While financial firms put ‘a lot of energy’ toward diversity, results mixed

By John Hilton

Two employment trends are running concurrently in financial services: intense competition for talent and a industrywide push for diversity.

The state of both is a mixture of good and bad, said Chip Roame, founder and managing partner of Tiburon Strategic Advisors.

"The war for talent seems like it's alive and well, likely to continue, maybe not for the mediocre employee, but certainly for the high-level employee, and DEI efforts seem like they're going to continue," Roame said during a recent webinar. "I might not be as optimistic as a typical Tiburon member, but there is a lot of energy behind DEI efforts for both women and for minorities."

The numbers are up

Industry efforts to recruit women and people of color are returning immediate and rather dramatic results, according to data Roame shared. Women, in particular, are breaking through. From the advisor role all the way to the CEO chair, the numbers of women in these roles is up sharply.

Roame shared a quote from Cheryl Nash, CEO of InvestCloud Financial Supermarket:
“We are seeing more emphasis and programs to bring women into the financial services industry."

Likewise, participation is up across the board for minorities as well, Roame said. In fact, taken together, 58% of the total employees in wealth or investment management are either minorities or women. But a closer look reveals that the number is a bit hollow.

"That sounds terrific on the surface right?" Roame asked. "Fifty-eight percent of the employees in wealth and investment are women and minorities. That's a celebration graph. But now ... here's the problem. The vast majority of them are in administrative roles and analyst and associate roles."

Home offices here to stay

A big perk financial services can offer prospective employees is the work-from-home option. Introduced by the COVID-19 pandemic, a lot of companies integrated home work for good, while others are trying to bring employees back to the office.

It's a tricky situation, Roame acknowledged. In a tight labor market many employees are highly attracted to the home-work option.

Financial firms are acquiescing to these preferences, Roame noted. For example, Facet Wealth, a Baltimore-based firm, went from a 33% remote workforce in 2018 to 100% since the pandemic. Still, Roame shared an interesting view on the general employee-employer relationship from Facet CEO and co-founder Anders Jones:

Prediction time

Roame closed with two predictions:

War for talent will remain strong, but might lesson just a bit.
The focus on diversity, equity and inclusion (DEI) will ramp up even more.

The talent chase is just a reflection of the transitioning workforce, Roame noted. Citing CareerArc data, he noted that 23% of all American workers say they plan to resign their job sometime in the next 12 months.

Not surprisingly, 89% of employers responding to a CareerArc survey said they expect recruting and hiring to remain challenging in the next 12 months. Tiburon members quoted by Roame were more bearish on future workforce options.

On DEI, 66% of Tiburon CEO Summit attendees said their firm has "a specific diversity program." Members agreed that growing a more diverse workforce is not just lip service for financial services.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.