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It’s no secret that the banking industry has long dealt with issues surrounding diversity and inclusion. But with more pressure than ever to build diverse teams, some of America’s largest banks are now taking unprecedented measures to increase diversity at their organizations.
In June of 2020, Wells Fargo told executives that their year-end bonuses would be directly tied to how much they increased diversity among their teams. This is only one example of many steps that banks have taken to create diverse workforces. We have a few thoughts on how Fortune 500 banks, community banks, and regional banks alike can recruit underrepresented banks and build inclusive cultures.
1) Get Buy-in Across the Organization
Paying people to increase diversity among their teams is one way to address the issue, but we’re not convinced it’s necessarily the most effective. A better long-term solution is getting banking leaders’ full buy-in to a D&I initiative.
One of the biggest reasons why D&I initiatives fail is because we don’t communicate why we are making the changes. People often resist change, especially if they don’t understand why the changes are happening.
If you’re starting a new diversity initiative, it’s crucial to speak to the tangible, direct benefits to your bank. Show leaders’ the facts on how diverse teams are often more profitable, more innovative, and more likely to succeed.
To get leaders committed to improving diversity at your bank, you must make sure they understand why it’s important to the business.
2) Rethink Professional Development
Banks can fall into the trap of thinking of professional development in very linear terms. Consider offering more opportunities to entry and mid-level team members by letting them try new responsibilities, even ones that are completely unrelated to their current role.
Invest more in reskilling and upskilling existing employees. Offer chances for team members to volunteer a few hours a week in different departments. Half the battle with diversity is not just recruiting underrepresented professionals but encouraging them to stay with career mobility and opportunities.
3) Source Candidates From Outside the Industry
It’s hard to recruit for diversity when the banking industry as a whole is relatively non-diverse. According to a recent report from the U.S. House Committee on Financial Services, only 6% of entry and mid-level banking leaders are Black or Latino. That number drops to 4% for senior and executive banking leaders.
One solution here is to critically rethink what skills banking leaders need from someone on their first day and what skills they can train. Banks need to look at other, more diverse industries and identify candidates who may not have banking experience but have relevant skills pertinent to our needs.
Step back and look at what results someone needs to deliver, then define what skills or experience someone needs to deliver that. Just because someone doesn’t fit the standard banking job description doesn’t mean they can’t excel on your team.
Diverse Banks Will Win
Study after study has shown that diverse teams are more innovative, better able to serve their customers, and drive more revenue. As America grows more diverse, it’s imperative that banks build teams from a variety of backgrounds and cultures. The banks that successfully diversify their workforce will have an incredible advantage over the next decade.
The question is, what is your bank going to do today to build diverse teams?
If you’re interested in learning more about how we help banks build diverse teams, schedule a call with one of our consultants today.