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Diversity in Financial Services: What Happens Next?

By now you have read about the issue of diversity in modern companies with several reputable sources and statistics to back up these claims. It is not a secret that diversity and inclusion is an issue that corporate firms need to address immediately. Women and people of color have historically been ignored in the corporate world, despite accounting for a sizable amount of the modern workforce.

However, it is not simply a matter of morality or ethicality - implementing diversity initiatives can have a profound impact on business too. Employees are empowered by an inclusive culture which leads to a highly productive workplace. This naturally feeds into the company’s bottom line with diverse firms seeing revenue and profit increases that are several times higher than that of their less diverse competitors.

Now that the problem has been isolated and the need for change has been identified, the next logical question is - what happens next? Firms have expressed an interest in increasing their diversity for many years. In fact, it has been noted that 32% of executives care more about diversity than before. 1 Furthermore, 70% of executives believe that diversity and inclusion is an important issue that needs to be addressed within their firm. 1 The desire is clearly there, but what steps should be taken to accomplish the goal at hand?

Change Your Firm’s College Recruiting Strategy

For most companies, hiring a candidate from an elite school such as Stanford, Harvard, or Yale is preferred over other individuals simply because of where they receive their degree. Oftentimes, it does not even matter what the subject of their degree was, if they were a graduate of an Ivy League or other elite institution, they are more likely than not to obtain the job.

Unfortunately, companies placing an unnecessarily high value on candidates who obtained a degree from one of these universities or colleges automatically exclude a significant number of diverse candidates who may be just as capable of performing the same tasks. The recent college admissions scandal is a solid example of how privilege and opportunity, as opposed to merit, can provide some individuals with more highly regarded experiences than others. In extremely competitive fields such as investment banking and consulting, this issue is even more exacerbated. 2

Switching your firm’s college recruiting strategy to weigh a candidate’s holistic knowledge and experience higher than the pedigree of the school they graduated from will allow you to diversify your recruiting pool greatly, bringing variety to the workforce over the long term.

Stop Recruiting for “Culture Fit”, Recruit For “Culture Add”

Culture fit has been a huge HR buzzword for many years now. It was a criterion used by recruiting teams to find and identify potential employees that would fit into the current corporate culture. However, studies have shown that when firms decided to hire for “culture fit”, they were

simply looking to attract and hire candidates that were most like their current team. 2 A company’s specific culture is not a static concept and will continue to mold itself as the brand matures. Instead, companies should consider ‘culture add’ as a recruitment strategy when looking to hire new employees. Recruiting managers should seek diverse people with different experiences that will be able to add to existing company culture and continue to mold it over time.

Regularly Release Internal Race & Gender Data

For companies serious about improving diversity and inclusion amongst their workforce, it’s important to make sure they are incredibly transparent. We already know that employees want to see their workforce become more diverse and believe managers have the tools to make this happen. Additionally, potential job seekers are also actively seeking out diverse companies and will choose an employer based on this fact. Companies have been very secretive about their gender and racial makeup since the beginning of time.

According to Fortune, less than 4% of Fortune 500 brands openly publish and share the demographic data of their employees to the public. 3 Keeping this information public will establish trust in your brand from employees - both existing and potential. The data is readily available, it should not be too difficult to compile and release the numbers. Showing your diversity numbers will undoubtedly drive diverse candidates to your firm, especially if you are taking strides to improve in these areas.

Achieving diversity and inclusion in the workplace will take effort, but it is absolutely not time or resource intensive. As you can see, the above methods are very simple but effective ways to introduce a bit more diversity into the workplace, especially if you find that your firm is lacking. Consider employing one or more of the above strategies when attempting to increase the gender and/or racial diversity within your company.

Mr. Hough currently serves in a dual capacity with Blaylock Van as the Chief Operating Officer (COO) and a member of the Public Finance Team. Prior to rejoining Blaylock Van, Mr. Hough was CCO at IFS Securities and is the Founding Member of Taurus Compliance Consulting, LLC. Mr. Hough has also served as CEO of Jumpstart Securities (formerly FundAmerica Securities) as well as President and CEO of Capital & Credit International, Inc. Mr. Hough began his career at FINRA’s District 7 office.

**Disclaimer**

This article was prepared exclusively for Blaylock Van, LLC. Links are solely intended for convenience and are not intended to be advertisement whatsoever. Linked sites are not under the control of Blaylock Van, LLC and Blaylock Van, LLC is not responsible for the content of any linked site or any link contained in this article. Blaylock Van, LLC does not endorse companies, or their products or services, to which it links. If you decide to access any of the third-party sites linked to this site or article, you do this entirely at your own risk. This document is confidential and has been prepared for informational purposes only. This document is not to be construed as a recommendation, an offer to sell or a solicitation of an offer to buy any securities. Any dissemination, distribution or reproduction of this document is strictly prohibited without the consent of Blaylock Van, LLC. The information herein is obtained from sources deemed reliable, but its accuracy and completeness cannot be guaranteed, and is subject to change without notice.

Bibliography

[1] Childress, L., 2018. 6 Recruiting Stats You Need To Know For 2018 And Beyond. [online] Available at: <https://www.glassdoor.com/employers/blog/6-hr-recruiting-stats- you-need-to-know-for-2018-and-beyond/>

[2] GOV.UK. 2016. Less affluent kids are locked out of investment banking jobs. [online] Available at: <https://www.gov.uk/government/news/less-affluent-kids-are-locked-out-of- investment-banking-jobs> [Accessed 18 April 2021]

[3] Fortune. 2017. Only 3% Of Fortune 500 Companies Share Full Diversity Data. [online] Available at: <https://fortune.com/2017/06/07/fortune-500-diversity/>

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