Plus Ça Change

For decades now, the call to hire, retain and promote a diverse workforce has been heard inside Library in luxury home with marble fireplace many U.S. and global companies. The reasons are pretty self-explanatory: the more diverse the workforce, so the theory goes, the more likely a company is to benefit from broader, nuanced perspectives and experiences. In December, 2013, Harvard Business Review published findings from Sylvia Ann Hewlett, Melinda Marshall and Laura Sherbin of the Center for Talent Innovation that quantify the impact of “2-D” diversity on gains in market share and entry to new markets.

Such data backs up the logic driving the move by forward-thinking companies to make themselves truly diverse. One would expect that most companies – especially the marquee ones – are well along the path of diversity. After all, the reasons are self-explanatory.

Not so fast.

Vettery, an online recruiting company, just released a study analyzing new hires at the top investment banks. What they found was staggering. When it comes to the 2014 of new investment bankers, known in their first rotation as analysts, 77.5% of them are male. 77.5%.

Additionally, 65% of this year’s total analyst class are white, 29% are Asian and 6% are African-American or Hispanic.

Not very diverse, huh?

How should one interpret these dismal numbers? As an indication that women and minorities are not interested in investment banking? That they stink at financial analysis? That they hate fields focused on money?

The answer to each of these questions, in all probability, is no.

I believe that what these numbers indicate, based on my own experience in financial services and work with diversity organizations, is that there is still a “club” atmosphere in the highest profile and highest profit sections of financial services. A world built partly on brains and partly on relationships. A world where the amounts of financing are sometimes so dizzying that it’s easier to go with what is tried and true than with what requires progressive thinking. A world where constancy can overshadow innovation.

At a period in human history when micro-financing is creating small revolutions in the lives of the diverse poor everyday, the paucity of diversity in the ranks of super bankers is stunning.

It also is a bad business move. Diverse companies, according to the Center for Talent Innovation, report 45% growth in market share year over year and a 70% greater chance of capturing a new market. What could possible be the benefits of maintaining the “club” when compared to these results?

Granted, it does take time to change cultures. Yet many industries have faced the same challenge and succeeded in making strides. It seems that only financial services and the notoriously male dominated (but ethnically diverse) tech field are achingly slow to catch up. Better to play catch up now, though, or else the realities of parochial thinking will catch you in the end.

Maybe it’s time to close down that dusty, old club.









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