Nicsa’s Diversity Project North America's Education Engagement & Outreach Committee is dedicated to widening pipelines of diverse, early career talent into the asset and wealth management industry. In a recent meeting, the committee focused on how to support, retain, and promote that talent. A summary of the results of that Round Table discussion follows.
Nicsa’s DEI Perception Study offers robust data on industry perceptions and challenges us all to think and act differently in our organizations.
One of the key takeaways from the study, “Best Practices in Talent Recruitment and Retention Must Evolve” discusses the need for the industry to “commit to thinking differently about how it attracts and retains talent at all levels – especially in the face of today’s challenging economic and political environment.”
We feel that the focus should not just center around attracting and recruiting diverse talent; the larger issue is about retaining and promoting that talent.
According to the study, 81% of respondents felt that the industry is “committed” or “somewhat committed” to attracting and retaining diverse talent. However, when asked about the success of their own organizations in this regard, 55% of respondents felt that they were only “somewhat successful.” This demonstrates a disconnect in perception.
Over the past few years, much of focus has been on DEI and hiring diverse talent. While many firms have made great strides in this area, several challenges still exist that may impede ongoing efforts to retain diverse talent, including:
- DEI has come under fire recently and is being de-prioritized by many firms
- Diverse employees may not see a lot of people who look like them in leadership roles. According to the NICSA DEI Perception Study, only 22% of firms were “successful” or “very successful” at finding a diverse pool of candidates to fill leadership positions. The asset management industry has historically been characterized by a lack of diversity in its leadership roles, a trend that persists despite growing awareness and initiatives aimed at promoting inclusivity. This is compounded by unconscious bias in hiring and promotion processes, which can inadvertently favor candidates who conform to a traditional profile, often excluding those from underrepresented groups.
- Layoffs can disproportionately affect diverse employees due to various factors, including tenure, network strength, or unconscious bias. A study by McKinsey & Company titled "Diversity wins: How inclusion matters" (May 2020) suggests that companies with diverse workforces are likely to outperform their peers and may be better positioned to navigate economic downturns. However, during layoffs, the loss of diverse talent can reverse these gains and lead to a less inclusive culture, which can be detrimental to long-term success.
- A lack of trained leaders and/or infrastructure in place to support diverse employees, which can lead to a work environment that fails to recognize the unique challenges and needs of underrepresented groups. In a report by the Center for Talent Innovation's "Being Black in Corporate America" (December 2019) highlights that Black employees often lack access to senior leadership and support, which hinders their career advancement. Without the proper infrastructure, such as mentorship programs, career development paths, and inclusive policies, diverse employees may feel undervalued and overlooked, increasing turnover rates.
- The absence of support programs and networks, which can lead to a sense of isolation and a lack of community within the workplace. According to Catalyst's report "Feeling Different: Being the 'Other' in US Workplaces" (December 2019), employees who feel like "the other" are more likely to be on guard and to experience a detrimental impact on their work experience and intent to stay. Employee Resource Groups (ERGs) and mentorship programs are examples of support networks that can provide a sense of belonging and help diverse employees navigate their careers.
Corporate Culture Remains Top-Ranked Obstacle (Source: Nicsa's DEI Perception Study)
Asset and wealth managers can implement several strategies to better retain diverse talent and foster an inclusive environment that encourages individuals from all backgrounds to thrive and advance into leadership roles, including:
1. Mentorship and Sponsorship Programs: Establish mentorship programs that pair diverse employees with experienced leaders to provide guidance, support, and advocacy. Sponsorship goes a step further by having senior leaders actively promote and champion the careers of their mentees.
2. Career Development and Advancement Pathways: Create clear career progression paths and professional development opportunities for diverse employees. This includes leadership training, skill-building workshops, and educational programs that prepare them for senior roles.
3. Bias Training and Inclusive Hiring Practices: Provide training to all employees, especially those involved in hiring and promotions, to recognize and mitigate unconscious bias. Implement structured interviews and diverse hiring panels to ensure a fair and inclusive recruitment process.
4. Inclusive Culture and Employee Resource Groups (ERGs): Foster an inclusive workplace culture where diversity is celebrated and valued. Support the formation of ERGs that provide a sense of community and belonging for underrepresented groups.
5. Flexible Work Arrangements: Offer flexible working options to accommodate different lifestyles and responsibilities, which can be particularly beneficial for attracting and retaining a diverse workforce.
6. Accountability and Transparency: Set diversity and inclusion goals and regularly report on progress. Hold leadership accountable for meeting these objectives through performance evaluations and compensation structures.
7. Networking and Community Engagement: Encourage diverse employees to engage with external professional networks and communities that can provide additional support and opportunities for growth.
8. Feedback Mechanisms: Implement regular surveys and feedback channels that allow employees to voice their experiences and suggestions for improving diversity and inclusion within the firm.
9. Diversity-Focused Recruitment: Partner with organizations and educational institutions that serve underrepresented communities to build a diverse talent pipeline.
10. Work-Life Balance and Wellness Programs: Recognize the importance of work-life balance and mental health by providing resources and programs that support employee well-being.
As the committee continues its work, the key takeaways from Nicsa’s DEI Perception Study will continue to serve as a foundation for creating and sustaining healthy talent pipelines for our industry. The Diversity Project North America aims to help its members attract and retain the best talent to enhance innovation and drive success. If you would like to learn more about getting involved in these and other industry discussions, please reach out to info@nicsa.org.
Nicsa’s Diversity Project North America is a cross-company initiative that champions DEI as a strategic business priority within the asset and wealth management industry.