For years, the financial services industry has been focused on hiring a diverse workforce. But simply hiring minorities to say you're diverse doesn't guarantee potential business benefits.
The truth is that diversity hiring is now more important than ever because of the increasingly emerging markets served by financial services. Even more compelling is the fact that each silo market may be splintered into separate cultural entities that require a separate understanding of unique needs, cultural norms and styles. Latinos, for example, may be Cuban, Mexican or Costa Rican. Asians may be Japanese, Chinese or Korean. Understanding and catering to these subdivisions in a service industry may indeed be the roadmap for success or failure.
The recent workplace diversity requirements set forth by the Dodd-Frank Act does not dictate that financial services firms implement hiring quotas. Rather, the bill encourages organizations to promote diversity hiring, setting the stage for more inclusive practices. Many industries have embraced this initiative with surprising results.
Attracting new customers and gaining insight into new psychographics while opening new market possibilities are but a few of the business benefits inherent in inclusionary practices. Innovation, process improvements, retention and growth are only a few others.
Therefore, it is for no conscious reason that financial services firms, like most other businesses, often underestimate the contributions diverse employees make to overall business success. This is true at the retail/ teller level, within upper management or with trusted advisors for high net worth clients.
The gaps in cultural alignment between the groups are beginning to close, but not at a level where real business value can be realized. According to a 2010 Bureau of Labor Statistics study, about 6% of accountants and auditors were Latino and 8.5% were African American.
The real key to success is to create a diverse participative culture. By listening to fresh voices that bring new perspectives and attitudes to ultimately arrive at solutions, the net result offers your business greater engagement and insights into new and existing markets. This all leads inexorably to better results.
Inclusion means being open to every employee's ideas, knowledge, perspectives, approaches and styles. It's about engaging employees so they become active contributors by feeding the organization with great ideas. Companies that are proactive about intentionally harvesting as many diverse viewpoints as possible can then inherently derive innovation out of inclusion.
In many cases, management may not be comfortable with the culture change that's necessary to engender broader participation in the functions and welfare of an organization. But it's a mind shift that will pay dividends. Not only Human Resources departments need to pay attention to this, but senior management as well. Cascading this policy and practice throughout the organization accelerates results.
Finally, the financial services industry is personal. Often, employees at all echelons of service are providing financial counsel to customers and clients face-to-face. This requires empathy and intimacy with the customers needs, values and styles. Identifying, harvesting and deploying the input derived from a diverse workforce by attaining a "corporate cultural competency," only adds to the overall health of the organization.
In the best case scenario, gathering and encouraging this input can be invaluable in casting a firm's strategic business and marketing planning at the highest levels of management. The more an organization is connected to the needs and tastes of diverse and emerging markets through input from employees, the better your chances to capture emerging markets, creating new products and reaching these markets faster than your competitors will be.
By 2050, the U.S. Census Bureau predicts there will be no clear race or age majority in our country. The new normal will be a multicultural workforce in a multicultural marketplace. The time to act is now to create a workplace that proactively invites diversity and mirrors the disparate markets that are served. Diversity opens the channels of communication up and across organizational channels. Adopting daily and dynamic inclusion practices systems and tools will propel your business to new heights in the increasingly multicultural world.
Shirley Engelmeier is the author of "Inclusion: The New Competitive Business Advantage" and CEO of InclusionINC.