Diversity in financial services is topical to this day, even after a good few years of being in the spotlight (and rightly so). I discuss DE&I with my clients regularly, and we’re still finding ways of navigating this landscape.
When I came across the tweet below recently, it really got me thinking. For all the work my clients and other financial services organisations do, is diversity really improving that much at the very top? Take a look at your own organisation - is it like this?
While this might be ‘just’ a Reddit meme, it does have serious significance. If the majority of people recognise this as the truth, it means we’re still not doing enough.
Let’s be honest, financial services has been a white man’s club for centuries. It’s going to take a lot of work to break that tradition, but progress is being made. For example, 20% of employees in fintech are Black, Asian or from another underrepresented group. And less than 1 in 10 management roles in financial services are held by people from an ethnic minority. That compares with the figure of 11.8% for the total UK labour market.
Additionally, women now make up 43% of the financial services workforce.
Those figures sound promising, even laudable given the industry we’re in - until you look a little closer. Just like the meme, diversity is predominantly taking place on the bottom rungs of the ladder.
While women might make up 43% of the FS workforce, they only represent 20% of major financial services executive committees, and only 15% of FDs in FTSE 100 companies are women.
The negative impact of a lack of diversity
This lack of diversity at the top has serious implications on the majority of your workforce (and those implications can even extend to your customer base).
According to reboot’s Race to Equality: UK Financial Services Report, “With so few role models in senior positions and challenging workplace cultures, it’s difficult for those from different backgrounds to break into the industry, let alone do well.”
When there’s a lack of diversity at the top, you don’t get the range of perspectives, opinions and experience that make a company successful. There’s an oft-cited report from Credit Suisse that having a greater proportion of women at senior management level is correlated with better returns and profitability.
A lack of equality can also lead to workplace discrimination. The Race to Equality report also reveals that 48% of people from ethnic minorities rate their career progression as lower than their white peers, and one in three black people, 30% of Asian people and 29% of people of mixed ethnicity have experienced racial discrimination that has prevented them from meeting career expectations.
Diverse leadership is known to improve employee engagement and satisfaction. Seeing yourself and your background represented in leadership is more inspiring, motivating and fulfilling. In turn, this is invaluable for proactively constructing diverse succession pipelines and baking diversity into your business.
How does your FS firm compare to your competitors?
But what does all this mean for your organisation specifically? It’s so important to know where you stand in your diversity, equity and inclusion journey - and it’s equally important to know where your competitors stand, too.
I don’t believe that anyone, anywhere, in any industry is ticking all the DE&I boxes. There are, of course, a lot of organisations that are doing things really well - but do you know how you compare to them? What are they doing that you aren’t? What could you be doing to set your organisation apart and be a DE&I leader?
Understanding your competitor landscape in terms of DE&I will show you areas for improvement, what you could be doing differently - and what not to do.
To achieve the same levels of growth and success that you have experienced up to this point, you need to build teams that are as multifaceted and layered as the future obstacles you’re likely to encounter. DE&I is as much about unlocking potential and power as it is about creating a better world for future generations.
If you’d like to have a chat about how I can work with you on a DE&I competitor analysis, show you where your gaps are and how you can fill them, contact our Hanover team and set up a meeting with one our expert consultants.
