Over the past several years, many financial industry leaders have come to realize the importance of promoting diversity, equity, and inclusion initiatives – otherwise known as DEI. Many well-meaning practice leaders are adopting these initiatives. However, since most advisors aren’t experienced in the realm of recruiting and retaining talent, they often fall short of fully implementing hiring and retention strategies that create a diverse and inclusive team.
What Do They Mean By Diversity, Equity, and Inclusion?
First, it is helpful to define what is meant by diversity, equity, and inclusion. According to CFA Institute’s definition of DEI, diversity is “the spectrum of human attributes, perspectives, identities, and backgrounds while inclusion is a dynamic state of operating in which any individual or group can be and feel respected, valued, safe, and fully engaged.” In the practice, “workplace diversity” refers to the variety of differences represented among the people in an organization. With this understanding we can then identify the benefits of such an approach and how to use it to hire and retain a diverse workforce.
The Benefits of Workplace Diversity.
Having a diverse team in your practice is critical for several reasons:
- It Fosters Innovation: Financial advisory practices that adopt inclusive cultures are more open and innovative. Input from diverse groups mitigates the risk of groupthink and lets advisors and their teams explore fresh perspectives and ideas that can lead to real breakthroughs.
- It Ensures Client Representation: Client demographics are changing. Not only is a great transfer of wealth taking place, shifting wealth to women and younger generations, but the demand for financial advice has also grown among historically underrepresented minority and cultural groups. Practices that foster diversity, equity, and inclusion understand the importance of responding to changing client demographics with a more diverse professional team that represents and can relate to clients from all walks of life. A diverse team also brings broader language and cultural awareness, allowing advisors to better connect with clients in meaningful and respectful ways.
- It Improves Competitive Advantage: Not only does diversity, equity, and inclusion policies allow practices to serve potential and current clients better, it also allows advisors to better compete for top talent. Looking beyond the “typical” candidates to a more diverse group allows advisors to tap into valuable talent that other firms may overlook. This will result in having access to a broader range of talent and experience which can help drive strategy and execution at all levels of the practice.
Knowing the benefits a DEI approach can bring to the practice, advisors must then take steps to ensure that both their hiring and retention strategies truly promote a diverse, equitable, and inclusive work environment.
Integrating DEI Into Your Recruiting and Hiring Strategy
How you source and interview candidates have a significant impact on your ability to recruit a diverse team. It’s also the first interaction a prospective employee has with your company. How you handle the interview process tells a recruit a lot about how diverse and inclusive your practice culture truly is. Here are a few things you can do to ensure you’re setting the right tone and facilitating a DEI centric hiring process:
- Give Your Self Time: Avoid feeling rushed by the pressure to fill a position quickly. Instead, slow down and give yourself the time necessary to source a diverse group of candidates.
- Check Bias: Everyone has both conscious and unconscious bias that can come into play when evaluating candidates. Acknowledge this fact and take care to navigate your bias when sourcing candidates. It helps to have another person assess your perceptions to ensure they are about character and qualifications, and not due to any personal prejudice or preference.
- Talk Culture: Offer candidates the chance to ask questions about your company’s culture during the interview process. This will allow them to get a sense as to how diverse and inclusive your team is and if you are truly open to receiving people of different backgrounds and points of view.
- Use Diverse Interview Teams: Diversity needs to happen on both sides of the interview process. Having diverse teams involved in reviewing candidates further ensures that unfair biases are surfaced and mitigated and demonstrates to candidates that you value DEI in all aspects of the workplace.
- Look For Ways To Improve: Whether a candidate becomes an employee or not, it’s good to solicit feedback from candidates during the hiring process. Be sure to ask questions related to DEI items so you can find out from the candidate’s eyes if you are hitting the mark with your DEI hiring strategy.
Integrating DEI Into Your Talent Retention Strategy
Hiring a diverse talent base is only the first step. The key to fully implementing DEI in the workplace is to weave DEI philosophy into every aspect of how you operate, including in your talent retention strategy. This is especially important in the current market where competition for talent is fierce, and employees are continually offered opportunities from other firms. Here are a few tips to help you stay competitive and retain a diverse workforce:
- Foster Open Communication: A policy of open, honest, and consistent communication develops trust and stronger relationships between employees and leadership. This approach makes it safe for diverse groups to speak up when certain practices aren’t inclusive or equitable and ensures that the organization is receiving different points of view. As communication improves within the workplace, employee diversity and inclusivity increases, creating a culture that welcomes a wide range of talent into the fold.
- Celebrate Diversity: Celebrating diverse cultures and holidays further promotes a feeling of inclusivity for staff with different backgrounds. They also provide opportunities for other team members to learn about cultures and traditions that are different from their own. This builds trust, connection, and understanding among team members – a hallmark of highly functioning teams.
- Make It Formal: Having a formal initiative along with a person or committee responsible for executing and maintaining DEI in the workplace further ensures that DEI practices are integrated into every aspect of practice operations. It also signals to the team that leadership is serious and committed to building and maintaining a diverse and inclusive organization.
These are just a few examples of what a practice can do to ensure a diverse, equitable, and inclusive talent hiring and retention strategy. Firms who do employ such a strategy will see marked improvement in their competitive advantage as well as in their ability to attract and maintain a diverse and growing client base. However, many small and even some mid-sized firms lack the infrastructure and knowledge to fully implement a DEI hiring and retention strategy. In those situations, its useful to leverage a third party who has the knowledge, proven process, and network to source a diverse talent pool and facilitate a DEI centric recruiting and retention program for your practice.