A diverse team is a winning team
Diversity and inclusion (D&I) aren’t just buzzwords. More and more, financial services companies are realizing that proactively recruiting and hiring for diversity yields big dividends in competitiveness and agility. After all, understanding your audience implies a shared experience— i.e. a team that can empathize and embrace different viewpoints than the usual.
For years now, many major banks have been hiring more minorities and women in order to better serve the shifting dynamics of the US population. This is not only happening in standard banking; it also holds true for Financial Services.
Gender roles and generational shifts
In wealthy baby boomer couples, males still generally handle the finances (roughly a 70/30 ratio), with women often taking a backseat in wealth and estate decisions. But with wives being both younger and longer-lived than their husbands on average, a large shift is about to take place: women are expected to control much of the $30 trillion in financial assets of the baby boomer generation by 2030. This represents a sizeable opportunity for financial firms to expand their client base and build trust with the newly expanded female audience. Additionally, younger women are more confident in managing their own financial destinies to begin with, so it’s crucial to include services that cater to their needs and viewpoints as well.
The state of diversity in banking
Despite the progress being made in recent years and a sizeable number of women in banking, this is not true in leadership where women make up only a fraction of C-Suite positions at major institutions (September 2020 marked the first time a woman became a Wall Street CEO).
People of color are even more under-represented in banking, with only 28% of professional positions held by minorities and a tiny number making it to the executive level. Another example are financial advisors, who are still predominantly white and male.
Recruiting for D&I
The old boys’ club won’t disband in a day, obviously, but in order to meet the varied global challenges of the 21st century banks need to address the factors impeding diversity. Changes are happening in junior and senior level recruiting.
Because the traditional educational path to a career in finance often involves elite (low diversity) colleges, some banks are starting to build new talent pipelines by launching internship programs with minority colleges and reaching out to nonprofits dedicated to the advancement of women in banking.
On a more senior level, recruiting for diversity is also possible — and perhaps more urgent. After all, having nontraditional decision makers at the helm can immediately steer a slow-moving ship in a new direction. While the old way of thinking often relies on in-person networking to connect senior talent and potential employer, this can also limit candidates to “who you know.”
A forward-thinking solution might be to rely on an experienced recruiter with a diverse talent pool, who can contribute valuable advice and find the ideal candidate among a varied, multifaceted cohort.
Hiring for fit, not group think
Company culture is an important, yet nebulous concept that means different things to different people. Ultimately, employee and employer need to understand each other in a way that increases collaboration and yields positive results. It’s important not to think too narrowly about cultural fit, though, as certain candidates may appear as an imperfect puzzle piece but contribute a broader – and ultimately more successful – perspective.