehman won’t disclose actual costs, but Erni agrees with experts who estimate that it costs as much as 200 percent of a highly skilled employee’s annual salary to replace them.

    It’s been more than three years since Lehman started its efforts, and the company seems to be making progress.

    According to a recent survey of 19,000 employees, 21 percent of respondents say they work flexible hours, up from 14 percent in 2005. And in order to identify and bring back women to senior positions, Lehman in 2005 launched Encore, a series of daylong events for women who have left the workforce. So far, Lehman has lured back 23 women.

    Whether that translates into more women in the firm’s senior ranks is unclear. Lehman won’t say how many women are managing directors. But according to announcements made by the firm, only 26 of the company’s 158 newly elected managing directors this year are women.

    Getting those numbers up is particularly crucial for Lehman to attract younger female recruits out of business school, says Claudia Tattanelli, CEO of Universum USA, a Philadelphia-based employer branding consultant.

    "These graduates want to see women in senior positions," she says. And the number of women with graduate and professional degrees is expected to grow by 16 percent during the next decade, compared with 1.3 percent for men, according to the New York-based Center for Work-Life Policy.

    "There is a lot of competition for this pool of talent," Tattanelli says.

Tapping the talent pool
    To get some answers about why women leave the workforce, Lehman signed on as one of the first sponsors of a study, "Off-Ramps and On-Ramps: Keeping Talented Wo¬men on the Road to Success," conducted by the Center for Work-Life Policy.

    The study, which is based on responses from 2,443 women with graduate, professional or high-honors undergraduate degrees, found that 37 percent of highly qualified women and 43 percent of women with children had left the workforce for a period of time.

    Ninety-three percent of those women said they want to return to their careers, but only 74 percent managed to do so. An even more disturbing statistic for employers: Only 5 percent of highly qualified women looking to return to work want to rejoin the company they left. That number drops to zero in business sectors. The study speculates that the reason for this finding is that many women felt underappreciated by their employers when they left their jobs.

    For Erni, the study disproved the widely accepted notion that women left the workforce to be with their kids and there was nothing employers could do to keep them.

    On one hand, managers were saying that they had to respect women’s decisions to leave while at the same time they were saying they couldn’t find women for senior roles, Erni says. "But when I saw that 93 percent want to return to work, I said, ‘This is the new workforce.’ "

    The next challenge, however, was persuading managers not to automatically discount candidates with large gaps in their résumés. "Just because a person’s résumé ends in 2002 doesn’t mean they aren’t a good candidate," Erni says. "We needed to get the women in front of the managers so they could see that."

    Erni decided to create a way for women who had left the workforce to meet with managers in an informal, unintimidating setting. She assembled an advisory board of six women from within and outside Lehman to identify potential participants for such a meeting.

    On November 1, 2005, Lehman held its first Encore event in its 32nd-floor executive dining room. Gregory, who recently had been promoted from chief administrative officer to president of Lehman Bros., welcomed the 75 attendees with a speech about the importance for all employers to think differently about work.

    "He spoke about how with technology, people could get the same work done differently, and that really resonated with the women," Erni says.

    Seeing the president of the company discuss the importance of flexible work arrangements in the global economy spoke to Lehman’s commitment, Hanson says. Gregory tapped Hanson, a managing director and senior advisor to the president, because of her connections to women on Wall Street. She is the founder of 85 Broads, a network of 17,000 women in financial services.

"The fact that this is coming right from the president and is not just an HR initiative really spoke to the women," she says. "It’s a huge morale boost."

    (Hanson, whose group took its name from Goldman’s headquarters at 85 Broad Street in New York, announced in February that she was leaving Lehman after three years to start her own company. Broad Impact will work with firms to recruit and retain women at all stages of life. Lehman has signed on as the company’s first client.)

    Other Encore sessions focused on providing a refresher course to attendees about topics and issues they may have missed while they were out of the workforce, such as regulatory changes and market updates. Another session focused on professional storytelling so the women could talk about their time off in a way that wouldn’t turn off interviewers, Erni says.

    At lunch, the women were seated at tables with the leaders of the divisions they were interested in, Erni says. At the end of the day, all of the attendees were invited to submit their résumés.

    Attendees were also invited to have follow-up meetings with Lehman recruiters to discuss the types of jobs they wanted.

    "They ask what you want to do and tell you that you don’t have to just say one thing," says Robin Scheman, who was recruited through Encore in May 2006 as head of training in Lehman’s investment banking division.

    Scheman, a 14-year Wall Street veteran, was COO of the global real estate division of Deutsche Bank before she resigned to take time off with her two children and try new things.

    "I was really burned out," she says. But after three years and a stint in architecture, Scheman started thinking about going back to work. A friend referred her to Erni, and within months Scheman found herself at Encore, and going through the interview process at Lehman.

    "I was very straightforward that full time was not an option for me," she says. The almost two-hour commute—each way—from her home in Rumson, New Jersey, to Lehman’s headquarters in midtown Manhattan was just too much five days a week. "I said I was willing to do three or four days," she says.

    But Lehman’s recruiters recognized that Scheman, who had a lot of HR experience on Wall Street, would be a valuable asset to the firm, and took their time finding the right fit.

    Scheman went through 14 interviews before landing her current position. While the process was long, in retrospect Scheman says that meeting so many people before joining the company helped establish an instant network of people she knew when she started.

    "For someone just re-entering the workforce, that was very helpful," she says.

    Another woman recruited though Encore, Melissa Eisenstat, who started last August as vice president of Lehman’s equity research division, says it took seven months for Lehman to identify a role for her that she and the company thought was a good fit.

    Hanson says the interview process can take several months because Lehman wants to be sure it gets the right fit and that these women stick around.

    "Lehman doesn’t just want to bring these women on as poster children," she says. "They want them to succeed in these positions. The return on investment on Encore isn’t to brag that they have the program. Lehman wants these people to come back and be rock stars at what they do."

    Lehman has held two Encore sessions in New York and one each in London, Tokyo and Hong Kong. As the program expands, Erni is urging participants to be patient with the process. Getting hiring managers to rethink the way jobs can be structured to facilitate flex-work arrangements can take time, she says.

    "My challenge is to make this a really efficient process and to make sure that women who are on-ramping are patient to find the right opportunities."

Cultural challenges
    Lehman’s focus on retaining and recruiting women has been a work in progress.

    The company first put teeth into the effort in 2004, when it established an incentive program by which all of its 23,000 employees are eligible for a bonus if they demonstrate an effort to reach out to women and minorities. The number of employees who have received these bonuses has doubled each year since its inception.

    Since 2003, the business division heads, along with their HR generalists, are required to put together a business plan on diversity and inclusion. Their plans are then approved by the division’s executive operating committee and, ultimately, by the corporate executive committee.

    Then, in late 2004, Lehman unveiled its flexible work arrangement policy. Under the program, employees could apply to telecommute, work flexible hours, work reduced hours or job-share.

    However, having a policy and getting managers to embrace it are two different things. Even with all her experience, when Scheman started working at Lehman, she was concerned about how people would react to her working three days a week.

    "There was definitely the concern that people were going to consider me a token and not a real contributor," she says. But Scheman says that has not turned out to be the case. "At Lehman, there is real consciousness on the part of management to make work/life balance real," she says.

    To that end, in 2005 Erni had all divisions add a new goal to their business plans: creating opportunities for flexible work arrangements.

    Experts predict that as more men adopt flexible work arrangements, Lehman’s culture will embrace such plans. So far, 21 percent of employees work flexible hours. Half of them are men.

    By putting more emphasis on the quality of work, rather than the hours in the office, Lehman hopes to normalize such arrangements, Erni says. Lehman’s investment banking division is doing an analysis of how its junior associates spend their days. The goal is for them to spend more time on strategic business activities and less on administrative tasks, she says.

    "We are looking at ways that we can reward output versus hours," Erni says.

    Managers are starting to get it, she says. Erni’s office recently got a request from Lehman’s investment banking division for a three-day-a-week job. In the old days, those hiring managers would have found a two-day-a-week position to put together with the three-day position and turned them into one full-time job, she says.

    "People are starting to think about chunking work in different ways," she says.

Workforce Management, April 9, 2007, p. 1, 20-25 -- Subscribe Now!