How do we tackle unconscious bias against PoC in the finance sector?

A group of women gathered around a table working on a project.

There are believed to be no more than 12 black portfolio managers in the entire UK investment management industry, according to a 2018 study by New Financial (1). The lack of people of colour in the finance industry is still at a staggering low, especially at manager or higher positions, although 118 directors in the FTSE 100 are from an ethnic minority – defined as those who “identify as or have evident heritage from African, Asian, Middle Eastern, Central and South American regions” – up from 92 in 2020 (2). This may look like the numbers are on the rise, however it is still significantly lower than the number of white people in the same position. 

Diverse teams are better for everyone

The effects when staff and leaders are diverse has a positive impact on business. With studies showing that companies with the most ethnic diversity in their leadership teams were 33% more likely to achieve above-average profitability than those with the least diversity (3). It seems like a win-win situation for everyone, however there are still companies who are only giving out words of support for change and not following up with action against racism and discrimination. 

A group of business leaders wrote a letter to the Sunday Times in which they pledged to set diversity targets for every job vacancy in a bid to improve BAME representation.

The letter, signed by leaders such as Dave Lewis, chief executive of Tesco, Penny James, chief executive of insurer Direct Line Group, and Kevin Ellis, chairman and senior partner at consulting firm PwC, said “this cycle of inaction and disengagement must end”.

“As business leaders, we need to talk about white privilege. We need to talk about racism. We need to talk about the role we have played in maintaining this system for so long (4). It seems many companies need to take a leaf out of these big leaders' books, recognise their white privilege and use it to listen and amplify the voices of people of colour. 

Let’s fix the leadership gap

Only five ethnic minority directors occupied a CEO position, compared to six in 2020, all of whom are men (2). The lack of diversity in leadership positions is shockingly low, but why are the numbers still so low? The same can be said when it comes to wages as two in five (42 per cent) of black professionals said in the last year they had not received a pay increase after negotiation – double the number of white employees. This increased to three in five (63 per cent) black women (7).

There seems to be a very obvious unconscious bias against PoC when promoting and interviewing, and for many years unconscious bias training was perceived as a potential solution. This focuses on making employees aware of patterns of discrimination and prejudice, and was used widely across the Civil Service. However, a systematic review of unconscious bias training examining 492 studies (involving more than 87,000 participants) found the training was not associated with changes in behaviour, which led to the Civil Service scrapping it in December 2020.

So what can be done to change things?

Without diverse leaders, women (20%), people of colour (24%), and LGBT employees (21%) are less likely to have their ideas endorsed. Companies with more women on their boards experienced “fewer instances of governance-related controversies such as cases of bribery, corruption, fraud and shareholder battles” (8).

Employers need to send a strong message when advertising for jobs or promotions, to tell people that they are committed to promoting diversity and want a variety of people from different backgrounds to work for them. Diversity among leaders contributes to a higher degree of creativity. Those already in leadership positions should be promoting career progression to their black staff and those of other minorities. New blood and fresh ideas coming from the top can filter down and positively affect staff at lower positions. Nearly 900 directors found that 73% of them recognize that diversity is beneficial. Of that segment, 94% said gender and racial diversity brings unique perspectives to the boardroom (8).

Reverse mentoring has been known to bring positive change for those in a position of management to see things from a different perspective. One of the benefits of a diversity-based reverse mentoring relationships is that it pairs people who might otherwise not come in contact with one another. These relationships are often profoundly transformational for both parties and promotes a culture of inclusion in an organisation, where everyone matters.

In contrast to conventional mentoring schemes, reverse mentoring ensures mutual benefit to both the mentor and mentee. The mentee gains new skills and perspectives, whilst the mentor gains valuable insights into company culture, values, business strategy and can tap into years of industry experience accrued by the mentee (9). The benefits of reverse mentoring can range from increased staff retention, sharing of skills, improved company culture and most importantly promoting diversity.

Diversity & Inclusion in the workplace is far more than an “HR issue.” It should be a core ingredient in the design and execution of business strategy and embedded in the activities of the organization day in, day out. Increasing the number of non-white individuals involved in the strategy process will help develop a core purpose that better reflects a broader group of customers and employees. It also gives the organization more opportunities and places to succeed (10).

If you are currently recruiting and want to attract a broader scope of diverse people, have a read of one of our previous blogs; How to write a Job Post that attracts diverse talent

To promote inclusive leadership; 5 ways to promote Inclusive Leadership

We Love Work

We Love Work can help you promote a diverse workplace, help tackle the leadership gap and focus on any unconscious bias by getting anonymous feedback from your staff. For a free demo or more information visit www.welovework.com 


References

  1. Fund managers back scheme to tackle underrepresentation of Black people in the City : CityAM
  2. FTSE 100 firms make ‘significant progress’ on boardroom diversity (peoplemanagement.co.uk)
  3. 10 Ways Your Business Benefits From Having a More Inclusive Leadership Team (tutsplus.com)
  4. https://www.personneltoday.com/hr/urgent-action-needed-on-lack-of-black-people-in-senior-roles/ 
  5. The case for accelerating financial inclusion in black communities | McKinsey
  6. Examining the Black-white wealth gap (brookings.edu)
  7. Ethnic minority workers far less likely to receive pay rises than white counterparts, research warns (peoplemanagement.co.uk)
  8. 10 Ways Your Business Benefits From Having a More Inclusive Leadership Team (tutsplus.com)
  9. Reverse mentoring: seeing things differently - Civil Service (blog.gov.uk)
  10. 5 Strategies to Infuse D&I into Your Organization (hbr.org)

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