The capital markets industry has a diversity problem.
The good news? Efforts to build and retain a more diverse workplace have become a priority among top executives surveyed by Pensions & Investments for its annual feature on the Best Places to Work in Money Management. In fact, midsize employer AFL-CIO Housing Investment Trust in Washington found its inaugural place on the magazine’s list for its successes in workforce diversification.
The highly regarded investment firm, Wilshire Consulting, embraces diverse hiring practices by being proactive in how they identify diverse talent, and then aggressively pursuing it. EFL Associates has assisted Wilshire through the years by identifying talented individuals for consulting roles and, more recently, for their OCIO practice.
“I need people who bring different points of view and different ways of thinking so that I can continue to grow and learn, be a better consultant and be a better leader,” the company’s president, Andrew Junkin, told me. “Research in this area has demonstrated that organizations with more diversity tend to be high performing organizations.”
But there’s still a long way to go.
According to the U.S. Census Bureau, 80.6 percent of all financial managers nationwide are white, while only 8 percent are black and 6.8 percent are Asian. Likewise, 72.4 percent of the financial analyst workforce is white, while 15.9 percent are Asian and 8 percent are black.
That disparity extends from small, niche firms all the way to the Wall Street giants.
A Business Insider survey found more than 80 percent of all executives at Goldman Sachs, Wells Fargo, JPMorgan, Bank of America, Citigroup and Morgan Stanley are white. More than two-thirds of those executives are male.
Business Insider found a majority of those top tier companies are doing something about it, with initiatives such as leadership and diversity training and new employee resource groups for minorities. JPMorgan Chase started an initiative in 2016 called Advancing Black Leaders to help the company better attract and recruit black talent, as well as retain and develop its existing minority workforce, CEO Jamie Dimon said in his annual letter to shareholders.
At EFL Associates, we believe building a more diverse workforce should be an integral objective when starting an executive search. Diversity can be defined in a number of ways that extend beyond just gender and ethnicity, to diversity of thought and perspective.
Today’s investment climate needs global perspectives to be equipped to meet the needs of an ever-changing and expanding global marketplace.
But most importantly, your clients demand it. It’s highly likely that having a diverse workforce could be the key differentiator between the selection of your firm and that of a competitor.
“If you are not having conversations about diversity with clients yet, you will be,” Junkin says. “And you need specific plans in place to demonstrate that this is a priority for you.”