Lack of women in senior roles is a widely discussed issue in the finance industry – but diversity and social mobility appear to be just as big an issue.
The Investment Association recently released a research report calling on investment managers to promote social mobility in their recruitment practices.
This is to encourage more representation from people of different classes and backgrounds in the finance industry.
Chris Cummings, chief executive of the Investment Association, says: “Diversity of background is essential to providing the diversity of thought which our industry needs to thrive. A change of approach will offer new opportunities to talented people and ensure that our industry reflects the people we serve.”
Cummings highlights industries wanting to promote and support social mobility, saying that they “cannot solely compete for a small pool of Oxbridge graduates from diverse backgrounds”.
The research report also says investment managers should “recruit for potential rather than polish” and ensure their “workplace culture doesn’t favour people who’ve come from more privileged backgrounds”.
Even though these issues are prominent in finance, companies are putting in practices to encourage change.
Jo Davis started the diversity and inclusion programme as part of the Leasing Foundation and said a lot still needs to be done to work on diversity and inclusion in the finance sector.
Davis helped set up the programme after noticing a need for these topics to be discussed.
She says: “We realised that the asset finance and leasing businesses needed to address a strategy and a policy to build diversity and inclusion into their businesses. We set up a committee and looked at the gaps to see how we can support businesses with their diversity and inclusion policy.”
A specific area of their work looks at age diversity and encouraging companies to give equal opportunities to youngsters.
She adds: “We looked at age diversity and making sure that if you are young and clever and want to be successful, that you are invested in and you are not seen as too young for that role and when moving up the ranks, age doesn’t become an issue and you still have equal opportunities regardless of your age.”
She said one of the things discussed on the committee is how millennials when looking for a job, look on websites to gain perspective on the diversity in the company.
Speaking on the topic of recruitment, Davis said there is more work to be done to address how companies are recruiting: “We need to be thinking what we are doing at recruitment level and are we making it clear to our recruitment agencies that we are a diverse and inclusive business.”
She also said companies should move away from recruiting someone similar and likeminded to them, and “challenge” themselves in the recruiting process as this will encourage more diverse boards in the future.
The Parker review in 2016 outlined UK citizens of colour represented only 2% of directors in FTSE boardrooms.
Minister for small business and consumer business Margot James MP said in the report: “It is clear that the boardrooms of Britain’s leading companies do not currently reflect the ethnic diversity of either the UK or their key stakeholders, including customers, suppliers and employees that are critical to the future of their businesses.”
Mike Randall, chief executive of Simply, said he is encouraging more diversity in the workplace by hiring younger professionals.
Simply is one of the fastest growing asset finance companies in the UK at 32 months old and has hired approximately 25 younger professionals from diverse backgrounds.
Randall is a board member in the Leasing Foundation and said he believes there is a lack of investment in the younger generation and wants to give more opportunities to them.
He says: “I think there is a lack of expertise in our industry and there is a lack of investment in future talent. At Simply we are going down the route of attracting young talent and giving them a change to enter into this industry and give them options for growth.”