Diversity, Equity and Inclusion in Banking…Room for Improvement!
Someone once said that “diversity is being invited to the dance; inclusion is being invited to dance”. If this is true, then more banks than ever in New Jersey are dancing!
Our industry has had an imbalance for a long time. While a majority of many banks’ employees are often female, those ranks get thinner as you move up the food chain. Non-gender diversity statistics are even more challenging. However, the question remains: how do we rectify this severely unbalanced situation, so that the next woman or person of color to serve as a New Jersey bank CEO or NJBA Chair will simply be part of the normal course of events, rather than an outlier?
On a basic level, while diversity means different things to different people, a desired outcome is often to broaden the range of thought, perspective and experience—while leveling the playing field and seeking to optimize business decision-making. That being said, in order to achieve this broader perspective, organizations need to recognize the importance and value of a wider representation of diverse talent in both senior leadership positions and on their board of directors. After all, your bank’s customer base and growth markets are all getting less homogenous, as is your future employee base. Customers in the important Gen Y and Gen Z demographics are buying homes and starting to save for their kids’ college education. This important demographic in particular typically cares a lot about diversity, ethical and responsible corporate citizenship, and equal opportunity.
Sadly, too many community banks fall short here, victims of their own unconscious bias and preconceived demographic perceptions. We can do better! Not to mention that our regulatory agencies are moving “diversity” onto their front burner agendas. For publicly traded companies, the risk of criticism for a lack of diversity, equity and inclusion in the management ranks and on the board is even higher.
There is no secret sauce that will solve this systemic challenge for the industry, especially since this is a long term issue. However, there are a few basic steps which can begin to help move the banking industry along on this journey, and create an organization where inclusion has real meaning and belonging is no longer aspirational for diverse employees:
- *Start by really listening to your colleagues who are black, brown, Asian or female, to better understand their experiences inside the organization, and where the bank can evolve to make it feel more welcoming to all employees. The lack of real inclusion is where many firms fall short, despite good intentions.
- *Address the very real challenges of unconscious bias. To be sure, we all have our own internal biases, and they affect how we might approach people—whether a coworker, future employee or bank customer. Education in this arena is an absolute must—across the organization. Lead from the top.
- *Take a hard look at your leadership team and board of directors. If these groups are homogenous (whether in gender or ethnicity), the message being sent is not helping. Potential diverse employees will not see the role modeling at the top to validate that the bank is serious about equal opportunity, diversity and creating an inclusive environment.
- *Review your organization’s job descriptions at every level, to ensure that the qualifications you outline are not unintentionally creating a perception of exclusion via “requirements”, rather than inclusion by open-mindedness.
- *Consider partnering with local high schools, community colleges and other educational institutions in your markets to better inform all students about the opportunities in banking. Take a ground floor approach to developing a more diverse workforce over time.
Lastly, consider how your bank goes to market for new employees in general, especially for entry level jobs and new graduates. Instead of the traditional boring job advertisements that banks are known for, we need to focus on what resonates with younger Gen Y and Gen Z. Something like “if you want to work for a technology-driven business that cares deeply about its customers and gives back to its communities…come talk with us!” As a potential employer—technology, customer-centricity and a focus on communities—are very meaningful to rising generations and diverse populations.
It’s clear from the NJ Bankers’ DEI Initiative, and the active engagement on this important topic from many banks, that the message is getting through. Hopefully, the day will come when a woman elected as CEO of a NJ Bank, or Chair of NJ Bankers, will be business as usual. That will represent real progress!
We are not approaching the end of the DE&I journey but rather are at the beginning. If community banks in NJ and elsewhere are going to continue to thrive and survive, then grappling with the challenges of equality, diversity and inclusion must be more than a project. They must become an integral part of how our banks do business every day.
<To read the article in its published format, click here, https://emflipbooks.com/flipbooks/NJBA/NewJerseyBanker/Issue1_2021/>
Alan J. Kaplan is Founder & CEO of Kaplan Partners, a retained executive search and board advisory firm headquartered in Philadelphia. You can reach Alan at 610-642-5644 or alan@KaplanPartners.com.