The Importance of Diversity in Financial Services
By Andrew P. Russell, MAJ (Ret.) President, Sound Payments Inc. and Brian Rhonemus, CEO of Sanford Rose Associates Rhonemus Group
With the recent chain of events across the country, there is a lot of talk about racial tension, the economy and immigration. We have work to do in each of these areas, and we can’t afford to rely on political leaders to do the job for us — we all play a role. All three issues touch our industry, so we have to push forward to do our part in solving them.
The definition of diversity, according to Merriam-Webster, is “the state of having people who are different races or who have different cultures in a group or organization.”
The lack of diversity has been a challenge for the banking industry. Attend an event or spend a few minutes considering this matter in the industry, and you, too, will find that the industry could benefit from additional diversity. Terry Gore, a correspondent banker covering the Midwest, said it very clearly: “I have been in banking since 2001, attending conferences across the country, and I have not seen any other African Americans at these events or in senior leadership roles.” That matches what we’ve seen, too.
Diversity is about learning from others who are not the same. It is about dignity and respect for all. It is critical to create workplace environments and practices that encourage learning from others and help capture the advantage of diverse perspectives.
Corporate and organizational commitment to diversity is an important business initiative and contributor to increased employee engagement. By building a diverse workforce, you can better serve diverse customers and communities, helping you grow the company and create shareholder value.
Diversity is the key to your company’s sustainable future growth and must be part of your company’s core values. As a leader, it is imperative to value your employees’ diverse backgrounds, experience and knowledge. They can provide perspective and develop innovative solutions to drive the growth and success of your company.
Strive to offer a workplace reflective of your commitment to the broad cultural, ethnic and lifestyle diversity of the markets where your team members live, work and serve.
Why focus on diversity? Creating a stronger diversity culture will:
- Improve effectiveness in working with customers, communities and peers.
- Encourage different viewpoints.
Working together to foster innovation and increased employee engagement will help you sustain growth in our current economic and competitive environment.
Fostering an inclusive work environment will:
- Allow others to recognize our differences’ critical value and our individual and collective strengths and skills.
- Leverage the broad cultural, ethnic and lifestyle diversity of employees against an increasingly more diverse marketplace.
- Create better-engaged employees who can assess issues, provide perspectives and develop innovative solutions.
Enhanced reputation as an employer and service provider will:
- Allow customers to see the commitment to diversity in actions as well as words.
- Harness the energy of diversity and put it to work.
- Create diversity efforts that will continue to strengthen the connection between values and business strategy.
- Reflect a commitment to employees by building a workplace that respects the multitude of differences they bring to the workplace.
- Respond to the changing demographics in all communities and customer base.
Companies that want to build a diversity strategy should consider creating and sponsoring Employee Resource Groups (ERGs) to provide input on recruitment that focuses on hiring a more diverse talent pool. One approach would be to assign each ERG a recruiting point of contact who could be a liaison between the ERG and diverse, underrepresented groups within the company during the referral process.
The recruiting point of contact would attend monthly ERG meetings and develop relationships.
Companies should also consider creating an Office of Diversity and Inclusion with a chief diversity officer and a diversity liaison. Their responsibilities would include:
- Creating individual development plans. They could work with employees to develop these.
- Writing a succession plan. What career options are available within the company? Is it possible to rise to the very top?
Each organization should focus on increasing diversity when developing and retaining talent.
To ensure that diversity is considered when developing talent:
- List key positions. Which positions could best be created or filled with more inclusive choices?
- Create a Strategic People Plan. How will the organization implement changes in hiring decisions and promotions?
There should be an exit interview to identify problems and unconscious bias anytime an employee resigns voluntarily. If done correctly, questions asked during the exit interview can identify areas of concern that cross both gender and race. Use the information to determine possible corrective measures. That process leverages weakness (bias) into strength.
- Have a line of business leaders who conduct the exit interview for the top three pay-grades. They should pay special attention to interviews with women and people of color.
- HR may conduct an exit interview for all other pay-grades.
Each exit interview has the following goals:
- To discover the root cause of turnover
- To gain knowledge about pay, incentives, opportunities, management, workplace practices, relationship with supervisor, relationship with peers and workplace environment
Conducting and learning from exit interviews will develop employee awareness beyond political correctness and truly make diversity a core value within the company’s framework. To maximize the benefit from the exit interviews, create a multicultural program and training that does the following:
- Deliver facilitated coaching sessions for all senior managers. Sustainable change must start with the top of the house!
- Deliver diversity awareness training and coaching to all other managers, followed by all other employees.
Diversity should be a top priority, but success will only be achieved if we inspire people to operate in an environment based on mutual trust, respect, openness, candor, empowerment, teamwork, innovation, risk-taking and integrity.
Please encourage and value diversity. We can begin by banding together and talking collectively about diversity as banks, associations, and partners to the banking industry.