The reboot. FS Race to Equality Index, which assesses D&I levels across the financial services industry and creates a scorecard for each sector, shows that there is still a long way to go to achieve real inclusion, say Anoosha Livani and Brandon Bhatti.
Racial discrimination is a significant issue in the UK workplace. This is a fact across all sectors and not just financial services. However, the UK’s financial services industry has long held a reputation for being something of an exclusive club. Given that it is the country’s biggest export; it is a sector that needs to lead by example.
Financial services employees earn 29% more than the rest of the UK on average and that is before bonuses. Because there are so few role models in senior positions and challenging workplace cultures, it is difficult for those from different backgrounds to break into the industry.
Whilst many want this to change, not everyone knows how to confront these issues – let alone solve them. Our approach at reboot. - a network of senior financial services professionals working together to maintain the dialogue on race and racial inequality in the workplace – is to start by measuring the scale of the problem.
Last year we launched our inaugural Race to Equality report in partnership with research house Coleman Parkes, surveying 800 employees from 440 UK financial services organisations. It was important to get a better feel for how UK financial services employees were feeling against the backdrop of all the diversity and ESG related news which continues to dominate the media agenda.
The findings were sobering. We found that while we are having more encouraging conversations on the uncomfortable topic that is race, we still have a significant way to go in terms of embedding policies and creating an authentic inclusive culture for all groups. As an example, our report found that:
- Two thirds (66%) of ethnic minority respondents in financial services have experienced discrimination at their organisation, as a result of their background
- Only one third (36%) of respondents believe their companies are ‘fully committed’ to enhancing diversity and inclusion
- Almost half (48%) of ethnic minority respondents believe their career progression is slower than that of their white colleagues
While some of these statistics are surprising and potentially even discouraging, the report’s intention is not to spread doom and gloom. Instead, the breadth of our research has allowed us to put in place a tool that is far more important – the reboot. FS Race to Equality Index, which assesses D&I levels across the financial services industry and creates a scorecard for each sector.
The target score for companies is 100 – at which point their workplace could be described as optimal across D&I criteria. However, with the average industry score sitting at 65 there is clearly still much work to be done. We also analysed the data split by sub-sectors within financial services, with each of them scoring 66 or less - almost identical rankings across the board.
With a lack of data on race and ethnicity across the industry, the reboot. FS Race to Equality Index seeks to act as a measure for progress on D&I across financial services on an annual basis – an important step to monitor the strides the financial services industry is making to create more diverse and inclusive workplaces.
How to improve?
The Index clearly reveals that significant improvements are needed to build a workplace culture that fosters a true sense of inclusion and ensures there are no barriers to opportunity for ethnic minorities. To help organisations on their journey towards a more equal workplace, we have also developed the following five-point-plan for the financial services industry.
- Listen to [all] your employees: Only a quarter of firms consult with ethnic minority employees on how to tackle D&I issues pertaining to race. With a clear lack of diversity at senior levels across the industry, this means decisions are often made by those with limited experience of the challenges minority groups face.
- Update and evolve training programmes: Both provision and take up of diversity and inclusion training for employees at all levels remains low. Companies need to invest more in upskilling and educating employees at every stage of their careers.
- Develop role models through senior business sponsors: Many ethnic minority respondents said visible senior role models with a similar identity or background within their organisations would help support their own job progression. Also, leaders need to be senior sponsors who will take responsibility for nurturing and growing future role models.
- Set the tone at the top; lead from the front: Many employees do not believe their companies are fully committed to improving diversity and creating inclusive cultures. Senior leadership need to better articulate the benefits and importance of a diverse workforce to their broader staff base, while providing authentic support to ethnic minority employees.
- Educate and empower HR teams and review recruitment practices: A lack of diversity within internal HR teams may be limiting progress on hiring from non-traditional sources, while many employees do not have faith these departments will adequately and appropriately tackle discrimination. Leaders need to give HR teams the suitable training, authority, and budgets to be able to search for, hire and support employees from diverse backgrounds.
While the index remains a useful tool to monitor D&I progress, we still require more firms to voluntarily disclose ethnicity related data. Accurate data on representation within the industry will provide much needed context on a range of issues, including the ethnic pay gap, and allow for a more focused view of the experiences of specific ethnic groups. The experiences of ethnic minorities are not uniform, something that needs to be reflected in the data.
The financial services industry has made great strides in advancing more diverse and inclusive workplaces, developing progressive initiatives, and putting more emphasis on the benefits that diverse teams and cognitive diversity can bring to organisations.
While these are positive changes, the reboot. findings clearly illustrate there is a long way to go to achieve real inclusion. This is not just a societal imperative anymore - firms that rely on performative gestures versus substance will find themselves at a competitive disadvantage.
Now is the time and opportunity for employers to prioritise how they can move the needle and create truly inclusive environments within their companies for their own success and that of society at large.
Anoosha Livani is marketing director and advisory board member at reboot
Brandon Bhatti is account manager at Hume Brophy