A significant number of ethnic minority employees working in the investment space have reported their skills have been overlooked, holding back their career progression, and also flagged that while executive teams have talked a lot about diversity, they are not fully committed to inclusion policies, a report has revealed.
Think tank and investment professional network Reboot – which teamed up with our sister publications ESG Clarity earlier this year to tackle racial inequality in the workplace – worked with research house Coleman Parkes to survey 8,000 employees from 440 UK financial services firms, ranging from blue-chip companies to boutiques, to compile a study summarised in the report Race to Equality: UK Financial Services.
The headline findings were that only a third (36%) of respondents believe their companies are “fully committed” to enhancing diversity and inclusion, and almost half (48%) of ethnic minority respondents believe their career progression is slower than that of their white colleagues.
Alarmingly, two-thirds (66%) of ethnic minority respondents in financial services have experienced discrimination at their organisation, as a result of their background.
A senior manager working in financial regulation – a Black man – commented on the findings: “It’s been really encouraging to see the commitment, time, energy and – yes – funding that financial services firms have put into their recruitment, retention and learning, and development practices for racially and ethnically diverse colleagues in recent times.
“However, the figures in this latest report are sobering. They indicate that we’re still only just starting down a very long road and that much has to be done by senior leaders – and I include myself in that – to build trust and define what a healthy, inclusive culture truly looks like.
“With all the current talk of a ‘Great Resignation’, the competition for talent has never been stronger. Financial services firms have much to gain from getting things right in these areas, and everything to lose if they don’t.”
As highlighted, 48% of ethnic minority employees surveyed said their career progression is lower or significantly lower than that of their white peers, which the report said suggests an unconscious, or potentially conscious, bias exists within recruitment and career development.
Furthermore, more than half the respondents said their skills and talent have been overlooked – this was reported by 58% of Asian or Asian British respondents, 56% of mixed or multiple ethnic groups, and 55% of Black, African, Caribbean or Black British.
They also highlighted ingrained work practices, poor performance of management, lack of effective training and development programmes as other barriers to career progression.
Shockingly, two-thirds of ethnic minority employees reported discrimination at their organisation based on their background, including unwelcome comments of conduct that was “offensive, embarrassing or hurtful”. Half of financial services employees have raised these with HR, but only two-fifths reported it being dealt with effectively.
Reinforcing the need for effective and inclusive leadership, only a third said they would feel comfortable reporting discriminatory behaviour in the workplace.
Nizam Hamid, ETF consultant and member of Reboot, said: “The report confirms the very specific feelings of discrimination many ethnic minorities have experienced together with a view that they have been disadvantaged with respect to their careers and overall treatment at a corporate level.
“It highlights the need for greater transparency in the workplace, a commitment to more inclusive hiring practices and positive change with management and HR taking the lead.”
Maddi Forrester, head of global consultant relations at MFS Investment Management, and a member of the MFS Diversity Council, added: “The results of this survey are a stark reminder that, as an industry, we are really just beginning this journey. Each and every one of us has a role to play in building a diverse workforce and fostering an environment of respectful challenge to get the best from our industry’s most powerful resource — people.”
Meanwhile, Reboot’s survey also asked about organisations’ values around inclusion and diversity policies.
Interestingly, 76% of white employees supported the statement ‘my organisation values inclusion’ but this fell to 65% for mixed or multiple ethnic groups, 63% for Black individuals and 62% for Asian or Asian British.
It was a similar case for the other positive statements around diversity and inclusion where white individuals felt stronger than ethnic minority peers.
The report also said that, although the majority (84%) of respondents agree their organisation actively promotes an inclusive culture, citing mentorship programmes, D&I training, better quality people management practices, and creating employee networks and support groups, there is “discord” between what firms are actually doing amid a perceived lack of commitment from minority employees.
It highlights that there is a “clear lack of diversity at the senior level”, and therefore decisions are being made by those less experienced with the challenges minority groups are facing. Additionally, there is a lack of ethnic representation in HR teams, which the report said is something that needs to be urgently addressed.
Words vs actions
Joerg Ambrosius, Reboot ambassador and chief executive for State Street Emea, said: “As we continue our efforts for equality across our industry, the Reboot report illustrates the gap that remains between verbal commitments and ambitions versus actions taking place in the workplace.
“There is more work for all of us, and the problems and challenges that remain will only be solved if we address them collectively. This must have everyone’s attention.”
Meanwhile, the study also found three-quarters of financial services employees see ESG issues as important to their organisation, and seven in 10 agree that organisations with a diverse workforce and an inclusive culture are seen as fulfilling the social element of ESG, which is beneficial to their reputation and generates more business.
Commenting on the report’s overall findings, Noreen Biddle Shah, founder of Reboot and head of marketing and communications at Numis, called for allies in senior positions from all backgrounds to think about how to improve the current situation.
“As the UK financial services industry re-evaluates its competitive position post-Brexit and the current war for talent, we need to capitalise on the advantages that a diverse pool of talent can bring, and take all necessary steps to convert this from theory to practice.”