Financial Services Must Open-up to Improve Diversity in Recruitment
Diversity has gone from a ‘nice-to-have’ to a commercial imperative for the financial services sector, especially given the FCA’s focus on culture and governance. Increased press scrutiny following the #MeToo and President’s Club scandals has helped drive the move.
However, being encouraged to improve diversity and inclusion goes beyond avoiding penalties. Instead, it has a tangible benefit to the bottom-line, promotes much-needed innovation and builds an open culture. Diverse companies have 19% higher revenue compared to less-diverse competitors.
Change is slow
Although the agenda is moving in the right direction, the pace of change is frustratingly slow. The FCA found that the number of females in senior management has increased by only 1.5% in the past decade.
One of the biggest barriers to improving diversity in financial services emerges at the start of the recruitment chain. Attracting new, diverse talent to the sector is a noted challenge that industry leaders mentioned in a recent BrightPool survey.
The FCA will be looking to explore the role of ‘purpose’ and causal links to healthy customer outcomes. Ensuring that the organisation’s purpose is inclusive and protective of the customers it serves will be key. Consequently, there will be an increased focus on hiring talent that is purpose and values-aligned.
Leadership buy-in is crucial
Tackling this begins with leadership. A lack of diversity at senior management level will have a ripple effect across the organisation. People like to recruit, promote and work with others who they relate to. Often, these individuals will have similar socioeconomic, demographic, and academic backgrounds. If a minority recruit feels they don’t stand a chance in the recruitment process they may not even apply. Visible diversity across the organisation is essential, from leadership to interviewers.
BrightPool’s survey found that diversity agendas are stymied when leadership buy-in is lacking. 22% see a lack of prioritisation as an issue, whilst 24% find a lack of senior-level diversity has hindered efforts.
Diversity of thinking, backgrounds and experience drives innovation and creative thinking. By recruiting from a diverse talent pool, organisations benefit from the full experience, opinions and insights of the workforce. Original ideas arise when a range of people gather in the boardroom. Promoting this type of diversity goes beyond recruiting more females or BAME (black and minority ethnic) employees. It calls for people from all races, ages, social backgrounds, education and sexual orientation.
Culture is key
Company culture and diversity and inclusion are two sides of the same coin. By fostering an inclusive culture, organisations create the open environment needed to attract and retain diverse talent. There are many ways to develop this, from reverse mentorships that teach older employees new skills, to disability-first design in workplaces, apprenticeships and scholarships and expanding the recruitment pool beyond the usual universities and job boards.
The future of financial services
Diversity is the future of the industry. The past few years have been marked by financial misconduct, scandal and mis-steps that the FCA has linked to a lack of diversity. In a culture where employees are frightened to speak up, unethical behaviour can spread without challenge.
As BrightPool Managing Director, Jayne Cullen, explains, “The financial services sector has a social responsibility to ensure they are acting ethically and customers do not face harm.
“The FCA has linked misconduct and such harm to a firm’s lack of diversity. But this goes beyond penalties – there are many business benefits to having more culturally and ethnically diverse teams.”
If financial services firms want to remain relevant and fit-for-purpose, they will have to step-up and improve diversity and inclusion across the board. From entry-level recruits to senior leadership.
Cullen adds, “BrightPool represents many industry sectors and a common theme runs throughout: it’s vital for all businesses to have a workforce that represents the customers and society they serve.”
Ready to promote a diverse and inclusive culture in your financial services firm? Contact BrightPool to discover how we can help you get started. To find out more about the BrightPool diversity and inclusion report, click here.