Written by Jenny Chu, Chief Financial Officer, finova
Beyond simply being the right thing to do, boosting diversity in the mortgage industry also makes sense. First, it has long been recognised that diverse teams perform better.
Second, the failure to embrace diversity exposes organisations to risks including hampering their ability to attract or retain top talent as well as potentially damaging their reputations with customers, suppliers and potentially with regulators.
Across the financial services sector, firms, vendors and regulators have pushed for an increase in diversity and inclusion. In July 2021, for example, the FCA and Bank of England’s PRA published their discussion paper on diversity and inclusion in the financial sector where they noted that: “We recognise that the financial sector has taken steps forward on diversity and inclusion. But there is much more that needs to be done to create truly diverse and inclusive organisations that meet the diverse needs of those we serve.”
The paper followed earlier work which had laid bare the financial services sector’s poor record when it comes to diversity and inclusion. Jayne-Anne Gadhia’s 2016 review, for instance, showed that women represented only 14% of executive committee members. The Parker Review, released the same year, meanwhile, found only 80 directors of colour in the whole FTSE250. Meanwhile, the FCA’s Financial Lives research has shown black, Asian and minority ethnic adults are disproportionately represented among the growing number of vulnerable consumers at greater risk of financial harm.
Unfortunately, the Association of Mortgage Intermediaries’ Viewpoint on Diversity, Inclusion and Equity published last October shows the mortgage market is far from bucking this trend. As AMI board member Kevin Roberts wrote in the report’s foreword, the findings “make uncomfortable reading”. One key discovery is that fewer than half (43%) of the 1,178 mortgage industry workers surveyed thought the sector attracts a workforce representative of the UK population. And the proportion was even lower – little more than a third – among women (35%), ethnic minority (36%) and LGBTQ+ survey participants.
A look in the mirror
There are no excuses for this lack of diversity in the sector, but there are reasons. Understanding and addressing these are critical to change, and there are at least three key areas for organisations to address.
The first is unconscious bias, which is more often the cause of a lack of diversity than deliberate discrimination. As ever, the first step towards solving a problem is admitting that you have one. Every industry and everyone has biases, and unless these are recognised and addressed, they will be a barrier to greater diversity, equity and inclusion.
At its simplest, individuals tend to hire those that resemble them – those with a common background, history and education. That will only change by taking proactive steps, such as introducing blind recruitment processes, training in unconscious bias, and a determined effort to recognise and celebrate diverse cultures and backgrounds in the workplace. Businesses must also review the language used internally and externally to ensure it is inclusive – particularly in job adverts.
Embrace your data
Second, organisations need to embrace data and welcome feedback. You cannot manage what you can’t measure, and you can’t chart a way forward if you don’t know where you’re starting from or have any way to track your progress.
Many organisations already record workforce ethnicity and gender, but inclusion goes much further: religion, education background, languages, sexual orientation, age, visible and non-visible disabilities and carer commitments can all be vital. Moreover, organisations need feedback on how diversity, equity and inclusion initiatives are progressing, and on staff views of inclusion and culture. The first will measure how well existing initiatives are working, but the second can suggest what they might still be missing.
Crucially, don’t believe your own advertising. It’s fine to celebrate successes around diversity and valuable to include relevant statistics on websites and shareholder reports. They can help demonstrate a commitment to inclusivity and create a more welcoming environment. But it’s also crucial to admit mistakes and continued weaknesses. Real change rarely comes without transparency.
Each to their own
Finally, it’s important to remember that it is not ultimately about numbers; it’s about people. Inclusivity means recognising and respecting staff as individuals with unique experiences, identities and circumstances – with lives, in other words, outside of work. Team members are more than an employee ID. They are people with personal commitments, challenges, struggles and achievements aside from their employment.
That is why inclusivity goes hand in hand with flexibility and a commitment to a work-life balance. If you can create space for staff to balance work and life, you’ll create an environment where people want to work. Flexible working policies, supportive parental policies, and a commitment to safeguarding mental health will not on their own create a diverse and inclusive working environment, but they are essential to nurturing one.
And because diversity, equity and inclusion are about individuals, there is no single solution. Every business is different because its people are different. Expertise, recommendations and suggestions, such as those in the AMI report, are valuable in informing businesses’ approaches, but each company must find what works for them.
In any case, driving diversity and inclusion must be led from the top. Leaders have a powerful role to play and a responsibility to set the tone, as well as the policies. If they don’t
take DE&I seriously, they can’t seriously expect the workforce to. If they do, however, everyone will benefit – and not least the customers the industry seeks to serve.