Diversity and percentage points: A case for improving participation
Research conducted by Morgan Stanley has concluded that employing more women brings a stock market boost - annual returns for businesses that employ the highest proportion of women were 2.8 percentage points above those for the least diverse firms.
The methodology employed saw Morgan Stanley researchers analyse the hierarchy of almost 2,000 companies listed on the MSCI World index.
This survey concluded that a percentage point was a global occurrence, even after adjusting for variables such as size, yield, profitability and risk, diverse companies still outperformed non-diverse peers.
If we apply this result in conjunction to the analysis in the recently published report on “Data Science in the New Economy – A new race for talent in the Fourth Industrial Revolution” by the World Economic Forum, we find we enter a very competitive landscape for talent acquisition.
One microcosm worth exploring is the role of data scientists. These roles and skillsets contribute a small portion of the workforce, but recent data indicates that these are some of the highest in demand roles in the labour market. This is further complicated by traditional silos being eroded as Data Scientists are increasingly sought out by the Financial and Professional Services sectors, which now find themselves competing with classical competitors such as technology and media companies for an ever-diminishing pool of quality candidates.
Limiting our parameters to the following information available through Linkedin:
• Job Title: Data Scientist
• Location: Dublin, Ireland
We are given the following results of 327 candidates, with 69 Candidates (21%) being female, a trend that rises by an additional 1% when we factor into account 15+ years of experience.
This 22% of candidates with 15+ years of experience falls short of the desired target of 25% by the Balance for Better Business initiative 2023 goal for representation. Though not an absolute, it does serve to highlight an area where multiple stakeholders from the Government, 3rd Level Institutions and employers need to do better to drive diversity in firms and professions.
The financial services industry cannot afford to take a complacent attitude towards these trends, as a proactive approach is required to properly recruit and retain these highly sought-after individuals to benefit from the potential gains. In parallel to this, decision-makers must acknowledge that these individuals will become the leaders of tomorrow and offer training and resources that allow them to flourish outside of their existing skillsets.
Synergy of purpose by all stakeholders will be required to recruit, develop and retain these individuals in this increasingly science-led future.
James Sweeney is an associate in our Dublin office. In his role with Hanover, James brings his business and political science acumen as well as his political research background to bear in undertaking bespoke executive searches across the financial and professional services sector in Ireland.