# WomenInFinance Build New Pipelines
I often hear when it comes to hiring more women and people of color that the financial services industry has a “pipeline problem.” To which that I say – I don’t think so. Or at the very least, it’s not entirely true. Maybe your pipelines don’t include a multitude of women and underrepresented ethnic groups, but it’s likely because your approach to building, growing and developing those pipelines needs to change. If we take a look at where and how financial services recruits, it becomes obvious that the approaches we take and places we recruit from year after year don’t change. Our pipelines tap into the same schools, the same communities and the same partnerships of outside organizations they always have. Of course these hiring efforts are inherently unsuccessful because we can and do find incredibly talented new hires in those pipelines. However, to ensure that the development and retention of great talent is strong, we must address some foundational forces that make building a diverse pipeline more difficult.
We have decades of conscious and unconscious bias, among other behavioral norms, which have hindered the entry of diverse talent into our hiring pipelines for years. Whether it’s because the financial services is historically a male dominated industry, and therefore men are recruited and promoted at higher rates than women, or the fact that both men and women of other ethnicities may not choose, or even see, financial services as a viable career path, the numbers don’t lie. We have enough history and data to show us that our pipelines just aren’t robust with diverse talent. And it’s time to change that.
When it comes to building or finding new diverse talent pipelines, the key is to be open and nimble in what you’re looking for. We create roles based on skillsets, pedigree and on-paper experience, but that can trap us into a mold that doesn’t allow for diverse applicants to excel, nor is it realistic. I learned a long time ago that we write job descriptions as wish lists. No one on any team is that perfect candidate if we measured their day-to-day against the job description. In reality, the role often changes, the team changes or the new hire ends up being valuable in ways no job description could ever capture. We conveniently forget all employees and candidates have career and individual development needs, so expecting our hires have all the required skills/credentials right out of the gate keeps us from looking at great talent that could be exactly what we need once as they get good, old-fashioned, on-the-job training.
I learned a long time ago that we write job descriptions as wish lists.
There is also a lot of discussion in the industry about “Cognitive Diversity,” also known as diversity of thought, and how having differences of perspectives and opinions drives the success of a team or company. When evaluating a potential new hire, we shouldn’t just grade them on how alike they are compared to those already on the team, but on how their experience and background brings different perspectives to the role. As organizational psychologist Adam Grant said in an interview to Forbes, “…stop hiring on cultural fit. That’s a great way to breed groupthink. Emphasizing cultural fit leads you to bring in a bunch of people who think in similar ways to your existing employees…hire on cultural contribution. Instead of looking for people who fit the culture, ask what’s missing from your culture, and select people who can bring that to the table.”
It’s also important companies not just focus on hitting some diversity target in the next three or five years. We should look at building a pipeline as a long-term relationship. Are we going into high schools and colleges and championing the financial services industry as a place where women and people of other ethnicities can succeed? According to a 2017 Glassdoor report, men accounted for 61.5 percent of degrees in finance. Plenty of women eventually find their way to finance (51 percent of all positions are held by women), but it may not always be where they envisioned themselves ending up, and most rarely make it to top business leadership positions (the exception being female-driven career paths like HR, Marketing or Communications). In 2015, only 28 percent of professional positions in financial services were held by minorities, as reported by the US Government Accountability Office. A new survey from the CFP Board Center for Financial Planning found that less than 3.5% of all the 80,000 Certified Financial Planners (CFPs) in the United States are African American or Latino, and that 58 percent of African American and Latino prospective financial planners have never seriously thought of becoming financial planners. Why are so few women and people of color actively pursuing careers in finance from a young age? Part of it is a major lack of opportunity and exposure from our industry. For us already in the industry, we should play a role in changing this.
In a prior role working at another financial institution in New York City, I brought my 10-year-old nephew to visit and spend “a day in the life” on the trading floor. He sat next to a head trader with a phone to his ear listening to trades being made all day and watching the Bloomberg screens show market activity, among the other dynamics of a trading floor. While the terms and language were unfamiliar, at the end of the day he thought our head of trading had “the most amazing job… and it’s like he plays video games all day.” While we know trading at an investment bank is much more than just screens and fast moving action, that experience gave my nephew a perspective of the industry that he likely would not have received in a classroom.
I personally believe that financial services is the core of everything in our world. Our industry links all other industries and by providing a new pipeline of talent the opportunity to understand how we serve customers, clients, how we make and put money to work can have a major impact on how socially and economically responsible we are and how others see us. We should aspire to change the narrative of the financial services industry away from just being about making or losing money. Instead, it should be about becoming a steward for our communities, shaping the way the world grows, impacting every human on the most fundamental level. If we look at financial services in a different way and our role in the world, we’ll start taking our approach to building, growing and maintaining a strong and sustainable diverse talent pipeline differently for our industry as well.
1. Schawbel, D. (2016, February 02). Adam Grant: Why You Shouldn't Hire For Cultural Fit. Retrieved from https://www.forbes.com/sites/danschawbel/2016/02/02/adam-grant-why-you-shouldnt-hire-for-cultural-fit/#33894e797eba
2. Chamberlain, A., & Jayaraman, J. (n.d.). The Pipeline Problem: How College Majors. Retrieved from https://www.glassdoor.com/research/app/uploads/sites/2/2017/04/FULL-STUDY-PDF-Gender-Pay-Gap2FCollege-Major.pdf
3. Financial Services Industry: Trends in Management Representation of Minorities and Women and Diversity Practices, 2007-2015. (2017, December 08). Retrieved from https://www.gao.gov/products/GAO-18-64
4. Eisenberg, R. (2018, June 13). Why Minority Financial Planners Are Nearly Nonexistent -- And How To Fix It. Retrieved from https://www.forbes.com/sites/nextavenue/2018/06/12/minority-financial-planners-nearly-nonexistent/#626b32acd9cb
Kem Danner is the head of Human Resources and Senior Vice President for State Street Global Advisors and is a member of the State Street Global Advisors Executive Management Group (EMG). Between work and hobbies, right now most of her free time is spent training for her 5th marathon.