Diversity and inclusion are a key issue for the financial services sector. Not only does getting it right positively impact the bottom line, but it affects the perception of our industry, which is vital given our need to attract talent.
McKinsey’s 2018 Delivering Through Diversity report found companies in the top 25 per cent for ethnic diversity were 33 per cent more likely to achieve above-average industry profits, and those in the top 25 per cent for gender diversity were 21 per cent more likely to. Other research backs this up.
Randstad’s 2018 Paying Attention report found the economy would be £24bn larger if those from black, Asian and minority ethnic backgrounds progressed in their careers at the same rate as white counterparts. It also highlights that men still hold more senior roles and earn around 9.4 per cent more than women. In 2016, Virgin Money chief executive Jayne-Anne Gadhia was asked to lead a government review of women in senior management roles. It found that more women were starting out in financial services than men but, as their careers developed, many left the industry, leaving the senior positions in male hands.
Responding to this, the Treasury launched the Women in Finance Charter as “a pledge for gender balance across financial services”.
Signatories agree to promote gender diversity by having at least one executive responsible for gender diversity and inclusion, setting targets for such actions, publishing progress annually against targets, and having the intention that the pay of executives is linked to the delivery of targets.
At our inaugural Wealth of Diversity conference last month, senior industry figures addressed the need for a more inclusive workforce. Economic secretary to the Treasury John Glen emphasised the government’s commitment to these issues and pointed to research that showed improving gender parity within the workplace could add £150bn to UK GDP by 2025.
FCA chief executive Andrew Bailey also underlined the regulator’s focus on culture and that firms’ approach to diversity and inclusion was a key part of that.
Research shows millennials want to work for diverse organisations and this, coupled with evidence that more inclusive management structures contribute positively to company profitability, indicates a clear direction of travel for the future.
But there is undoubtedly more to be done. We are actively working to help shift perceptions by highlighting the facts of the situation, so the industry can move beyond seeing gender parity and wider diversity issues as a tick-box exercise, and instead view them as a valuable resource, a strategic advantage and an economic boon.
I recently heard someone say that “diversity is being invited to the party; inclusion is being invited to dance”.
That is truly taking it beyond the tick-box exercise and maximising the business benefit.
Liz Field is chief executive at Pimfa