Diversity
in Asset Management
Identifying the importance of diversity in financial services in order to create thriving businesses
EXPLORE
Understanding the diversity challenge
‘Why the asset management industry has a choice to make’
Diversity in Asset Management – An overview
For many years, the UK asset management industry has suffered an image problem that contravenes it's declaration to be more 'diverse'. Some would go a step further and define financial markets as an industry where an investment portfolio is, at times, more diversified than the team or firm managing it. This is not, it must be said, true of every asset manager.
How diverse is the UK intermediary market?
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Yet the current notion of diversity in the financial services sector – or lack thereof – must not be dismissed as simply a lazy, anecdotal observation. An array of reports have highlighted a number of issues, from only 6% of CEOs in the UK’s financial services sector being women to more than half of all FTSE 100 company boards having no ethnic minorities on their board. Despite the subject of diversity gaining traction within the asset management industry in recent years, the Diversity in Asset Management report further highlights how much harder our industry in particular has to work in order to improve the diversity of its workforce. Indeed, in spite of the strategic opportunities that diversity presents in terms of business value and profits, many of which are discussed in this report, some firms appear to be behind the curve in adopting even the most basic of diversity initiatives.
This research aims to provide a better understanding of not just where the industry stands statistically on diversity today, but also the range of differing attitudes towards diversity based on respondents gender, age and geography to name a few. The report analyses: • How diverse the asset management industry is today • What financial intermediaries think about the diversity of their industry • If financial intermediaries regard the diversity of an asset manager as an important investment selection criterion • If financial intermediaries regard the improvement of workplace diversity as an important business objective
Diversity: Do clients care?
Why should the industry care about diversity?
Diversity – an optional extra or a foundation for success?
Diverse investments vs diverse intermediaries
CASE STUDY: Pantheon and Gender Diversity Disclosure
CASE STUDY: Legal & General – (LEGIT) Multiple Diversity Initiative
Asset manager case studies
CASE STUDY HSBC Global Asset Management
CASE STUDY Hermes
Using diversity as a foundation for success
CASE STUDY Fidelity
Diversity: Who cares?
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About Incisive Works
This research project was conducted by Incisive Works, the content division of Incisive Media. The research consists of primary data from a quantitative survey of 232 financial intermediaries working in the UK. The key findings of this quantitative survey form the basis of this report. In order to add greater context and depth to the findings, Investment Week conducted a series of qualitative interviews with seven further UK-based asset management professionals and financial intermediaries. The results were combined to create a comprehensive report analysing diversity in asset management.
About this report
The report also highlights some of the firms which have stepped up to the challenge by introducing initiatives designed to promote more diversity in their workplaces. Profiles of initiatives from groups including Fidelity International, Hermes Investment Management, HSBC Global Asset Management, Legal & General and Pantheon Capital Management form a core part of this report. For more information on how this research was conducted, click here.
Ethnically, the make-up of the survey was overwhelmingly white (84%); with the remainder identifying as non-white (11%) or preferring not to say (5%). Equally, a large majority of those surveyed were from outside of London and the South East (53%). The research supports the view that the UK financial intermediary market is lacking in diversity – particularly in terms of gender diversity. In the next section of the report, we will look at whether this low diversity poses a major problem for the industry and what can be done, in practical terms, to address it.
The demographics of our survey respondents reflect the lack of industry diversity as a whole. The gender split of respondents was 82% male and 15% female, with UK financial intermediaries appearing to be overwhelmingly male. The market is a long way from reflecting the split of the wider population – by way of contrast, the most recent ONS figures for the UK population places the proportion of men at 49%, and women at 51%. In addition, men and women do not appear to take on the same type of work in the industry. 44% of male respondents to the survey work as financial advisers. This was the biggest single job segment among male participants. In contrast, just 17% of women identified themselves as financial advisers, with 23% identifying as an investment researcher or analyst. Comparatively, 16% of male respondents worked in this role.
The UK’s asset management industry has mixed views on diversity. For some, there is consensus as to how much work is being done to improve the industry’s image in terms of encouraging a diverse and varied workforce. For others, the outlook for diversity remains broad, spanning from deep pessimism on new initiatives being brought in to encourage diversity, to optimism that change will soon be apparent if the industry continues as it is.
44%
17%
Percentage of respondents who work as financial advisers
What is your gender?
White 84%
Asian or Asian British 6%
Mixed 3%
Black or Black British 1%
Prefer not to say 5%
How would you describe your ethnic origin?
Male respondents tend to be much further along in their career. 42% of male respondents have worked in asset management for over 20 years, yet only 26% of women made the same claim. This could reflect the time delay between the implementation of diversity policies and the downstream effects of those policies on the gender composition of senior personnel.
15%
82%
Male
Female
Other 1%
First of all, the business benefits of diversity are, by their nature, hard to quantify, meaning businesses have to take it partly on faith that improving diversity will make things better. Improving the diversity of one’s business may only yield benefits in the long term, and this could explain why, as a business objective, the improvement of diversity ranked so far behind other business priorities. Intermediaries that do not buy into the business case for diversity appear to perceive it as a 'nice-to-have' rather than as something which can actually support more immediate business objectives. Respondents also appear to view (somewhat mistakenly perhaps) the improvement of their workplace diversity as something which requires a lot of resources. The asset management industry has a choice before it – to do nothing, or to take steps to embrace diversity. Recent regulatory developments such as Gender Pay Gap reporting and the Women In Finance Charter mean electing to do nothing is no longer an option, and is certainly not a longer-term solution. Firms which don’t take diversity seriously already look retrogressive. Given that doing nothing is not an option, what practical steps can asset managers take to make strides towards improving its diversity? The research identified several key areas:
Why the asset management industry
It is far too easy to focus on and cast blame for the lack of diversity in an industry, and it is important the asset management sector does not fall into this trap. 'Stale, pale and male’ as a descriptor has been usefulness in attracting attention, but the industry must move on from that. Discussions around diversity remain positive, promote solutions and share best practices. Events are an opportunity to engage and help raise the profile of what is proving to be an important topic of discussion for a variety of reasons, such as those discussed in this report. Diversity should be about industries working together to determine how we can create better professions, better societies, better governments and better groups overall, where everybody can contribute and everybody benefits. If the industry can tailor the narrative on diversity correctly, everybody wins. It is important too that discussions around diversity don’t cast blame – instead they need to work towards solutions to ensure diversity benefits the industry at large equally.
It’s ‘seeing is believing’ isn’t it? If you see a successful women, then you create the opportunity for other women to be that successful. If you see a successful non-white person, again, the same thing. If you see someone with an obvious disability and they are being successful, you think ‘well, why can’t I do that?’
Rose St Louis, Head of Strategic Partnerships, Zurich UK
The issue of diversity has gained greater traction in recent years, and there is no doubt it is moving up the corporate agenda of firms in the asset management industry. However, this research finds there is a lot more work to be done – particularly among financial intermediaries. The report has outlined several very solid business reasons for why intermediary firms should be embracing diversity, not just as a business objective but also as a criterion within investment selection. At this current time, however, most intermediaries appear not to buy into the business case for diversity, and this report finds a number of reasons why.
Firstly, the industry needs to bring senior managers on board to the diversity challenge, as they are the best-placed people to drive forward changes.
‘The asset management industry has a choice to make’
Diversity: Just a nice to have?
Thirdly, intermediaries also need to realise that diversity initiatives can be implemented without huge amounts of investment – which means it doesn’t need to come at the expense of other, more short-term business priorities. Intermediaries would benefit from examples of best practice on how to improve their diversity in a cost-effective way.
Secondly, intermediaries need to understand that improving diversity is not just a 'nice-to-have'. If done in the right way it creates more diverse and cognitively aware teams and it underpins the delivery of other more immediate-sounding business objectives such as improving profitability and productivity.
Finally, one of the most critical aspects of improving diversity is fostering a culture in the minds of a younger generation that the asset management industry is open to everyone. This would go some way towards correcting cognitive biases which may put some people (women or those from an ethnic minority background for example) off from thinking about a career in asset management.
has a choice to make
In an ideal world, the asset management industry would take steps to increase the levels of diversity simply because it is the right thing to do. Talented people regardless of their gender, ethnicity, and social class should be given the opportunity to compete on equal terms for a role they are qualified for. Yet, understandably, a business’s primary objective is often focused on its clients, generating returns for said clients, and profits for the firm as a whole. As a result, initiatives to encourage diversity can often left behind. Indeed, for many asset managers, a business case to propel diversity to the top of CEO agendas is required.
There are a number of reasons as to why the firms should place diversity at the heart of their business plan and investment processes, as suggested throughout the survey finding.* Caroline Shaw, Head of Fund and Asset Management at Courtiers, believes if the industry can prove diversity adds value, then those in power will have more impetus to embrace it. She argues that, ultimately, what counts in this industry is the business opportunity: "If the evidence proves that a more diverse team delivers superior risk-adjusted returns then businesses will recruit diverse teams," she says.
The rationale for promoting greater diversity in the industry is clear: by making a selection process more inclusive and wider, the industry increases its chances of finding the best individual(s) to fill a specific role. The best individuals can be male or female, white, black, Asian, or from a minority, and state or privately educated. The practicalities of building a business case on this are more complex. Just as buying 1,000 lottery tickets does not mean you will definitely win the jackpot, investing in greater diversity does not mean a business is 100% guaranteed to find the best person for a role. Even if a business does find the best candidate, it may take time before their potential starts to bear fruit, and there is no easy way of accurately measuring the outperformance you are getting from them. Thus, the widening of the diversity net requires businesses to take a leap of faith, be patient, and accept consequences can sometimes be hard to quantify. Another issue with widening the net is that it is only one component of finding and developing the best talent in a business. If success were solely down to having more people to select from, then teams from the biggest countries would always win sporting championships such as the World Cup. Yet Croatia’s recent success as runners-up in the 2018 FIFA World Cup was achieved in spite of the country having half the population of Greater London. China, India and the US – the three largest countries in the world by population – failed even to qualify for the tournament. While having more people to select from makes it more likely that outstanding talent will be brought forward, in practice this isn’t the only component to success, as there are other factors at work. Courtiers' Shaw notes the skill of the management and the way teams interact with each other will also be important to bring the best out of an individual. Gavin Rochussen, CEO of Polar Capital is also very aware of the fact casting a net over a more diverse pool of employees does not always work for a variety of reasons.
Do we need a bigger net to catch more talent?
It is clear from the survey results the industry must work harder at all levels to encourage a wider range of individuals to apply for roles in asset management. In particular, management teams could approach schools and universities to help younger generations realise the industry is open and willing to accept those individuals they deem right for a role. This could help install a generational shift in the industry that in years to come will grow into a more diverse and higher in quality workforce overall. In addition, according to Polar Capital's Gavin Rochussen, if employers want to hire the best individuals across a firm, be that portfolio managers or sales directors, they need to hire from as broad a pool of people as possible.
A second argument for greater diversity that became apparent from the survey results relates specifically to cognitive diversity – specifically hiring people who think differently to each other. Increasing the cognitive diversity of employees has been known to directly correlate with better business outcomes. A greater spread of approaches and abilities enriches the problem-solving skills of the team as well as acting as a check and balance on groupthink. Whether or not they realise it, many businesses are at risk of affinity bias, which explains why individuals tend to gravitate towards people who they perceive to be similar to them. This can result in a company hiring its own image – that is to say, recruiting people who think and work in the same way as they do. This sort of cognitive homogeneity is an issue across industries, as teams of employees who were more cognitively diverse had greater success in solving problems than those who were not during strategic execution exercises done to research this subject matter.
Gavin Rochussen, CEO, Polar Capital
We have just gone through a process of appointing two non-execs to our board. We asked head hunters to bring us an equal number of male and female candidates. But they had a real problem because they had differently sized pools of talent to draw from.
With the business case having been made quite conclusively that diverse teams make better decisions, it is a question of making sure the business case for diversity actually has an impact on intermediaries and the way they work.
Awareness is driven through an entire organisation but actual change is driven by the top: cultural change is driven from the top.
Alexandra Haggard, MD, Strategic Product Management, BlackRock
How do we get a greater diversity of ideas?
*Including qualitative and quantitative findings
Indeed, Alexandra Haggard, MD, Strategic Product Management at BlackRock, believes the industry must make sure it is not simply making a business case for gender diversity alone; because gender diversity is just one aspect of cognitive diversity. Haggard argues firms can talk about diversity of thought easily when talking about the investment process by ensuring a portfolio manager is challenged every time he or she puts an investment idea forward. Those firms that do embrace cognitive diversity have benefitted in different ways. Courtiers’ Shaw, refers to an analyst in her team who had very strong views on vegetarianism as well as religion. The analyst was able to notice key areas of concern when analysing a company that made sausages. She was able to pick up on things that a non-vegetarian wouldn’t have perhaps – matters relating to animal cruelty – and pursued them with the actual company involved. It provided Courtiers with a different viewpoint on the stock, says Shaw.
When the topic of diversity arises in client conversations, financial intermediaries were found to be the drivers of the topic, rather than clients themselves according to the results of the survey. This suggests diversity is not seen as being important by those at the heart of the investment process – the investors themselves. This is something that could change in due course as millennials, one of the fastest growing generations of recent years, enter their peak earning years and become an increasing part of the investment client base. Research has shown this demographic values socially responsible enterprises and cares much more about issues like diversity than the current crop of investors.
If more intermediaries recognise this opportunity, there should be a growing desire for businesses themselves to become more diverse in order to reach a new audience set. Hargreaves Lansdown’s Head of Communications Danny Cox, argues firms cannot use the same thinking as they always have if they are to grow. He believes businesses need to talk to people they haven’t previously spoken to and approach them in a slightly different way. In order to attract a more diverse client base, the starting point must be a more diverse workforce, he says. Changing demographics and generational shifts place intermediaries at a crossroads. Those firms which do embrace diversity are helping to futureproof themselves by making themselves more relevant and more culturally attuned to the clients of tomorrow, not to mention future employees. Those firms which fail to embrace diversity could lose out. Our research suggests the industry is, at present, blind to this possibility. We asked respondents how far they agreed with the following statement:
The results revealed male or middle aged respondents do not believe the current image of the asset management industry’s diversity is off-putting to future clients or employees (or felt they were unsure whether it did). The opposite is true for female and younger respondents, who show far more agreement with the statement. This suggests when speaking to intermediaries about the fact the lack of diversity in the industry could be putting off potential clients and employees, the message may be tailored according to the gender and age of the intermediary; with younger or female listeners more open to your message than those who are older or male Men make up the majority of the UK financial advisory industry and if, on balance, they appear not to be aware future clients and employees are being put off because of the industry’s lack of diversity, they may not see the need to raise the issue. Yet the need to embrace diversity as a business opportunity was an opinion shared by many of our respondents including BlackRock’s’ Alexandra Haggard, who is also a founding member of the Diversity Project.
Firms have a choice before them between embracing or not embracing diversity; but those which choose the latter should note they may face harsher consequences than an uncertain future. The Government’s Gender Pay Gap reporting and additional initiatives such as the Women in Finance Charter have further highlighted how the state is prepared to effectively coerce businesses into showing their diversity statuses. Intermediary firms can no longer remain in the shadows on this subject. Zurich UK’s St Louis notes that if a firm does not have a business case for diversity currently, one will be given to them. Many firms are now conspicuous by omission if they are not on lists such as those mentioned above, says St Louis.
The asset management industry has an image problem, because of its lack of diversity, that is off-putting to potential clients and employees.
Overall respondents tended to agree with this statement, albeit very marginally. But, when responses were segmented by gender and years spent in the industry, a very different story emerged.
Laura Bampfylde, Director, Strategic Partnerships, HSBC Global Asset Management
One of the biggest challenges for the intermediary industry is the lack of diverse young talent in the pipeline. Some firms are offering apprenticeships, for example, in order to attract millennials into their workforce. This makes good business sense because as the next generation becomes increasingly wealthy, they will need financial advice and want their adviser to reflect them, their values, and their lifestyle.
Diversity is a massive business opportunity. Women control a huge percentage of wealth worldwide and just because clients may not be asking intermediaries about diversity at the moment, doesn’t mean men and women are not asking themselves the question. Firms such as Ellevest in the US have used diversity as a business opportunity which is all about empowering women to take control of their financial destiny and investing it in diverse firms.
Strongly agree
Agree
Strongly disagree
Disagree
Neither agree or disagree
Male respondents
Female respondents
Under 20yrs in the industry
Over 20yrs in the industry
The findings of our survey suggest that intermediaries do not perceive diversity as an important investment selection criterion. Less than half of intermediaries (42%) believe it is necessary or important to routinely include diversity criteria in the investment selection process. One-third (32%) said it is not important, with a quarter (26%) remaining on the fence. Furthermore, only 16% of intermediaries always go on to assess the diversity of asset managers as part of their selection process, with a further 22% stating that they only “sometimes” do so. At present, intermediaries do not appear to be discussing the matter of diversity with clients very often either. Only half (51%) believe it is necessary or important to discuss diversity with their client base. Around one-third (33%) feel it is not necessary or important to do so with 16% being unsure. This lack of positive conviction in diversity translates into practice. When intermediaries were asked in the survey how often the subject of diversity came up in the average month of client meetings, 39% said it did not come up at all. Of the 61% who said it did come up, they tended not to encounter it very regularly.
Intermediaries' failure to discuss diversity with clients is particularly problematic given the degree of influence they hold. Our survey finds when diversity comes up in client conversations it’s normally because the intermediary has raised it rather than the end client. In fact, 86% of intermediaries said no clients had approached them about the idea of integrating asset management companies with diverse policies into their investment portfolio.
Why is it that, despite the business benefits which greater diversity can bring, more intermediaries aren't taking it seriously in the context of investment selection? The answer could lie in the degree of value which intermediaries believe diversity generates.
When we asked respondents, “In your view, is an asset manager with diversity policies more likely to generate more value?” 55% said either “no” or “don’t know”.
That presents a significant problem in terms of promoting diversity as an investment selection criterion. If intermediaries do not believe greater diversity correlates with greater value, then what incentive do they have to take diversity seriously? In fact, when the results were segmented, there was compelling evidence for why a belief in the business case for diversity really does matter. The results for the following two questions have been segmented to show what the 45% of respondents that believe in the business case for diversity said, compared to the 24% that do not.
Intermediaries who believe in the business case for diversity are far more inclined to think it is important to routinely include diversity criteria in the investment selection process (72% vs 16%), and far more likely to go on to assess it in practice (52% vs 21%). In order to change intermediaries’ investment behaviour around diversity, they first need to consider how diversity adds value to their business.
In an average month of client meetings, approximately in what percentage of your conversations does the subject of diversity come up?
The value of Diveristy
39%
No conversations
18%
1-10% of conversations
12%
10-25% of conversations
25-50% of conversations
10%
75-100% of conversations
9%
50-75% of conversations
Is the subject of diversity raised more often by you or by your clients?
Have you been specifically asked by clients about integrating asset management companies with diversity policies into an investment portfolio?
45%
Yes
No
24%
Don't know
31%
Do you believe it is necessary/ important for your firm to routinely include diversity criteria in the selection process?
Does your firm assess the diversity of asset managers during the selection process?
86%
7%
Don't know/ not applicable
Not applicable
By my clients
20%
By me
63%
The value financial intermediaries place on diversity as a business objective within their own workplace is debatable. What has been realised from this research is there are a number of lessons the industry can learn in order to implement pro-diversity initiatives as well as ensure they are more effective and positively impact a business. The survey asked respondents to rate the importance of several business objectives to their firms. Respondents could rate each of these objectives as either "very important", "important" or "not very important".
Xxxxxxxxx x xxxxxxxxx xxxxxxxx xxxxxxxx x xxxxxxxxx xxxxxxxx xxxxxxxx x xxxxxxxxx xxxxxxxx
The majority of intermediaries view the improvement of workplace diversity as important, with 60% of respondents rating it as being either ‘important’ or ‘very important’. However, relative to other listed business objectives, ‘increasing the diversity of your firm’ finished as the lowest priority, and this appears to be reflected in intermediaries’ efforts to improve their workplace diversity. When respondents were asked if they were "aware of any of the following diversity measures having been introduced or discussed at your firm?" the results were as follows.
The percentage of intermediaries whose firms have already introduced the above policies is very low, with the sole exception of flexible working policies. And a large proportion of intermediaries didn’t know whether the above measures were being introduced or discussed in their firms. These findings suggest that, although intermediaries think diversity is important in absolute terms, it is not important relative to other business objectives. The fact respondents haven’t made much progress in implementing common types of diversity policies into their firms suggest any purported beliefs in the importance of diversity have not been followed up with significant action. The above table also shows intermediaries rate ‘complying with current regulation/planning for future regulation’ as a top business priority currently. This comes as no surprise given the past decade has seen the industry subjected to an unprecedented number of regulations, including MiFID, the UK Bribery Act, the Retail Distribution Review and MiFID II. This has created more red tape for firms as well as the threat of penalties. There is a suggestion therefore that the burden of regulatory compliance is preventing intermediaries from investing more into improving their diversity. When respondents were asked if there are "any issues that are preventing your business from implementing more measures to improve diversity?" the results showed that resource constraints were the main impediments; thus consistent with the increased regulatory burden of recent years. In the competition for finite resources, the urgency of regulatory compliance is winning out over the improvement of diversity. However, not everyone agrees with this conclusion, believing instead that intermediaries might overestimate the resources required to improve their workplace diversity.
The appetite for improving diversity can be seen in the majority of firms surveyed – 60% of intermediaries rated it as an important business objective. However, if these intermediaries aren’t aware of how to invest in diversity without overstretching resources, the subject will remain on the backburner. It also underlines the importance of sharing best practice with intermediaries. For example, Lansdown last year anonymised CVs to help with gender diversity. Danny Cox, from Hargreaves Lansdown, believes these sorts of initiatives, though relatively small, have the potential to make such a big difference.
We segmented respondents' views on their business objectives according to whether they believe an asset manager with an active diversity policy is more likely to generate greater value or not. Responses of "very important", "important" and "not very important" have been weighted to produce an average score out of 10.
For those who believe an active diversity policy is more likely to generate value, as well as those who do not, ‘increasing the diversity of your firm’ finished as the lowest priority. However, those who do believe in an alignment between diversity and value are more likely to view it as important in the context of their own workplaces. This group also sees the improvement of diversity as being more integral to the achievement of a firm’s other business objectives on the list. That is to say, respondents seem to buy into the idea that if you improve the diversity of your firm, then you are also more likely to deliver on other KPIs. According to Kristina Teahan, Head of UK Retail Client Business, Goldman Sachs, it is a correlation more firms need to start to buy into.
Expanding diversity resources helps but ensuring businesses are open to diversity is most important and that does not cost a penny. Culture, which is within every intermediary's gift, is an opportunity for everyone. Could you throw lots of money at diversity and it create a big impact? Of course. But could you also embrace diversity and spend no money on it at all? Yes, you can.
Danny Cox, Head of Communications, Hargreaves Lansdown
[Anonymised CVs] are the kind of small change which is easy to be thought of as insignificant – until, that is, you start learning from best practice from other people.
Kristina Teahan, Head of UK Retail Client Business, Goldman Sachs
Improving diversity and increasing profitability are not separate issues. A business is going to be more profitable if it hires, retains and promotes the best people.
Do active diversity policies generate greater value?
Case
Studies
Case Study Three
HSBC Global Asset Management’s Next Generation events
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Hermes & Pride Week
Case Study Five
Pantheon and Gender Diversity Disclosure
Case Study Four
Legal & General – (LEGIT) Multiple Diversity Initiative
Case Study One
Fidelity and High-Level Internships
Fidelity’s New Horizons Returnship was launched in the UK in September 2016 as a higher-level internship which acts as a bridge back to senior roles for experienced professionals who have taken an extended career break. These are professionally-paid short-term employment contracts, typically of a three to six month duration, with a strong possibility of an ongoing role at the end of the program. Participants take on work based on their skills, interests and prior experience, obtaining a supported route back to a professional role. Why did you introduce this initiative specifically? In September 2016 Fidelity signed the Women in Finance Charter stating our commitment to have 30% of women in senior roles by 2020, and to report on our progress publicly. The New Horizons Returnship was an initiative aimed at tapping into a talent pool of female professionals who wanted to return to work after a long career break, and, who could with some support enter the workplace at senior levels. This provided us access to a talent pool of women that we were missing out on previously. What challenges did you have in implementing it? There were a few challenges to overcome along the way. Some of the candidates were not able to commit to full-time roles. This required an agile mind set on the part of the hiring manager and recruiter when looking at roles that were traditionally treated as full-time roles, but could be enabled for flexible working in order to retain talent from the returners pool. Candidates were in the main returning mothers so we sometimes witnessed issues with confidence i.e. would they be able to do the job well? Would they be able to manage work and their home life? Had they lost their edge? This is another area where our support coaching proved very beneficial. What successes has your business seen as a result of it? We have seen an increase in hires through our New Horizons program from three hires in 2016 to 13 hires to date. The program has been launched in Dublin in 2018 and we received many applications for two positions, indicating there is healthy demand for job opportunities with organizations who offer well-supported return to work programs. An aspect of the support that is highly valued by all of our returners is the coaching that is provided during the initial short-term contract. The key benefit derived is around confidence building. What lessons have you learned from it that you can take forward and recommend to others? • Having leaders who are advocates for diversity and keen to sponsor such initiatives is key to the success of the program. • Leverage expertise from groups like the Women Returners Social Network.Share success stories internally.
CASE STUDY: Fidelity and High-Level Internships
CASE STUDY
Hermes Investment Management's diversity and inclusion network, Unity, recently hosted the inaugural Hermes Pride Week. Staff across the organisation wore rainbow ribbons in support of 'Just Like Us’ Rainbow Ribbon campaign which works with and supports LGBT+ students in schools. The rainbows served as visible emblems of support for the LGBT+ community across the entirety of the organisation. A signature board in the group's staff café was signed by members of its Executive Committee, Unity and numerous members of staff from Hermes to further demonstrate their support of the LGBT+ community on the 28 June, the anniversary of the Stonewall riots. Members of Hermes staff participating in the JP Morgan Challenge also wore rainbow shoelaces to demonstrate their continued support and solidarity with the LGBT+ community. To further demonstrate Hermes’ support externally, including to clients, the wider market and communities in which they operate, a rainbow Hermes logo appeared across its digital touchpoints for the entirety of the week. Hermes also hosted an event with LGBT Great, a global investment industry network working towards attracting 1000+ LGBT+ people into the industry within five years. Eoin Murray, Head of Investment, opened the event highlighting the value that diverse and inclusive workplaces provide as well as the importance of engaging with companies on diversity and inclusion practices. Peter Hall, Diversity and Inclusion Director of Ocean Partnership, presented at a lunch and learn session with line managers from across Hermes about why diversity and inclusion is good for business, how to create a more open environment and how to embed these practices within the business. Throughout the week, Hermes took to social media highlighting these initiatives as well as our support for the LGBT+ community. What challenges did you have in implementing this initiative? There were no real challenges with establishing the first Hermes Pride Week, and in fact we found a great deal of support and enthusiasm from across the business. However, what did become clear was that some members of staff were unfamiliar with some of the issues face by the LGBT+ community. What successes has your business seen as a result of it? The level of positive feedback we have received both internally and externally has been incredible. In particular, LGBT+ colleagues at Hermes have emphasised not only the visible signs of support from across the organisation, but from individual colleagues as well. Further to this, a member of staff was inspired to join Unity. There has been a much greater level of engagement with members of staff who had previously had less awareness of LGBT+ issues. As a result of our external activity, we have now been invited to participate in an industry roundtable looking at improving the experience of LGBT+ people across the investment industry. Hermes Pride Week has established a platform for future engagement on this topic as well as the wider inclusion agenda. What lessons have you learned from embracing Hermes Pride Week that you can share with the industry? 1. Do not assume a level of familiarity with LGBT+ issues. It is important to educate and provide guidance on the importance of addressing this topic. 2. If you are unsure of how to get started with this topic, start with something small or leverage external activity like Pride Week. 3. Visible signs of support – whether rainbow merchandise, rainbow company logos, etc. – there are a great many ways to demonstrate support and commitment to the importance of this, from the organisational level all the way down to that of the individual member of staff, which helps create an inclusive environment. 4. Ensure you use the momentum to keep the conversation and activity running throughout the year. 5. Be authentic.
CASE STUDY: Hermes & Pride Week
The HSBC Group recognises the importance of driving an inclusive sourcing and selection strategy. The group believes that disrupting the current approach to recruitment in asset management as a whole, together with more consideration given to how and where it sources talent, are significant contributors to the success of diversifying talent pipelines overall. At HSBC Global Asset Management, all employees with responsibilities for hiring and managing individuals have access to a classroom based workshop where participants learn a range of models and techniques that will ensure they complete a fair and effective interview and selection process. In addition, the group started a series of ‘Next Generation’ events that aim to liaise with students from around the UK to educate them on how a career in finance and asset management could be appropriate for them and how they can gain access to the industry. What initiatives have you introduced to support the recruitment of a more diverse work force? An example of how we have sought to improve diversity and inclusion over the past 12 months is through a number of events that HSBC Global Asset Management has collaborated on with members of the Diversity Project. Together, we have launched a series of events that focus on improving inclusion at the early stage of an individual’s career life cycle. The audience remit spans the breadth of schools, colleges, universities as well as the post-graduate community. Some of the more recent events have focused entirely on the university segment. Our mission is to reach a broader range of students whose differing backgrounds and life experiences can help improve diversity of thought within a firm over the longer term. At HSBC Global Asset Management, we believe by hiring a more diversified workforce will better reflect the savers and investors of tomorrow that are at the heart of our business. In running these events we are focusing on hiring from well-regarded universities but want to ensure we are not only targeting top league universities. Indeed, the events are designed to reach universities from outside the top eight the industry typically targets for graduates joiners. For example, in October 2018 we hosted a cross-industry event for a range of students from the University of Birmingham, University of Surrey, University of Glasgow and Queen Mary’s, University of London. The events are largely educational, and aim to encourage students from diverse backgrounds who may not have considered a career in the investment profession to do so. We also aim to provide those who might not otherwise have access to the industry with the message that our door is open to talent from all walks of life. Why did you introduce this initiative specifically? As a global business that operates in markets all around the world, we believe diversity brings benefits for our clients, our business and our people. This is why HSBC UK is committed to being an inclusive employer and encourages applications from all suitably qualified applicants irrespective of background, circumstances, age, disability, gender identity, ethnicity, religion or belief and sexual orientation. For this reason, our events focus on educating individuals about our business, highlighting the range of career opportunities that are available to them, whilst sharing our values and diversity commitments to encourage them to apply for roles in the business in the future. What challenges did you have in implementing it? We acknowledge that it is difficult to challenge the status quo in any large industry and as a business, we are not where we should be in terms of diversity and inclusion. However, it was important we assured both our employees and the audience that through this event initiative we are not participating in this type of activity as a box ticking exercise - to pay lip service to the pressures financial companies may feel to be more inclusive. Indeed, we are firm believers that by working with students from a range of schools and universities from across the UK we are making progress in the right direction and can install long-term change. What are the next steps? Alongside other areas, our educational work stream activities include working with universities to trial events that improve inclusion. As such, we are targeting predominantly university students for whom the industry is new or may have otherwise have been seen as being inaccessible. We also work alongside organisations such as Investment2020 who work with over 3,000 schools across the country to further our messaging in this area. What lessons have you learned from this initiative that you can recommend to others? These events have taken place in various formats since 2016 and we have been encouraged by the feedback and interest we have received. The universities we approach are eager to participate. The event format also allows for full audience participation using event apps for voting sessions, Q&A and wordcloud technology. The information we collect helps to ensure we continuously review our content and improve the experience for guests. As a starting point, we recommend engaging with graduates already at the firm and ask them to tell their story at these events to ensure the content is relatable and honest.
CASE STUDY: HSBC Global Asset Management’s Next Generation events
The Legal & General Inclusion Team (LEGIT) was an initiative to encompass and support the multiple diversity groups across Legal and General Investment Management (LGIM). LEGIT is made up of sub-committees to push the firm forward and help provide support on gender, LGBT, carers, socio-economic, and ethnic diversity issues as well as focus on increasing diversity within the investment profession. Why did you introduce this initiative specifically? Legal & General is committed to increasing diversity and building on our inclusive environment – we strive to be a vibrant business that values inclusivity and embraces difference, where our employees are engaged and empowered to deliver business results by harnessing a diverse set of views, whilst providing a network of communities within LGIM. We regularly hold events and run multiple promotions across the organisation which boost that feeling of inclusion and belonging. The L&GBT network, for instance, brings LGBT and other supportive employees together to put in place initiatives across the company, and across the industry through the Diversity Project LGBT+ workstream. L&GBT coordinates a number of initiatives, including ally and advocate training, lunch & learns, social activities for the L&GBT network and supporters. Most recently, this group held a successful panel event with renowned speakers during Pride Month. At an industry level, in conjunction with the Diversity Project (chaired by Head of Personal Investing, Dame Helena Morrissey), we visited Cardiff University to speak to students, especially young women, who might not have previously considered a career in finance about the opportunities and benefits of working in the investment industry. For companies to remain relevant, it is important that employers continually evolve their strategy to attract, retain and develop a broader, more diverse pool of talent and events like these can make that happen. What challenges did you have in implementing it? Setting up LEGIT required perseverance – we had to explain and persuade colleagues, particularly those who felt we already had an inclusive culture, that we wanted to focus on the diversity discussion, that not only was this a worthwhile endeavour which would benefit the company in multiple ways but most importantly ensure that we were able to deliver material and measurable outcomes. Once the idea had been agreed, there were many different voices in the discussion of what the final initiative would look like. Perseverance and commitment from the Board helped me shape this idea into something fully supported by the business and which promotes culture, inclusion and diversity in a significant way. What successes has your business seen as a result of it? In April, we held our inaugural LEGIT fair, providing colleagues with the opportunity to meet with members of the inclusion team and learn about the different LEGIT networks. The fair was a resounding success, with each network gaining over 50 new members or volunteers each bringing fresh and new ideas. Many sub-committees run mentoring programs, both internally and with external charities. The highlight of our LEGIT calendar is at the end of September when we will be celebrating our first Inclusion Week where there are a number of events hosted by the sub-groups with key speakers from across the industry. We’re also raising awareness of gender diversity with the launch of the first gender-orientated fund to focus exclusively on the UK equity market – the Future World Gender in Leadership UK Index Fund (Future World GIRL Fund). What are the key lessons that have been learned that can be shared with the wider industry? Our main tip is to get involved. Where you see structural problems like gender imbalances, get involved to make a difference. This can mean starting new company-wide initiatives like LEGIT and persevering until you succeed, or joining industry network groups such as Women in Banking & Finance. When joining a new company, ask about their diversity and inclusion policies to make clear that this is an important factor in your decision. Getting involved means that you can tangibly change company policy for the benefit of all. Inertia is not an option!
In 2015 Pantheon made a decision to lead by example and publish firmwide gender diversity data from 1 January 2016. The group believes it is the first private equity firm to make such public disclosure; and the first private equity fund of funds firm to do so as well. Why did you introduce this initiative specifically? Our view was that equality was part of Pantheon’s DNA since the firm had male and female founders, and as such we wanted to showcase our culture. In January 2016 we published our gender data and made it easily accessible on our website. We were certainly an early adopter and our disclosure came sometime in advance of momentum really gathering around gender representation in financial services. Our employees were proud that Pantheon was demonstrating transparency and leadership around this important issue, and many new hires have since commented that our profile around gender diversity influenced their desire to work for Pantheon. Importantly, our clients took note also and representatives from one major Continental European pension plan flew to London to spend an afternoon to learn about implementing best practice from Pantheon. What challenges did you have in implementing it? It was important that our Partners were comfortable with the scrutiny and spotlight that accompanies transparency. They were fully supportive. The main challenge came last year as we set about the data gathering exercise in the shadow of the incoming GDPR framework. This meant that we had to ensure that we were seeking, collecting and storing employee responses in full compliance with the regulation. Happily, our employees were supportive of the initiative, which was conducted on a voluntary basis: the survey response rate was 76% for gender identity data. We also took the opportunity to evolve our annual disclosure to include racial identity data and we were delighted to receive a 75% response rate to this survey. What successes has your business seen as a result of sharing this data? Pantheon has been recognised in a number of awards and surveys. Many of our clients see Pantheon as a leader in gender diversity within private equity, and our positive perception has been helpful in markets where clients have internal policies or where there is sensitivity around gender equality. What lessons have been learned that can be shared with the wider industry? In our view, it is important to demonstrate awareness of and be tuned into issues that are beginning to dominate client agendas, media headlines and policymaking attention. Gender diversity is one of these: Pantheon was able to respond early and positively while showing leadership in data disclosure and transparency around a topic of gathering importance to our stakeholders. We are lucky to have an ethos and management team that is supportive and encouraging of breaking new ground and taking the initiative on issues that concern our clients, so we had a fair wind behind us. We have since evolved our annual disclosure and will continue to do so as clients’ expectations and requirements develop. Personal data is a sensitive area and increasingly challenging to navigate, so it is imperative to be able to show employees why transparency can support business success and to have their confidence that their data will be handled appropriately.
