I was fortunate to be the moderator of a corporate diversity panel discussion recently at MMI’s Sales and Marketing Leadership Forum in Palm Beach. It was an engaging discussion and one that continues to come up in many of my conversations with companies looking for top tier, executive talent. Because diversity remains such a timely and sensitive issue, I wanted to share some thoughts about why improving diversity may be one of the most effective ways for companies in the financial services industry to grow their business.
In my view, the case for diversity is being driven by three overlapping trends across the country:
- The percentage of minorities in the U.S. workforce continues to grow rapidly. This is unlikely to change any time soon. The U.S. Census said that in 2012, over 50% of children under one year of age were minorities. Our increasingly diverse population and workforce have a clear preference to work for firms that reflect who they are and the population as a whole. Data from our 7th Annual Executive Survey also confirms the desire for a diverse workforce. While 75% of our survey respondents agreed that a diverse management team arrives at better business decisions, 39% felt like their firms weren’t progressing quickly enough to drive change.
- The U.S. consumer is increasingly diverse. Like employees, consumers also want to do business with firms that reflect their cultural heritage and values. Companies that don’t have client-facing employees who mirror the cultural and gender diversity of the country face an uphill battle. Business development is a lot more difficult when a firm doesn’t reflect its customer base.
- Financial services remains a male-dominated industry and is overdue for change. While women represent over 50% of college graduates each year, the ratio of women in financial services is fractional. The percentage of women leaders in financial services is even smaller. Today, women need more encouragement to enter the investment industry. Firms also need to figure out how to retain women through their child-rearing years and keep them on a path towards leadership.
What To Do?
The following are four simple corporate diversity ideas that surfaced at the MMI conference. It’s important to note that one of the most important factors in improving corporate diversity requires the support of the executive suite and Board of Directors. Without it, diversity efforts are likely to limp along.
- Intentionally recruit women and minorities. It’s interesting how simplistic yet effective some ideas can really be. One of the panelists mentioned a simple shift in mindset from his traditional recruitment of college alumni from the hockey team and instead focused on recruiting from women’s sports or sports with more minority players like soccer or basketball. Clearly a big part of driving success in diversity strategies is intentional pursuit.
- Groom qualified men and women of color for leadership positions. Another panelist discussed the effectiveness of pulling women and people of color onto leadership teams through ongoing company mentorship programs. Aligning the interests of minority employees with the company’s priorities through one-on-one integration with a more senior executive is a proven path towards change.
- Aggressively recruit Millennials. Data derived from our annual survey highlighted the fact that opportunities are limited for this demographic. One MMI panelist had success in recruiting Millennials by designing a program to encourage them to develop new business efficiencies. A competition was created, teams were chosen, presentations were delivered to the executive leadership team, and winners were guaranteed that their ideas would be implemented. This initiative injected fresh perspective into the company and sent a message that their voices were valued by senior management.
- Develop a strategy to keep women engaged through their child rearing years. No conversation about diversity is complete without a discussion about attracting and retaining top-performing women during their child-rearing years. One panelist shared her own personal career success story predicated on how her CEO allowed scheduling flexibility for her to work remotely when her children were small. Another idea was a reduced schedule that allows for a four day work week. Make a point to include the details behind corporate strategies that benefit women in any recruiting conversation where women are involved to show the pathway for engagement and retention over the long term.
The diversity session at MMI was refreshing, and the discussion clarified the need for our industry to do more as quickly as possible. Firms that embrace and lean in to changing cultural dynamics will not only enjoy a competitive advantage, but also will benefit from the satisfaction of knowing the industry is doing the right thing.