Today’s WatchBlog explores these questions and our recent report on the management-level representation of women and minorities and diversity practices in the financial services sector.
Who works in finance, anyway?
Women made up about 45% of managers across the financial services industry—companies that focus on banking, insurance, securities and other financial services—in the period we examined, 2007 through 2015.
Among managers, there are those at the senior-level (the decision makers) and those in the first- and mid-level manager category (managers who oversee day-to-day operations and report to senior-level managers). Women made up about 29% of senior-level managers and about 48% of first- and mid-level managers.
In addition, the overall representation of racial and ethnic minorities in management positions in the financial services industry increased from 17% to 21% in this period. Minority representation rose from nearly 11% to about 12% of senior-level managers, and from nearly 19% to about 22% of first- and mid-level managers.
You don’t necessarily need a finance background or MBA
Financial firm representatives and other stakeholders we spoke with, and research we reviewed described a variety of practices financial firms take to recruit a more diverse workforce—one that includes women, racial and ethnic minorities, and those who may not have a financial background.
Some of the strategies include:
- recruiting students from a variety of academic disciplines, such as liberal arts or science and technology;
- establishing relationships with student and professional organizations;
- intentionally recruiting diverse candidates; and,
- offering programs to increase awareness of financial services.
Financial firm representatives told us that those with MBA degrees are still an important talent pool, but they recognize that top talent can come from a wide variety of schools and academic disciplines.
Some executives with whom we met explained they are interested in candidates with strong critical thinking skills, and that technical skills can be taught to new employees.
We found that among women, the pool of potential talent—those with bachelor’s or master’s degrees—has been consistent from 2011 through 2015. Women have consistently earned about 58% of bachelor’s degrees and just over 60% of master’s degrees.
The potential talent pool of minorities increased from 2011 through 2015. For example, of all master’s degrees earned, the proportion awarded to minorities increased from nearly 29% in 2011 to 33% in 2015.
While some financial firms are implementing targeted practices to increase workforce diversity—and the pool of potential candidates for the industry appears to be strong—the financial services industry continues to face challenges with recruiting and retaining a diverse workforce.
These challenges include:
- negative perceptions of the financial services industry;
- resistance from firm leadership to recruiting at a broad group of schools; and
- difficulty retaining women and minorities.
Want to know more about diversity trends in the financial services sector and the practices firms are using to attract a more diverse workforce? Check out our report.