A high proportion of ethnic minorities in the financial services industry are still experiencing discrimination and, even more concerningly, many businesses are failing to deal with the matter effectively.
In its second annual report on discrimination – ‘Race to Equality in UK Financial Services’ – campaigning group Reboot revealed that 68% of ethnic minorities experienced discrimination in the workplace in the last year, and that 82% faced unwelcome comments on their background.
A further quarter believes that racial jokes are still tolerated in their workplace, suggesting “discrimination is still rife”, Reboot said.
Around half (47%) said they brought up the issue with human resources, however, of those, 75% felt HR was not very effective when it tried to deal with the problems.
In turn, those who faced discrimination said they have come under greater scrutiny by their managers (52%) and that colleagues started treating them differently (48%) as a result of speaking up.
As a result, around half (44%) were forced to take time off work and a similar number had to seek counselling because of their negative experiences in the workplace.
Breaking away from the ’status quo’
Dimple Mistry, co-chair of the race and ethnicity workstream at the Diversity Project and Reboot ambassador, said: “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, added: “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.”
The report also found that discrimination doesn’t just stop at behavioural problems.
Almost half (44%) of respondents said their career progression has been slower than their white peers, as 32% believe they do not have the same opportunities as their white colleagues.
Respondents said this is partly fuelled by a lack of ethnic minority representation in senior management, preventing progression and forcing them to switch jobs.
More specifically, 40% said they are likely to search for a new role within the next six-to-12 months, with 9% blaming their organisation’s discriminatory culture for the potential move.
Nearly half of leaders (46%) are aware of these issues and that the lack of ethnic minority representation in financial services is hindering career progression, Reboot found.
Noreen Biddle Shah, founder of Reboot, said: “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.”
Reboot’s report did recognise that progress is being made in the area of diversity, equality and inclusion (DE&I), but most efforts seem to be concentrated on targeting gender disparities.
Most (81%) respondents felt their company was actively promoting an inclusive and diverse workplace, with 69% acknowledging their organisation’s recruitment efforts. But 58% believe leaders are prioritising gender as many are still uncomfortable when race becomes part of the conversation.
This is mirrored in the number of white colleagues who want to be allies (60%), but 22% are not comfortable talking about race at work.
Lindsey Stewart, director of investment stewardship research at Morningstar and Reboot ambassador, said: “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, added: “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.”
Arun Kelshiker, vice-chair of the CFA UK’s diversity, equity and inclusion committee and Reboot ambassador, said: “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’.”