10. Diversity of Interviewers. Create diverse interview panels whenever possible, leveraging the diverse viewpoints in your firm during employment interviews. | Recognize the contribution of staffers from populations that have historically been underrepresented if they are regularly asked to contribute time to these efforts and compensate them for their participation, which should be viewed as an essential function.
9. Know Your Candidate. Learn about the background and perspective of each candidate and consider how differences can be leveraged to improve your firm’s effectiveness. | So-called “blind” hiring that omits certain demographic information about candidates cannot fix the lack of diversity and can have unintended consequences. | Understand candidate needs and challenges as well as opportunities for growth.
8. Candidate Slates. Have a process that checks for diversity when developing lists of candidates for specific jobs. | Explain your firm’s definition of diversity when using an executive search firm and select search firms that have a track record of providing diverse candidate slates. | Note the risk of including “high potential diverse candidates” in candidate slates but rarely hiring them because of a lack of cultural "fit."
7. Communication. Make sure employees know about efforts to add diversity to the workforce. Communications from senior managers about these efforts can improve employee morale and engagement and even create organizational ambassadors. | “Say it, believe it, dot it … Words without action are counterproductive."
6. Data. Measure what matters, not what’s convenient. Benchmarks can help especially as data are shared and tracked over time. | Consider the Global Diversity and Inclusion Benchmarks, gender pay gap analysis and questions about inclusion in employee engagement surveys. | “If you’re not adding numbers to the conversation, you are not having a real conversation.”
5. Storytelling. Don’t rely on just spreadsheets to encourage diversity within an organization and track its progress; use personal stories as well. | “Storytelling promotes connected, authentic working relationships and fosters a better understanding of diversity and inclusion.” | Stories also serve as qualitative evidence about the progress being made on diversity within an organization.
4. Biases. Awareness of biases doesn’t prevent people from acting on them. | Use creative training techniques to uncover biases and provide tools to identify them, including simulations and role-playing to test situations and view reactions, Implicit Association Test and tools to identify potentially biased language in job posting. | Participation should be voluntary.
3. Culture vs. Policy. “If only the C-suite says it, it is policy, but if others say it, it is the culture.” | Consistent and honest communications from the top can help increase adoption of diversity policies by middle management, who are key to increasing diversity at firms.
2. Intersectionality. The term refers to the multiple characteristics of individuals. | Don’t oversimplify the demographic profile of individuals. | Recognize that people are complex and don’t individually represent a whole category of their cohort. | For example, don’t ask a female participant in a meeting what women would think about a particular idea, as if she represented all women. | Allow individuals to self-identify without limits.
1. Define diversity. This is the most fundamental action that firms can take. “Without specificity you will not be able to set clear goals or focus,” according to the report. | Commit to a specific useful definition of diversity that is appropriate for the firm and consider using the Global Diversity and Inclusion Benchmarks for reference. | “Discuss your firm’s motivations for pursuing an inclusive culture and recognize that individuals in the firm may have differing motivations around diversity.”
(Related: 5 Tips to Build a Senior-Friendly Practice)
Financial advisory firms that want to attract more female, millennial and minority advisors as well as clients may be interested in the results of a new CFA Institute initiative focused on diversity and inclusion in investment management.
After holding a series of workshops with top and mid-level managers at 99 asset management and wealth management firms and institutional investors representing roughly $38 trillion in assets, the institute issued a report recommending an “action list” of 20 ideas that firms can adopt.
Workshops were held in five American cities — Boston, Chicago, New York, Philadelphia and San Francisco — and Toronto between October 2017 and May 2018 with a total 344 attendees. The idea was to learn why organizations want to increase diversity and the strategies they’re using to do so, including the focus of those strategies, best practices, and ideas for future action.
Their motivation broke down as follows: 80% use diversity to improve business outcomes, 71% to attract talent, 52% for ethical and value imperative reasons, 42% for reputation, 28% due to client demand and 6% for compliance purposes.
The focus areas were gender (96%), race/ethnicity (83%), LGBTQ (58%), veterans (45%), millennials (43%), inclusion (39%), ability, such as vision-impaired (25%) and other (8%).
“Just as there are rewards for the right actions, there are risks involved in doing nothing,” according to the CFA Institute report, “Driving Change: Diversity & Inclusion in Investment Management.”
We have included in reverse order the first 10 ideas from the action list, which Rebecca Fender, head of the Future of Finance initiative at the CFA Institute, ranges from those that are most “foundational” to slightly uncomfortable. Seven of the 10 ideas were also included in attendees’ list of the ideas that would have the most impact.
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