There’s no excuse: Banks need to diversify their hiring
American Banker published a bylined article, “There’s no excuse: Banks need to diversify their hiring,” authored by Russell Reynolds Associates Consultants Robert Voth and Jane Bird on the critical need for diversity in the banking industry. The article is excerpted below.
The success of Carnival Cruise Line is no surprise to Arnold Donald, Carnival’s chief executive or his supporting executive staff, seven of which are women or nonwhite men, and were recruited from a variety of industries. Donald’s strategy of creating a diversified workforce where differing opinions are welcome and respected has contributed to an 80% increase in stock price and rave reviews from customers.
More broadly, it’s clear that companies whose diversified management teams reflect their customer base significantly outperform their peers who fail at this achievable goal.
C-suites that represent a wealth of knowledge across different genders, race and experiences are on the rise within today’s world of digitization and innovation. Banks are aware of this, talk about it and write it in their annual reports and strategy handbooks — and yet they struggle to make it happen. Why is that?
While there is truth that demand for experienced, diverse executives within banking far outstrips the supply, there is no excuse for the lack of creativity that still permeates executive recruiting strategies.
One perceived challenge is space. There are only so many boxes that are direct reports to the CEO. However, there are, on average, 50 or so boxes available to those direct reports and over 300 to those executives. The room exists within the hierarchy of banking, and not just in the traditional safe havens of marketing and human resources.
Institutional fortitude is needed to ensure banks look, feel, act and communicate as society does. It takes grit and guts. Some are tempted to ignore or debate this simplistic solution, but on the front lines it becomes obvious that resolve is a key factor in success. Financial services companies put in the effort at the beginning of an engagement, but often fail to find solutions that end in a diversified hire.
Too often we are asked to ensure we have a diverse slate if they fall within the lengthy list of competencies that one would only gain — wait for it — from years of experience within banking. This generates a candidate pool that is predominantly white and male, and whose experiences are centered within banking, thus doubling down on a lack of diverse candidates and diversity of experiences.
Old-guard executive recruitment strategies do not square with the needs of an increasingly diverse customer base. Qualifications and competency designs too often come from traditional job specifications that focus on the job at hand with limited vision. They often focus on current needs and fixing sins of the past, instead of considering what a role can become or should aspire to accomplish in a digitally led, customer-obsessive world.
To read the full article, click here.