New research has warned that the progress made by financial services firms around diversity and inclusion is working in terms of gender, but not when it comes to ethnicity

Despite the financial services sector continuing to place greater emphasis on improving diversity and inclusion, a high proportion of ethnic minority individuals working in the industry are still experiencing discrimination, according to a new report from campaign group Reboot and B2B marketing and research firm Coleman Parkes Research published today (5 December 2022).

The Race to equality in UK financial services report, based on a survey of 800 professionals working in financial services roles for a minimum of 10 years, found that 68% of respondents have experienced discrimination at work in the last year, while 82% have faced unwelcome comments based on their background.

Furthermore, 25% of respondents believe that racial jokes are still tolerated where they work.

The report, now in its second year, additionally found that 58% of respondents believe that leaders are prioritising tackling gender diversity because they are still uncomfortable about combating race issues.

This has a knock-on effect regarding the remainder of the workforce – 60% of white respondents, for example, want to be advocates for their ethnic minority colleagues, however 22% of these individuals still feel uncomfortable discussing race in the workplace.

Speaking on the findings, Lindsey Stewart, director of investment stewardship research at Morningstar and Reboot ambassador, said: “There’s been a huge focus on culture and the workplace this past year.

“Who hasn’t heard about quiet quitting, ‘The Great Resignation’, or the war for talent? Well, if there’s a war for talent, many financial services firms are clearly still turning up unarmed.

“Creating an inclusive culture is a key talent retention factor, a strategic advantage and a governance imperative.

“In a sector famed for its ability to handle complexity, firms that aren’t taking a 360-degree approach to diversity, equity and inclusion – covering race, gender and diversity in all its forms – risk not only putting their employees’ future prospects at risk, but also those of their business as a whole.”

Lack of support

The report further warned that ethnic minority employees do not feel comfortable reporting discrimination to their human resources (HR) departments.

Indeed, 47% of ethnic minority respondents who have faced discrimination at work said they have raised the issue with their HR team - of those respondents, 75% added that HR was not very effective at dealing with the problem.

In addition, those who have experienced discrimination at work said they have come under greater scrutiny by managers (52%) and colleagues have treated them differently (48%) for speaking up.

This is having a direct impact on businesses. Almost half (49%) of those respondents experiencing discrimination over the last year said they had to take time off work, while 56% of those who have been discriminated against have had to seek counselling to help recover from negativity in the workplace.

Blocked career progression

The report further found that 44% of ethnic minority respondents think the speed of their career progression has been slower than that of white peers. Furthermore, 32% of respondents feel they do not have the same opportunities as white colleagues.

A lack of senior representation is also preventing ethnic minority individuals from progressing at work and prompting them to switch jobs, the report added.

For instance, 40% of ethnic minority respondents said that they are likely to search for a new role in the next six to 12 months, with 9% of these respondents blaming their organisation’s discriminatory culture for their potential move.

This issue is, however, something that appears to be on financial services firms’ radars as 46% of leaders recognise that the lack of ethnic minority role models within their organisation hinders career progression.

Other more positive diversity and inclusion developments include 81% of respondents stating that their company is actively promoting an inclusive and diverse working culture, while 69% acknowledged their organisation’s efforts to be more diverse when recruiting.

Sonja Laud, chief investment officer at Legal and General Investment Management, said: “There are reasons to celebrate, but equally there is more to do to create positive change.”