A Diverse Workforce Starts With Diversity In Recruitment

As the corporate world increasingly adopts various initiatives to imbue a more diverse and inclusive culture in the workforce, many a time it begins with recruitment.

What is being addressed across diversity within the financial services industry today?

Diversity comes in a plethora of shapes and forms, with one key facet continuing to stand out – that of gender diversity. With research highlighting superior business results, productivity, and wellbeing of staff as a function of a diverse team, the push for gender balance within financial services has existed for some time with the focus on it incrementally increasing.

Particularly, we are seeing clients request for strong female representation in investment teams along with some demand in investment operations and client services teams. Similarly, we have also had some clients express a desire for more male representation in female dominated teams such as responsible investments; this occurrence in proportion is an anomaly.

Kaizen has been conscious of tackling other biases that persist such as ageism, with consultations to clients on considering experience and mindset beyond age profiles, however conversations coming from the industry are nascent. It is refreshing to hear some clients make enquiries on other facets of diversity and consciously push for their consideration, such as one funds management client asking for conscious inclusion of neurodiverse candidates on a shortlist for a specific role.

At the International Women’s Day event in early March 2022, organised by CFA Societies Australia, Dr. Catherine Ball described gender diversity as the gatekeeper to other types of diversity. With a gender diverse workforce, the likelihood of the workplace to be seen as a safe space increases, allowing for more scope to attract different types of diversity. This is a crucial perspective to allow for the dial to be pushed further on additional facets beyond only gender. Overall increased diversity in an organisation also boosts an organisation’s reputation making it a more attractive employer for candidates.

As McKinsey’s March 2020 report, Diversity Wins: How inclusion matters, cited the business case for ethnic diversity on executive teams remaining strong. It reported a 36% greater likelihood of financial outperformance by the top quartile to the bottom quartile of firms on cultural diversity, across research done in 6 markets, both developed and developing, over a 4 year period. It also highlighted that businesses in the top quartile for both gender and ethnic diversity have a 12% higher likelihood of outperformance.

As the CEO of CFA Institute, Margaret Franklin, cited in her speech at the International Women’s Day event hosted by CFA Societies Australia on 2nd March 2023, diversity is attraction, inclusion is retention and promotion is equity.

What initiatives are being adopted to tackle diversity challenges, especially within recruitment?

D&I policies & fostering culture

Clients progressively have formal policies and initiatives in place to meet certain diversity targets, encourage further female participation and development, which includes encouraging parental leave irrespective of gender, and supporting greater flexibility of working from home (even before the current COVID-19 restrictions and with more adopting a view to extend thereafter). These policies are essential in their purpose to proliferate greater diversity. They provide a footing to support females through various stages of their career to ensure that when they are up for senior roles, they are on par with males.

A large superannuation fund has also introduced access to grandparent leave helping further age diverse policies and also access to gender transition leave, pushing the dial on other facets of diversity, and inclusion.

To be able to retain and promote a diverse workforce, an amenable culture requires fostering, especially one that promotes psychological safety, that too in the continued hybridity of the work environment. As McKinsey’s 2020 Diversity reports reflects this may involve companies conducting targeted training across an organisation and encouraging cultural practices across the organisation, as it requires the entire workforce to facilitate a secure environment, and not only those who identify as diverse.

For example, as Leigh Sales AM, journalist and author, indicated in her speech at the CFA International Women’s Day 2023 event, the conversation with men on caregiving, balancing work and family, needs to be normalised in the workplace to help eradicate gender based biases and help make it a more accepting and equitable work environment.

Gender-balanced shortlists

To encourage greater diversity many firms require minimum or equal representation of female candidates on shortlists, with 50% being a target we seek to attain irrespective of mandates. Some have adopted a 40-40-20% quota of 40% female, 40% male and 20% either/or. Much of the time it is possible to meet client requirements and we are up for the challenge. As a specialist agency, we know how and where to find talent.

Gender-neutral ads

To mitigate prospective candidates from self-deselecting, clients are driving the adoption of gender-neutral ads as semantics can influence or deter candidate applications.

Academic studies indicate not only women are less likely to apply for ads using more masculine words, it generates a feeling of lesser likelihood of belonging, and also the perception generated about the workplace in both male and female candidates alike is that of it being more male dominated.

Blind shortlists

While blind shortlists have existed for some time, we are seeing an increase in their request, with redaction of a combination of personal identification factors like names and schooling. This is to alleviate bias across gender, ethnicity, and nature of thought from educational cohorts.

Sometimes blind shortlists may not be successful in fulfilling the desired diversity outcomes, especially in cases where there is a lack of depth of females in the talent pool to begin with and clients may inadvertently only select male candidates to progress to interview. Ultimately, this emphasises that it is about the best skills and team fit, and as recruitment partners how we can consult to clients about the right fit and meeting their diversity requirements.

Transferable Skills

Many a time hiring manager biases creep into recruitment process to find candidates from certain educational cohorts, specific industry experiences or those akin to themselves; which makes the search for diverse talent harder if there is a dearth of diversity in the talent pool. While firms are increasingly adopting practices to eliminate bias, there is more that can be done to consider candidates with suitable transferable skills to broaden the pool of candidates to consider overall, and especially to help enhance diversity, without the loss of quality outcomes.

On the plus side, bringing in more transferable skills, helps create a pathway for more scope for development in the role, which in turn can aid retention. As Kaizen has regularly surveyed its target market, career development consistently ranks in the top 2 reasons for candidates to entertain opportunities along with flexibility; above salary.

Kaizen Recruitment for example recently partnered with a respected fund manager to recruit multiple female investment analysts, to help build a pipeline of future female talent, and one which enabled the consideration of a broader skill set of talent, so far as they had the right quant skills, passion for and an understanding of investments, and the right attitude and aptitude to learn.

Curated interview panels

One progressive superannuation firm explicitly in their recruitment protocol mandates each interview be conducted with a panel of two with a gender balance and diversity across tenure, skillset, and backgrounds, equipped with interview guidelines to minimise bias in the interview process to ensure the best person is selected for the job.

So what impact are these initiatives having on diversity in financial services recruitment? Check out part 2, State of Diversity: Year-in-review, where we reflect on the state of the market and share the trends we’ve noticed.

Kaizen Recruitment specialises financial services recruitment across funds management, wealth management, superannuation, investment consulting and insurance. We are based in Melbourne and Sydney. For assistance or further information please telephone our office at +61 3 9095 7157 or submit an online form.

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