New research shows that a high proportion of ethnic minorities working within the financial services industry are experiencing discrimination and concerningly, some businesses are not dealing with this effectively, according to a survey conducted by Rebootand Coleman Parkes.
The latest findings show that seven out of ten ethnic minorities (68%) have experienced discrimination at work in the last year and eight out of 10 (82%) have experienced unwelcome comments based on their background.
Furthermore, a quarter (25%) of survey respondents believe that racial jokes are still tolerated where they work suggesting discrimination in the workplace is still rife.
This is the second successive year of the Race to Equality in UK Financial Services report by Reboot – a campaign group of senior financial services professionals working to maintain the dialogue on race and ethnicity in the workplace. The survey is based on 800 people working in financial services roles with a minimum of 10 years’ experience in the industry.
Fear of Reporting Race Discrimination
Worryingly, ethnic minority employees do not feel comfortable reporting discrimination to their Human Resources (HR) departments. For instance, around half (47%) of ethnic minority survey respondents who have faced discrimination, say they have raised issues with their HR team and of those, three-quarters (75%) felt HR was not very effective at dealing with these issues.
In addition, those who have experienced discrimination say they have come under greater scrutiny by managers (52%) and colleagues have treated them differently (48%) for speaking up.
This is having a direct impact on businesses. Almost half (49%) of those respondents experiencing discrimination over the last year say they had to take time off work and a similar number have had to seek counselling to help recover from all the negativity in the workplace (56%).
Dimple Mistry, Co-Chair Race and Ethnicity Workstream at Diversity Project and Reboot Ambassador, commented: “Given my professional background, there is a call to action for all HR professionals to come together, educate themselves and create safe channels for staff to approach them, and for matters to be taken seriously when raised. I recognise that this is a journey that does not stop, this requires us all, no matter what your background, to come together to consciously work towards creating a truly inclusive industry and workplace cultures that enable professionals from an ethnically diverse background to feel a strong sense of belonging and thrive wherever they are.”
Hannah Grove, Reboot Advisory Board Member and Non-Executive Director, commented: “We simply cannot afford to allow these findings to persist. We all need to challenge ourselves to do better, to be allies that speak up and act, and to change the narrative. These stark findings are bad for society and business and mean that we’re perpetuating systems and practices that keep a significant talent pool from achieving their full potential. The cost of status quo is way too high and success – or failure – will impact us for generations to come.”
Ethnic Minorities say their Careers are not Progressing at the Same Rate as White Peers
The research shows that almost half (44%) of ethnic minorities say the speed of their career progression has been slower than that of white peers. Furthermore, one in three (32%) respondents feel they do not have the same opportunities as white colleagues.
Furthermore, a lack of senior representation is preventing ethnic minorities progressing at work and prompting them to switch jobs. For instance, four out of ten (40%) ethnic minorities say that they are likely to search for a new role in the next six to 12 months, with one in 10 (9%) of these people blaming their organisation’s discriminatory culture for a potential move.
This is something that appears to be on financial services firms’ radars as half (46%) of leaders recognise that the lack of ethnic minority role models within their organisation hinders career progression.
Noreen Biddle Shah, Founder of Reboot commented:“This year’s results are concerning – from the amount of discrimination ethnic minorities are experiencing, the lack of representation in senior roles, to a continued discomfort to speak about race in the workplace. We need to understand the issues raised in the latest report so that we can work together to drive positive change and create more inclusive working environments for people working within the financial services industry.
“It is fair to say most individuals believe in a fair and diverse workforce, but the systems in which they operate are flawed and we need to find a way to make real changes and measure the impact. We also need allies and leaders to speak up to help normalise what is still sadly so taboo.”
Progress is Being Made in Diversity, Equity & Inclusion (DE&I), but the Focus is More Gender than Race and Ethnicity
The survey suggests that there has been some progress improving diversity in the financial services industry over the last year. For instance, eight out of 10 (81%) people feel that the company they work for is actively promoting an inclusive and diverse working culture.
However, while seven in 10 (69%) acknowledge their organisation’s efforts to be more diverse when recruiting, some feel that leaders prioritise tackling gender (58%) as they are still uncomfortable tackling race issues. This is having a knock-on effect across the workforce as while white peers want to be advocates for ethnic minority colleagues (60%), a fifth (22%) feel uncomfortable talking about race in the workplace.
Mary FitzPatrick, Global Head of Diversity & Inclusion at Rolls Royce and Reboot Advisory Board Member, commented: “Despite all the conversations that were initiated after the murder of George Floyd, its disappointing to see that many people still feel uncomfortable talking about race. We all need to share our lived experiences, stories that resonate with others, so we feel more connected, and we understand how otherness makes us unique. We need to really listen and then ask questions. Knowledge brings understanding and empathy.”
Sonja Laud, Chief Investment Officer, Legal & General Investment Management, commented: “The second year of publishing the “Reboot – Race to Equality” report continues to create a moment in terms of the spotlight, attention and focus on a much-needed conversation and the actions that underpin more inclusive workplaces. LGIM continues to believe that supporting people on their career journeys is key to this. Inclusion is made up of many different everyday actions to help everyone grow, develop and reach their full potential, within our own firm and the wider industry including recruiting, retaining and advancing talent from Black, Asian and other ethnic groups; and helping individuals thrive. There are reasons to celebrate, but equally there is more to do to create positive change.”
Lindsey Stewart, Director of Investment Stewardship Research at Morningstar and Reboot Ambassador, commented: “There’s been a huge focus on culture and the workplace this past year. Who hasn’t heard about ‘quiet quitting’, ‘The Great Resignation’, ‘The Great Reshuffle’ or ‘The War for Talent’? Well, if there’s a war for talent, many financial services firms are clearly still turning up unarmed. Creating an inclusive culture is a key talent retention factor, a strategic advantage, and a governance imperative. In a sector famed for its ability to handle complexity, firms that aren’t taking a 360-degree approach to DE&I – covering race, gender, and diversity in all its forms – risk not only putting their employees’ future prospects at risk, but also those of their business as a whole.”
Richard Lacaille, Global Head of ESG at State Street and Reboot Advisory Board Member, commented:“Creating a more diverse and successful financial services industry is imperative for the UK post-Brexit, and we need to look hard at this report and take the necessary steps to achieve this goal. This includes all of us not shying away from talking about race, and leaders ensuring that inclusion, diversity and equality is not simply delegated to the HR department. Business leaders need to ensure that ethnic minority staff in their enterprises or departments are not facing the discrimination and other negative experiences identified in this year’s Race to Equality report.”
Oliver Bilal, Head of EMEA Distribution at Invesco, commented: “Our industry should take these findings very seriously. An equal opportunity to progress is not only morally right, but a cornerstone of good business practice and key to creating a dynamic, productive workplace.
“However, while we all may agree on the nature of this problem, it will only be solved through action and accountability. In our view, equality of opportunity should be embedded in the institutional structure of an organisation, which is why we advocate tying diversity and inclusion progress to the annual performance goals of senior leaders and their teams.”
Madeline Forrester, Head of Global Consultant Relations for MFS Investment Management and Reboot Ally, commented: “The findings of this survey mark a watershed moment for our industry. The deep-rooted issues around race and ethnicity are plain to see. We must take decisive and swift action to improve the representation and experience of ethnic minorities in financial services. It’s not just about attracting new talent. It’s about having an inclusive workplace that values all employees, fosters a sense of belonging, and creates a supportive culture for people to thrive.”
Arun Kelshiker, CFA, Vice-chair CFA UK’s Diversity, Equity and Inclusion Committee and Reboot Ambassador, commented: “When a fifth of white peers feel uncomfortable talking about race in the workplace, we’ve got a fundamental problem impacting everyone. This needs fixing. Diverse, equitable and inclusive environments are core building blocks for societal well-being and allyship is a key responsibility. For all within our financial services community, uncomfortable conversations are necessary; ‘if we choose not to be part of the solution, we are part of the problem’.”
Leanne Mair, CEO at Benefactum Consulting, commented: “We are moving in the right direction, but seem to be cruising rather than accelerating. While the financial services sector is throwing its support behind gender equality, it’s failing to look at the intersection of gender and race. Without changing course, the sector risks perpetuating the damage it is seeking to undo.”
Shekhar Karia, Managing Director, Co-chair Multicultural Network EMEA, TP ICAP and Reboot Ambassador, commented: “The commercial advantages of increased diversity are undisputable, yet it still feels like an uphill battle to break the glass ceiling given the lack of representation within senior leadership in organisations.”