Black employees held a lower share of top financial services jobs in the United States in 2018 compared to more than a decade earlier, according to a new Financial Times study, highlighting the shortcomings of Wall Street’s long-standing efforts to improve. racial diversity.
The FT analyzed the most recent anonymized data available on the demographics of 3.6 million employees among 13,000 financial services employers in the United States from 2007 to 2018. All companies with more than 100 employees were required to submit the information to the Equal Employment Opportunities Commission from 2007..
Black staff make up 13% of all finance staff and constitute the largest ethnic minority in the sector. But in the top jobs, they’re the only demographic whose share fell from 2007 to 2018, research shows.
The drop – from 2.87% to 2.62% – comes against the backdrop of multiple initiatives by financial services companies aimed at improving racial diversity by identifying, training and mentoring talent from ethnic minorities.
“It begs the question of all the effort and energy that went into it: ‘what are they doing and why is none of this working?’ ‘Said Dee Marshall, Managing Director of Diverse & Engaged, a diversity consultancy that focuses on financial services.
“If you are wondering why there is no progress [for black staff], look at the hiring, look at the payroll, look at the performance review process. ”
Overall, data from the EEOC showed that black employees only experienced significant growth in the most menial roles in finance, a group that makes up 42 percent of the total workforce. of the sector. Black employees now represent 18.9% of these younger jobs, up from 17.4% in 2007.
Separately, the FT compiled figures from 20 major US financial services firms that publish their submissions to the EEOC, including Citigroup, JPMorgan Chase and American Express. This research found that several institutions had made much faster progress than the general trend.
Of the 20 companies whose data was analyzed by the FT, PayPal had the highest percentage of non-white workers in managerial positions, at 33.7%. Goldman Sachs had the highest percentage of non-white workers in mid-level roles, at 44.1 percent. The 58.8 percent of PayPal’s non-white workers in professional positions were also the highest non-white representation in this category.
BNY Mellon had the highest percentage of black personnel in senior roles, at 11.8 percent; PNC had the highest percentage of black personnel in mid-level roles, at 9.5 percent; and insurer MetLife had the highest percentage of black staff in professional roles.
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Travel insurers were the worst for non-white representation in all three categories, and its numbers were significantly worse than the image in the financial services industry.
Diversity and inclusion is a “business imperative,” travelers said. “While the EEO-1 data only paints a limited picture, we understand that we and the business community have a responsibility to improve representation.”
The industry-wide chart showed that while non-white staff increased their share of all seniority levels over the 11-year period, progress has been very uneven. White employees continue to enjoy a disproportionate percentage of the top jobs.
Across the industry, advances at the top, middle, and professional levels have been overwhelmingly in favor of Asian workers, the third largest minority in finance after black and Hispanic workers.
As a result, there are now more Asian executives and executives than blacks, even though there are about 50 percent more black workers than Asians in the overall financial services industry in the United States. United.
“The internationalization of Asia and Latin America and the financial opportunities that are offered there allow Hispanics and Asian Americans to have an easier place in this sector,” said Martin Davidson, professor. of Business Administration at the Darden School of Business at the University of Virginia. who also consults with Wall Street companies on diversity.
Davidson added, “That doesn’t mean that things are wonderful for Latinos and wonderful for Asian Americans, because there are significant challenges for these people as well. ”
Asians are the only ethnic group with the smallest representation in the most junior category, according to the analysis. For all other ethnic groups, their highest representation is at the most junior corporate level.
Several companies told the FT that they did not disclose their EEOC data because the categories used did not give an accurate representation of their workforce.
Investors said the data was an important metric because it offered a comparable view of how companies performed in relation to each other. They were increasingly pushing companies to publish details of their workforce demographics.
“Without this comparability, investors have a hard time understanding who is a leader and who is lagging behind,” said Adrienne Monley, head of investment management for the $ 7.1 billion Americas, the manager of Vanguard assets.
“We believe that asking you to report EEO data is a rational request, it is not a huge amount of additional resources required and it is a great first step. . . Companies that do not disclose this information will likely experience more pressure from investors in the coming year. ”
Lobbyists said it was impossible to tackle the problem of under-representation without properly measuring the extent of the problem. “We’re talking about why we’re not going anywhere, but we don’t know where we’re going, because you’re not following,” said Marshall of Diverse & Engaged.
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