Diversity in the UK has come a long way since the Equal Pay Act came into force in 1970, and the financial services sector has played its part in improving opportunities for people from all backgrounds.

A lot of progress has come in the last decade and financial services companies have worked hard to address allegations of elitism and sexism that have affected the sector’s public image. Recruitment strategies and company cultures have therefore been significantly refined over the years in order to ensure that financial services represent an inclusive environment for people of all backgrounds.

From Citigroup and HSBC’s women in leadership program to the introduction of ground-breaking LGBT employee networks at Aviva and Lloyds, there have been many fine examples of initiatives which have successfully challenged the sector’s stereotypes and improved workforce diversity.

Randstad recruiters recognised this progress in a recent survey when they gave their thoughts on how recruitment in financial services is now perceived. Here are the results:

  • 78% of Randstad consultants believe diversity is now very important to recruiters in the UKs financial services sector.
  • 71% feel employment diversity has improved significantly during the last 5 years.
  • 28% believe elitism does still exist in the financial services sector but 71% argue that the recruitment landscape is still getting much better.
  • 85% of Randstad recruiters stated that their financial services clients have implemented campaigns, policies, and initiatives which have successfully improved standards of diversity.
  • 85% of Randstad consultants argue that there is still a strong level of diversity amongst applicants for financial services roles at all levels.

While the financial services sector has made huge strides in the last 10 years there are still signs suggesting more has to be done to eradicate lingering problems with recruitment. This year [2016] saw three significant milestones in this area that have forced banks and insurance companies to reassess their diversity targets and update guidelines and legislation.    

Report on elitism prompted new guidelines for banks

Although the financial services sector has made some important advances in developing a more diverse workforce, not enough has been done to recruit young talent from working class backgrounds.

According to a report by the Social Mobility Commission released in September 2016, candidates were unfairly held back from new roles if they didn’t adhere to ‘opaque’ city dress codes. This meant that some investment bankers were reluctant to hire candidates who wore brown shoes with a business suit, or wore ‘loud’ ties, particularly for client-facing roles. 

The report also found that 34% of new investment bankers had attended private schools and employers appeared to prefer candidates who went to a select group of universities.

In response, the government issued guidelines to help banks improve their recruitment strategies to end discrimination. This involved urging employers to collect data on applicants’ backgrounds to discover where the barriers were, being more flexible about screening academic credentials below degree level and considering vocational learning as equal to academic routes for life sciences. 

Women in Finance Charter signed

In April 2016, Virgin Money conducted a review of gender diversity in finance and discovered that women continue to drop out of the workforce at a higher rate than men, particularly at middle management level, despite entering the sector in greater numbers.

As a result, the government persuaded 72 firms across the sector to sign the Women in Finance Charter, committing them to supporting women into senior roles and making them set realistic diversity targets for the future. 

Each organisation, therefore, signed up to enforce four pledges: 

  • Making one member of the senior executive team accountable for gender diversity.
  • Setting targets on gender diversity in senior management.
  • Publishing progress annually.
  • Linking pay and bonuses for senior staff to the delivery of these targets. 

Financial Conduct Authority (FCA) set targets for 2025

Financial Conduct Authority chief executive Andrew Bailey said that it was “vital that our people reflect the society that we serve” and that by “encouraging diverse attitudes and opinions in our daily work [the FCA would become] a stronger and more effective regulator.”

Following Virgin Money’s report and the newly signed Women in Finance Charter, the FCA aims to lead the way with its diversity targets and wants 45% of its senior leadership team to be women by 2020, rising to 50% by 2025. 

Similarly, the FCA has also announced targets for black, Asian and other ethnic minority representation at senior level, with aims to reach 8% by 2020 and 13% by 2025. 

In October 2016, 39% of the leadership was female and 3% were from non-white backgrounds: there is still work to be done.