Description
Next week you will analyze the organization’s culture. This week you will gather information and resources that will enable you to analyze and recommend changes to improve the organization’s culture.
Preparation
Access your chosen organization’s annual reports. These can often be found on company websites, Business Source Complete located in the Wk 5 University Library, or professional organizations’ websites. I Attached the reading. Find a dependable organization to talk about.
Assignment Deliverable
Create a 350- to 525-word outline in which you provide the following information about your chosen organization:
Demographics
What are the organization’s current employee demographics (e.g., age, gender, ethnicity)?
What was a recent change that affected a large group of employees or the organizational culture?
How did the company handle it?
Was the change handled ethically? If it wasn’t handled ethically, how should they have handled it? If it was handled ethically, what stands out as something to emulate in your future business endeavors?
Technology
How does the company utilize technology in day-to-day business?
What types of technology are used?
How does a change of technology affect the organization?
Cite sources to support your assignment.
Format your citations and references according to APA guidelines.
Submit your assignment.
Unformatted Attachment Preview
Diversity Continues to Challenge the
Financial Services Industry: Benefits,
Financial Performance, Demographics,
Impediments to Progress, and Best Practices
by James J. Tucker III, PhD, CPA
Scott Jones, PhD
Introduction
PricewaterhouseCoopers (PwC) global survey of 410 financial services CEOs found
that an overwhelming majority recognize
the importance and value of diversity in enhancing
business performance, strengthening customer satisfaction, and fostering innovation.1 The ongoing efforts and commitments of resources by U.S. financial
service firms to achieve a diverse workforce are well
established. For example, the diversity policy of Prudential Financial, Inc. includes the following:
At Prudential, we strongly believe that talent
comes in every color, gender, origin, religion, sexual orientation, and physical capability imaginable.
For this reason, we actively seek out employees,
vendors, and business associates from a deep and
diverse pool of accomplished professionals….2
One of Prudential’s diversity initiatives includes
employee networks, called Business Resource Groups
(BRGs). BRGs promote individual professional development, while helping the company achieve its
business objectives. Open to all employees, these networks address issues common to a variety of audiences. Started in 1993, these BRGs include:
• Abled & Disabled Associates Partnering Together
• Asian/Pacific Islander American Association
• Black Leadership Forum
• Employee Association of Gay Men, Lesbians, Bisexuals & Transgenders
A
ABSTRACT
Financial service firms continue to invest
substantial resources in diversity-related
efforts to achieve a more diverse workforce.
Nevertheless, progress has been slow, and
gains have been marginal. This study examines recent progress of the financial services
industry regarding diversity and a number
of related issues through which firms must
navigate and manage. These issues include
the benefits of a diverse workforce, financial
performance, recruiting and retention challenges and best practices, the benefits of analyzing firm-specific employee demographic
data, and the conflicting views surrounding
the decision to publicly disclose this data.
Vol. 73, No. 1 | pp. 56-71
This issue of the Journal went to press in December 2018.
Copyright © 2019, Society of Financial Service Professionals.
All rights reserved.
JOURNAL OF FINANCIAL SERVICE PROFESSIONALS | JANUARY 2019
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Diversity Continues to Challenge the Financial Services Industry:
Benefits, Financial Performance, Demographics, Impediments to Progress, and Best Practices
James J. Tucker III and Scott Jones
Purpose and Organization of the Study
• Hispanic Heritage Network
• Prudential Military Veteran’s Network 3
Citigroup’s Talent and Diversity Annual Report
2017 states that Citigroup is “…committed to being
a truly diverse company where employees come to
work every day at a place that recognizes and celebrates our diverse backgrounds and experiences. To
this end, we are setting representation goals around
diversity, and our leaders are being held accountable
for continued progress towards these goals.”4
Citigroup’s many diversity initiatives include unconscious bias training, specifically targeted diversity
recruiting, and 150 employee network chapters that
serve and support ten different demographic employee affinity groups.5
Institutional investors also stressed the importance of diversity. Blackrock, Inc.’s influential chairman and CEO Larry Fink oversees the management
of $6.1 trillion in funds. Fink’s 2017 annual letter
to CEOs recently was the focus of much media attention, as he called for corporations to place greater
emphasis on social responsibility including diversity.
The letter states:
…We also will continue to emphasize the importance of a diverse board. Boards with a diverse
mix of genders, ethnicities, career experiences,
and ways of thinking have, as a result, a more diverse and aware mindset. They are less likely to
succumb to groupthink or miss new threats to a
company’s business model. And they are better
able to identify opportunities that promote longterm growth… . Companies must ask themselves:
Are we working to create a diverse workforce?6
Another influential institutional investor, The
Vanguard Group, Inc., recently stated in its Investment Stewardship 2017 Annual Report:
Companies should be prepared to discuss…their
plans to incorporate appropriate diversity over
time in their board composition. While we believe
that board evolution is a process, not an event, the
demonstration of meaningful progress over time will
inform our engagement and voting going forward.7
The purpose of this study is to review the progress
of the U.S. financial services industry in increasing
workforce diversity and to examine a number of diversity-related issues through which firms must navigate and manage. Specifically, this study examines:
• key definitions, research methodology, and the
sources of data and statistics
• benefits of a diverse workforce
• financial performance of firms with diverse leadership
• industry- and sector-wide employee demographics with a focus on diversity
• recruitment and retention challenges faced by firms
• best practices used to address these challenges
• benefits of analyzing company-specific employee
demographic data
• issues surrounding the decision to publish firm-specific demographic data
• examples of published firm-specific demographic data
Data and Statistics—Key Definitions—
Research Methods
The underlying source of data and statistics in
this study was provided by the Equal Employment
Opportunity Commission (EEOC).8 The EEOC requires private employers with 100 or more employees,
and all federal contractors with 50 or more employees,
to submit data on racial/ethnic and gender characteristics. Most of the data and statistics used in this study
were first published by the EEOC and later analyzed
by the Government Accountability Office (GAO) to
prepare a report entitled “Financial Services Industry—Trends in Management Representation of Minorities and Women and Diversity, 2007–2015.” The
report was prepared for Congress regarding the efforts
of the financial services industry to increase workforce
diversity. A number of GAO’s charts and figures appear in this study in their original form or in formats
reconfigured by the authors as referenced. Several
GAO graphs and charts also include data from the
Department of Education Integrated Postsecondary
JOURNAL OF FINANCIAL SERVICE PROFESSIONALS | JANUARY 2019
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Diversity Continues to Challenge the Financial Services Industry:
Benefits, Financial Performance, Demographics, Impediments to Progress, and Best Practices
James J. Tucker III and Scott Jones
Education Data System.9 EEOC data show the financial services industry employed 3.28 million people
in 2017 and 3.41 million in 2015—a 3.96 percent increase for the 9-year period. The EEOC classification
system for the financial services industry includes the
following five sectors:
• insurance carriers and related activities including
carriers and insurance agents that provide protection against financial risks to policyholders in
exchange for the payment of premiums
• credit intermediation and related activities including deposit credit institutions—commercial
banks, thrifts, credit unions, nondepository credit institutions, and mortgage bankers and brokers
• funds, trusts, and other financial vehicles including investment trusts, investment companies,
and holding companies
• securities, commodity contracts, and other financial investments composed of a variety of firms
and organizations that bring together buyers and
sellers of securities and commodities, manage in-
vestments, and offer financial advice
• monetary authorities including central banks10
The GAO report includes a category “management-level positions” defined as “senior-level managers”
and “first- and midlevel managers.” Senior-level managers include CEOs, CFOs, and managing partners.
The first- and midlevel management category includes
(1)middle managers that report to senior managers and
typically lead major business units, and (2)managers
who report to middle managers and oversee day-today operations, such as a team or branch managers.11
Minority representation is divided into four categories: African-American, Asian,12 Hispanic, and Other
that includes Native Hawaiian, Pacific Islander, Native
American or Native Alaskan, and two or more races.13
Research efforts of the GAO included interviews
with representatives from three financial service firms
regarding the preferred educational requirements
needed to enter the field. The GAO also interviewed
representatives from 13 financial service firms that
were actively involved in workforce diversity, attend-
FIGURE 1
The Benefits of Diversity
Having a strategy to promote diversity and inclusion helps financial service organizations
100
90
80
Percentage
70
60
50
40
30
20
10
0
Attract
Talent
Enhance
Business
Performance
Strengthen
Our Brand
and
Reputation
Innovate
Enhance
Customer
Satisfaction
Collaborate
Internally/
Externally
Serve New
And Evolving
Customer
Needs
Source: PwC 18th Annual Global CEO Survey—Key talent findings in the financial services sector.
Findings are based on interviews with 410 financial services CEOs in 62 countries.
JOURNAL OF FINANCIAL SERVICE PROFESSIONALS | JANUARY 2019
58
Leverage
Technology
Compete in
New Industries/
Geographies
Diversity Continues to Challenge the Financial Services Industry:
Benefits, Financial Performance, Demographics, Impediments to Progress, and Best Practices
James J. Tucker III and Scott Jones
ed a conference on diversity in the financial services
industry, and interviewed representatives of organizations that advocate for women and minorities.14 Statements and observations made during these interviews
appear throughout the study as referenced. Since these
representatives and advocates are actively involved in
diversity efforts, their statements and observations may
not be representative of all financial services CEOs,
some of whom are not actively involved in diversity
efforts. In addition, the authors examined a number of
social responsibility reports as well as research studies
that examined the relationship of diversity and financial performance and innovation.
looking for a broader range of skills when recruiting than
in the past. Financial service CEOs now increasingly look
to their diversity strategy to acquire the talent needed to
grapple with numerous challenges; these include the rapid
digital transformation of business processes, more complex regulation, changing customer expectations, and
opportunities to participate in emerging international
markets.15 A recent PwC report noted:
Indeed, diversity doesn’t just broaden the talent
pool, it also creates a positive impression of the
organization that is attractive to people from all
sections of the population—90 percent of financial services CEOs who have a strategy to promote
diversity believe it helps them to attract talent.16
It is no surprise that firms’ strategic efforts to
achieve a diverse workforce have moved up the boardroom agenda. As Figure 1 highlights, 75 percent or
more of financial services CEOs who have adopted
a strategy to promote diversity believe it is helping
them to enhance collaboration, innovation, and customer satisfaction; strengthen brand, reputation, and
Research on the Potential Benefits of
Workforce Diversity
Many financial services organizations had seen diversity efforts primarily as a way to broaden brand recognition and reputation in prior years, but now many CEOs
view diversity as a key way to bridge skill gaps. Eighty
percent of financial service CEOs recently surveyed are
FIGURE 2
Specific Races/Ethnicities in Management Positions
in the Financial Services Industry, 2007 and 2015
FIGURE 3
Minorities in First- and Midlevel Management
and Senior-Level Management Positions in the
Financial Services Industry, 2007 and 2015
Percentage of Management by Level
Percentage of Management
9
8
7
6
5
4
3
2
1
0
2007*
2015**
■ Other ■ Asian ■ Hispanic ■ African American
25
20
15
10
5
0
2007
2015
■ Minority senior level
(total in 2007 = 10.6; total in 2015 = 12.3)
■ Minority first- and midlevel
(total in 2007 = 18.7; total in 2015 = 22.4)
*Total percentage of minorities in 2007 = 17.3.
**Total percentage of minorities in 2015 = 21.
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Diversity Continues to Challenge the Financial Services Industry:
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James J. Tucker III and Scott Jones
overall business performance.17, 18
Other potential benefits of workforce diversity
and diversity-linked corporate social-impact initiatives include:
• improved quality of decision making—less likely
to succumb to “groupthink”
• financial performance—greater employee engagement levels that have been shown to yield year-overyear increases in net income and earnings per share
• risk mitigation—proactively address diversity and
other social issues to reduce the risk of regulatory
actions and negative consumer reactions
• innovation—a diverse management is more likely to identify the needs of underserved populations, enabling firms to explore new business
models and technologies
• access to financing—firms with strong social
purpose have increased access to capital
• customer relatability—workforce diversity helps
the firm better understand and relate to diverse
customers; firms should look like their customers
• potential client inquiries—ability to present a
diverse workforce when potential clients inquire
about racial and gender diversity (e.g., institutional investors)19
Research on Workforce Diversity and
Financial Performance
The GAO indicates that research on the role of
diversity in financial performance is not conclusive.20
Such a conclusion is similarly found in other published
studies, but some studies add additional evidence indicating that diversity does play a role in financial performance in certain situations, specifically involving
innovation and local adaptation strategies.
Roberson et al. examined diversity-related research
studies and concluded that there is consistent evidence
that gender and racial diversity at the board level is related to firm performance, and that the specific influence of diversity is dependent on the strategic context
the firm operates within. Some studies suggest there is
an interaction between the need to innovate and diversity, citing that banks with innovation-oriented strategies
show performance is enhanced by diversity. Evidence
Percentage of Management by Level
FIGURE 4
Specific Races/Ethnicities at Various Management Levels in the
Financial Services Industry, 2007 and 2015
9
8
7
6
5
4
3
2
1
0
2015
2007
Minority first- and midlevel
2007
2015
Minority senior-level
■ Other ■ Asian ■ Hispanic ■ African American
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Diversity Continues to Challenge the Financial Services Industry:
Benefits, Financial Performance, Demographics, Impediments to Progress, and Best Practices
James J. Tucker III and Scott Jones
also suggests the role of innovation extends beyond the
boardroom. Banks with high and low diversity across
managerial levels is consistent with enhanced performance for innovation-focused strategies.21
A study of the financial services industry by Lins
et al. showed that more socially responsible firms fared
better during the 2008–2009 crisis than those with
low scores on social responsibility during the crisis,
and that the difference was not attributed to either
financial strength or corporate governance variables.
The rationale is that there is an added element of trust
accruing to socially responsible firms during periods
of low trust of business organizations in general. The
study confirmed this relationship by looking at both
internally and externally focused management social
responsibility policies. Both internal policies (Employee Relations and Diversity) and external policies
(Community, Human Rights, and Environment) were
important in explaining better-than-average financial
performance during the 2008–2009 crisis.22
A comprehensive report by McKinsey and Company concludes that there is a statistically significant
relationship between diverse leadership and financial
performance.23 Inclusion and diversity initiatives improve performance because they:
• make it easier for companies to attract top talent
• improve quality of decision making
• increase innovation and insight
• increase employee satisfaction
• increase image
The McKinsey and Company report probably
best sums up the relationship between diversity and
financial performance. The company attributes the
relationship to a firm’s ability to link inclusion and
diversity initiatives to strategic goals and the ability
to adapt to local opportunities.24
A 2018 study surveyed more than 1,700 companies across eight countries in a variety of industries and
company sizes. The study focused on diversity in management positions and found that the most diverse enterprises were also the most innovative, as measured by
the freshness of their revenue mix. In fact, companies
with above-average total diversity (measured as the
average of the six dimensions of diversity: migration,
industry, career path, gender, education, and age) had
both 19 percent higher innovation revenues and 9 percent higher earnings before interest and taxes (EBIT),
on average. After examining the six dimensions of diversity used in the study and firm performance, the
authors concluded that a broad-based approach to diversity that values multiple aspects of diversity is most
beneficial in terms of innovation outcomes.25
Overall, there appears to be a consistent body of
evidence that supports the contention that better financial performance is associated with firms that take
a strategic approach to achieving diversity and leveraging diversity in decision making. Merely hiring for
the sake of diversity is not associated with increased
performance. Perhaps investors are thus sufficiently
justified to call for diversity, and in fulfilling that call,
companies follow through with strategic purpose. Given the benefits that may be realized in the financial
services sector by strategically focusing on diversity, it
is surprising that post-financial crisis diversity is only
FIGURE 5
Minority and White Women and Men in
Management Positions in the Financial Services
Industry, 2007 and 2015
Percentage of Management
50
40
30
20
10
0
2007
2015
■ Minority Women ■ White Women
■ Minority Men ■ White Men
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Diversity Continues to Challenge the Financial Services Industry:
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James J. Tucker III and Scott Jones
marginally improved. In the next section, employee
demographic trends are discussed in more detail.
agement-level positions in the financial services industry increased from 17.3 percent to 21.0 percent—a total
increase of 3.7 percent for an average annual increase
of 0.41 percent. Management-level representation of
minorities increased for Asians 2.3 percent, Other 0.8
percent, and Hispanics 0.7 percent. African-American
representation decreased 0.2 percent.28
To better distinguish minority representation
in senior-level management from first- and midlevel
management, Figure 3 is presented. From 2007 to
2015, minority, senior-level representation increased
from 10.6 percent to 12.3 percent—a total increase of
1.7 percent for an average annual increase of 0.18 percent. First- and midlevel management representation
increased from 18.7 percent to 22.4 percent—a total
increase of 3.7 percent, for an average annual increase
of 0.41 percent.29
Figure 4 reveals that representation of minorities in senior-level management positions increased
0.9 percent for Asians, 0.6 percent for Other, and
0.6 percent for Hispanics. African-American representation decreased 0.4 percent. Representation in
first- and midlevel management positions increased
Employee Demographics in the
Financial Services Industry—Progress
Report 2007–2015
In 2010, the GAO reported “…Diversity in management in the financial services industry did not
change substantially from 1993 to 2008, and diversity in senior positions was limited.”26 To provide an
update on the industry’s progress, the analysis below
examines changes in employee demographics in the
financial services industry during the 9-year period
from 2007–2015. In 2007, the U.S. minority population was 62.85 million or 20.9 percent of the total U.S.
population. In 2015, the U.S. minority population was
73.63 million or 22.9 percent of the total U.S. population—a 2 percent increase over the 9-year period.27
Representation of
Minorities in Management
Figure 2 reveals that over the 9-year period from
2007–2015, the total percentage of minority-held, man-
FIGURE 6
Minority and White Women and Men in Various Management Positions in the Financial Services Industry, 2007 and 2015
Percentage of Management
70
60
50
40
30
20
10
0
2015
2007
2007
First- and midlevel management
■ White Men
2015
Senior-level management
■ White Women
■ Minority Men
■ Minority Women
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Diversity Continues to Challenge the Financial Services Industry:
Benefits, Financial Performance, Demographics, Impediments to Progress, and Best Practices
James J. Tucker III and Scott Jones
for Asians 2.6 percent, Other 0.9 percent, and Hispanics 0.7 percent. African-American representation
decreased 0.3 percent.30
sectors from 2007 to 2015. Banks and other credit
institutions had the greatest overall level of minority representation during the 9-year period presented.
Funds and trusts experienced the largest percentage
point increase (4.3 percent); the banks and other
credit institutions had the lowest percentage point
increase (3.1 percent).
Management-Level Representation of
Women and Men
Figure 5 provides insight into the representation of women and men. Minority women increased
management-level representation by 1.5 percent (9.2
percent to 10.7 percent), while white women experienced a 1.5 percent decrease (35.9 percent to 34.4
percent). Minority men increased representation by
2.2 percent (8.1 percent to 10.3 percent); white men
experienced a 2.3 percent decrease (46.8 percent to
44.5 percent). However, the total representation of all
women (45.1 percent) and all men (54.9 percent) was
unchanged from 2007 to 2015.31
Comparison of Women and
Minority Representation in Financial
Services Firms of a Different Size
Figure 8 indicates that the larger the firm (as
measured by number of employees), the greater the
representation of minorities from 2007 to 2015. Research studies suggest that larger firms have greater
resources to address workforce diversity and have
incentives to increase diversity to comply with legal
obligations.34 However, representation of all women
was nearly equal in firms of different sizes, averaging
45.2 percent of management-level positions during
this period (Figure 9).35
Trends in First- and Midlevel
Management and Senior-Level
Management
The representation of minorities and white
women and men in senior-level and first- and midlevel management is presented in Figure 6. Over
the 9-year period ending in 2015, representation by
white men and white women in first- and midlevel
management decreased 1.8 percent and 2.0 percent
respectively. During this same period, representation by minority men increased 2.2 percent, while
minority women increased 1.6 percent. Regarding
representation in senior-level management, white
men and white women each decreased by 0.9 percent; minority men increased 1.5 percent, and minority women increased 0.3 percent.32
FIGURE 7
Minorities in Management Positions Within the
Financial Services Industry, 2007 and 2015
Percentage of Management
25
Representation of Minorities in
Four Sectors within the
Financial Services Industry
20
15
10
5
0
Management-level minority representation in
each of four sectors within the financial services industry is presented in Figure 7.33 Minority representation in the industry increased in each of the four
2007
2015
■ Banks and other credit institutions
■ Securities and other activities
■ Insurance
■ Funds and trusts
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Diversity Continues to Challenge the Financial Services Industry:
Benefits, Financial Performance, Demographics, Impediments to Progress, and Best Practices
James J. Tucker III and Scott Jones
Comparison of Representation of
Minorities and Women in the Financial
Services Sector, Professional Services
Sector, and the Overall Private Sector
graduate degrees as compared to minority men. As noted earlier, minority women occupied slightly more management-level positions as compared to minority men.
However, the gap between minority men and minority
women earning college degrees is much wider than the
gap between minority men and minority women holding management-level positions in the financial services
industry (Figure 5). Although minority men earn significantly fewer degrees, they hold about the same number of management-level positions.39
The largest source of potential talent by those earning degrees is women. Well over half of all bachelor’s and
master’s degrees and about 45 percent of MBA degrees
were earned by women (Figure 14); in 2015, women held
about 45.1 percent of management-level positions (Figure 5). The percentage of undergraduate and graduate
degrees earned by all women was generally unchanged
during the period from 2011 to 2015 (Figure 14).40
Figure 10 presents a comparison of minority representation in three different sectors to provide a broader
perspective on trends in diversity. A visual review of Figure 10 reveals a similar pattern in the relative ratios of
senior-level positions to first- and midlevel positions in
each sector. From 2007 to 2015, all three sectors experienced increases for minorities in both senior-level and
first- and midlevel positions. In 2015, the professional
services sector had the highest minority representation
in both management-level categories, followed by the
overall private sector and the financial services sector.36
Although representation of minorities in the financial services sector was slightly less than the other
two sectors, Figure 11 reveals that representation of all
women was significantly higher in the financial services sector as compared to the other two sectors, especially for first- and midlevel management positions.37
Recruiting a Diverse Workforce
Recruitment Challenges
Recruitment of Women and Minorities:
Potential Talent Pools, Recruiting
Challenges, and Best Practices
Approximately 70 percent of financial service
CEOs now see the limited availability of key skills
FIGURE 8
Minorities in Management Positions in Financial
Services Firms of Different Sizes, 2007 and 2015
Talent Pools for Recruitment
Students earning an undergraduate or graduate degree are an important external talent pool of
potential employees. Representatives from financial
service firms stated that although the MBA degree is
still highly desirable, recruiters have broadened their
focus to seek students with a variety of degrees. Although approximately one-third of those completing
an undergraduate or graduate degree were minorities
from 2011 to 2015 (Figure 12), only 17.3 percent
(2007) to 21 percent (2015) of management-level positions were held by minorities (Figure 2).38
The talent pool of minority men and women earning undergraduate and graduate degrees increased from
2011 to 2015 (Figure 13). Minority women earned a significantly greater percentage of both undergraduate and
Percentage of Management
25
20
15
10
5
0
100-249
■ 2007
250-999
■ 2015
JOURNAL OF FINANCIAL SERVICE PROFESSIONALS | JANUARY 2019
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1000-4999
5000+
Diversity Continues to Challenge the Financial Services Industry:
Benefits, Financial Performance, Demographics, Impediments to Progress, and Best Practices
James J. Tucker III and Scott Jones
and diverse, hybrid types of talent as a threat to their
growth prospects.41 Representatives from financial
service firms and industry representatives described
a number of issues and challenges to recruiting a diverse workforce. Some challenges identified in prior
research still persist, including negative perceptions
of the industry and lack of awareness of career paths
in the industry. Other challenges identified include
strong competition for diverse talent from within
the industry and with other industries, lack of visible
support from top management, reluctance to recruit
from a broad group of colleges, and the perception of
the industry as male-dominated (Table 1).42
that they were now recruiting from a broader base of
schools, rather than a select few. Most firm representatives stated that an effective recruitment strategy was to
FIGURE 9
Women in Management Positions in Financial
Services Firms of Different Sizes, 2007 and 2015
Percentage of Management
50
Recruiting Best Practices
Firm and industry representatives stated that they
are increasingly hiring students from a variety of academic backgrounds, including arts and sciences and
technology. One firm representative explained that she
was interested in candidates with critical thinking skills,
and that required technology skills could be taught as
a part of employee training. Also, several firms noted
40
30
20
10
0
100-249
■ 2007
250-999 1000-4999
■ 2015
Percentage of Management by Level
FIGURE 10
Minorities in Various Management Positions in the Financial Services Sector, Professional Services Sector,
and the Overall Private Sector, 2007 and 2015
30
25
20
15
10
5
0
2015
2007
Financial Services Sector
2015
2007
Professional Services Sector
2015
2007
Overall Private Sector
■ Senior-level ■ First- and midlevel
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5000+
Diversity Continues to Challenge the Financial Services Industry:
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James J. Tucker III and Scott Jones
establish relationships with student organizations that
represent diverse groups. To recruit women and minorities who have already earned college degrees, some firms
establish relationships with professional organizations
that represent women and minorities. Several firms and
industry representatives stated that firms should intentionally seek out and recruit diverse candidates.43 For
example, CitiGroup, Inc. is committed to interview at
least one woman or racial/ethnic minority when hiring
managing directors and directors. In 2017, 71 percent
of interviews for these Citigroup positions in the U.S.
included at least one diverse candidate.44
Retention of Women and Minorities:
Challenges and Best Practices
corroborated by two minority, former employees of large
financial services firms who stated that there were fewer
mentors and role models in organizations that have few
women and minorities in leadership positions.46 Many
of the biases that hold women and minority groups back
are unconscious. There may be a tendency among senior
managers to hire or promote people like themselves or
people who have similar lifestyles.47 Unconscious bias in
promotions can negatively impact women and minorities, resulting in greater turnover. Unconscious bias may
also be triggered by the perception that women will put
family first, or positions requiring long hours will not
suit women. Several firms commented that employee
resistance, particularly from middle-managers, poses a
challenge to diversity and inclusion efforts.48
Retention Challenges
Retention Best Practices
Financial services firms and industry representatives
discussed a number of challenges to retaining women,
and they agreed that it is difficult to retain women and
minorities if representation of women and minorities is
lacking in management positions (Table 2). This view was
The diversity management practice of establishing a firm-wide network of different demographic
employee affinity groups to support and promote
individual professional development was strongly endorsed by individual firms and industry representa-
Percentage of Management by Level
FIGURE 11
Women in Various Management Positions in the Financial Services Sector, Professional Services Sector,
and the Overall Private Sector, 2007 and 2015
50
40
30
20
10
0
2015
2007
Financial Services Sector
2015
2007
Professional Services Sector
2015
2007
Overall Private Sector
■ Senior-level ■
