Why DEI Is Critical to the Future of the Financial Services Sector

The Financial Services sector has an upcoming talent crisis and prioritising Diversity, Equity & Inclusion (DEI) may just help to solve it. The Financial Services Skills Commission’s (FSSC) Future Skills Report 2023 highlights record levels of vacancies within the sector and increased demand for 13 future skills. The implications are serious: a lack of suitable talent could impact business success and in severe cases even pose an existential threat. For Green Park’s Financial Services consultants, the solution is clear: if organisations want to survive and thrive, they need to embed DEI in their talent strategy.

 

Technology Skills Shortage

According to the FSSC Future Skills 2023 report, the top five in-demand skills required by the Financial Services sector are all tech-based: data analysis; digital literacy; software development; cyber security; and UX. As Jamie Robinson, Partner of Green Park's Information and Technology Executive Search Practice, points out, these are all areas where levels of diversity are low:

“McKinsey research shows that women hold just 22% of tech jobs in European companies (30% in data engineering and analytics but down to 19% for software development). For ethnically diverse groups, the figures are not much better: they make up 25% of tech workers. As technology continues to transform the world, the need for these skills is only likely to increase. This is particularly true for the financial services industry which has double the proportion of tech roles compared to the wider economy, at 1 in every 8 roles, according to the FSSC. With technical skills short of supply by 20%, financial services organisations will need to ensure they have access to the broadest supply of high-quality candidates, which means expanding their talent pipelines and taking action to boost equity and inclusion now, before it’s too late.”

The lack of progress on diversity across IT roles is at odds with progress on diversity at senior levels across the UK’s largest companies. Although 40.2% of FTSE 350 Board positions are now held by women, only 21% of CIOs are female. Meanwhile, research by Tech Nation found that just 9% of C-Suite leaders in tech companies were female and only 3% of Chief Technology Officers or Technical Director roles are held by women.

Similarly, the ethnic make-up of technology leaders continues to fall short; Tech Nation reports that although at 15.2%, tech boasts a marginally higher proportion of ethnic minority people than the labour market as a whole (11.8%), this does not represent the UK population, where, according to the 2011 Census, 20% of people living in the UK are an ethnic minority.

The FSSC recommends that to tackle the tech skills shortage in financial services, firms should better understand ‘how changes in roles and skills affect different groups in the workforce and prioritise reskilling these individuals.’ According to Green Park, this should include looking at how changes in roles and future skills demand will affect different employee demographics groups.

Through targeted initiatives to attract and support diverse talent through upskilling and reskilling programmes, the financial services industry will not only create a talent pipeline able to meet their future skills needs, but a more diverse talent pipeline that will boost innovation and productivity. This is because teams with different backgrounds, skills and perspectives, have been found to be better at problem solving and decision making than homogeneous groups, (McKinsey).

“Organisations must learn how to hold on to their employees in a fiercely competitive market. Long-term investment in tangible talent retention strategies is now indispensable, with learning & development and structured career development both critical for both recruiting and retaining team members,” says Jamie Robinson. “As we saw in the pandemic, company restructures often disproportionately impact ethnic minority and female employees. By applying a DEI lens to upskilling and reskilling programmes and creating a more equitable and inclusive company culture now, organisations can ensure a more diverse employee pipeline for the future.”

 

Unlocking Neurodiverse Talent

As well as broadening their tech talent pool  to include more women and ethnically diverse candidates, financial services organisations have much to gain by opening their doors wider to neurodivergent talent.

“Many tech roles are particularly suited to neurodivergent employees, who often challenges in an innovative way, which within the ever evolving tech space is a critical skill,” says Liz Walker, a Director in Green Park’s Private Sector Practice specialising in HR Executive Search. “Neurodivergent talent can often display traits such as strong attention to detail and hyper focus, which can be game-changing for a business. In fact, research from Hewlett Packard Enterprise suggests neurodivergent people are 30% more productive overall and autistic people in the right environment can be up to 140% more productive than their colleagues (JP Morgan Chase).”

Although neurodivergent candidates have historically struggled to access work with just 21.7% of people with autism in employment (ONP), the tide is changing, as more and more employers recognise the enormous benefits that neurodivergent employees bring. However, there’s still a long way to go. In a survey by Green Park partner, Neurodiversity in Business, 47.2% of respondents said their DEI policy included disability but just 22% reported a focus on neurodivergence.  

By incorporating neurodiversity into their DEI policy, financial services organisations will be better positioned to attract and leverage neurodivergent tech talent. This may also mean making adjustments to the recruitment process, in order to increase accessibility.  

“The standard CV, application form and interview can be a struggle for a neurodivergent candidate, so organisations need to consider other forms of assessment, for example, a live technical issue to solve or a short project,” says Liz. “They also need to look closely at where they are advertising their roles and whether this material is engaging to a neurodiverse audience. For skills evaluation, a different framework may be necessary. The key is to be inclusive and accommodate for all to ensure neurodivergent talent is not disadvantaged.”

This extends to retention and employers must be prepared to make reasonable adjustments to keep talented neurodivergent staff. It could be as simple as placing a neurodivergent employee in a quiet area or enabling them to communicate via digital channels.

The same consideration should be applied to all other diverse and intersectional employee groups to ensure equitable recruitment, retention, and advancement.  

 

Boosting Behavioural Skills

The FSSC Future Skills Report 2023, also finds that in addition to a shortage in Technical Skills, the demand for a number of essential behavioural skills were also outstripping supply. Just as the case for prioritising DEI to secure necessary tech skills is clear, for Juliet Hardingham, a Director at Green Park specialising in Financial Services, improving DEI will be just as important in meeting supply when it comes to behavioural skills.

“The FSSC report also highlights a number of soft skills, including coaching, relationship management, teamwork, adaptability, creative thinking and empathy, which are vital to an organisation’s success. Leaders need these skills to understand their customers, boost team performance and navigate today’s turbulent world. All of these behaviours have been positively liked to groups with greater cognitive diversity. This means building teams of people with varying backgrounds and perspectives, which requires hiring managers to change their approach from a ‘culture fit’ mindset to ‘culture add’.

To boost these behavioural skills, it is also vital for financial services organisations to look inwardly at the culture and ask if it is one that supports authenticity, idea sharing, creativity and collaboration.

“The first step is for an organisation to assess its strengths and weaknesses in terms of Diversity, Inclusion, culture & Ethics (DICE) in order to make the right changes,” says Juliet. “A professional audit can establish a baseline and show you exactly where you need to make improvements and how best to prioritise resources and spend. For example, the Green Park’s DICE consultancy has developed a Cultural Audit, Review and Engagement (CARE) framework that helps to identify ‘disconnects’ between an organisation’s policy and the actual lived experience of its employees, customers and other stakeholders.”“

 

Key Recommendations

To avoid a future talent crisis, organisations across the Financial Services sector need to start mitigating for potential skills shortages now. The talent landscape is already highly competitive and the struggle is only likely to intensify. To overcome talent shortages, financial services organisations will need to be able to attract and retain the very best candidates from the broadest talent pool. Those organisations who make DEI a priority now by building diverse talent pipelines and creating an inclusive culture, will have a competitive advantage in building higher-performing teams meeting their future skills needs. This means:

• When looking at how changes in roles and skills affect different groups in the workforce, consider employee demographics. Use upskilling and reskilling programmes to build a more diverse, and therefore productive, talent pipelines.
• Adapt your talent attraction strategy, recruitment processes and workplace to be more accessible and equitable to a broader range of talent, including neurodivergent candidates who often display traits particularly suited to tech roles.
• Audit your company culture to understand how it supports cognitive diversity and inclusion throughout the employee lifecycle, so that you can prioritise resource and spend against your company’s DEI objectives.
• Find an Executive Search firm that has lived-experience and DEI at the heart of what it does.

A global talent advisory firm, Green Park is an industry pioneer in building diverse senior leadership teams and more equitable workplace cultures. Our search expertise and organisational consulting capability enables us to work in the intersection of diversity, talent and brand, partnering with clients and creating a trusted bridge between organisations, their employees and future talent. For support, please contact Green Park’s expert consultants.