In the wake of the Black Lives Matter movement four years ago, many firms in the financial services sector pushed to create a more diverse and equitable workplace. Yet in recent years, some of that progress has slid backwards.
In Reboot’s 2024 Race to Equality report, 22% of employees reported reduced funding for diversity programmes, while over a quarter have seen elimination of diversity-focused roles in the past two years. As efforts to increase diversity in the workplace stutter, 42% of respondents believe the main reason for this is budget cuts.
In addition to a decrease in fiscal efforts towards diversity, some did not find an open environment for discussing racial and ethnic diversity. Almost half of employees said they felt pressure not to advocate for ethnic and racial equality in the workplace, while another 42% felt they needed to be cautious while advocating. Ethnic minorities felt this more intensely than their white peers, with 45% feeling pressure to stay silent compared to 35%.
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Noreen Biddle Shah, founder of Reboot, said: “This year’s report highlights a stagnation in race sentiment since Reboot was launched four years ago. Even more concerning is the growing trend of employees feeling pressured to remain silent on issues of racial and ethnic diversity. Many fear repercussions if they speak up. A real example is that not one of our senior ethnic minority ambassadors was able to share a quote in response to this year’s research. Four years ago, this was not an issue at all.”
Within recruitment, near three quarters believe their company is attempting to be more ethnically and racially diverse when hiring. However, 59% have said that their identity or background has had an adverse effect on receiving opportunities, increasing from just 29% two years ago.
Rick Lacaille, former chief investment officer at State Street Global Advisors, said: “Our diverse talent pool offers an enduring, positive differentiator for the UK financial services industry, yet the Reboot report suggests this potential is being squandered by firms’ inability to address the need to build an inclusive culture. Investors in the UK may yet benefit from diversity, but regrettably, more regulation relating to disclosure may be needed.”
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Some of this difficulty may be stemming from leadership, which 70% described as “actively resistant” to ethnic and racial diversity initiatives. The survey also found a drop-off of those believing that senior leadership is doing enough to promote diversity, with just 35% responding positively this year compared to 60% last year.
Baroness Helena Morrissey, chair of the Diversity Project, said: “With so little progress made to date and given heightened racial tensions across the UK, it seems extraordinary that financial firms’ efforts to improve racial equality are diminishing or under threat. But I’m afraid this report corroborates the messages from the Diversity Project’s recent webinar, ‘No Space for Racism’ – there is a clear gap between what needs to happen and what is actually being done at many firms.
“While business leaders can do much more to level opportunity for all talent, encourage openness and deepen community within their own companies, the regulator can also help by providing clear expectations. The Diversity Project, Reboot and #TalkAboutBlack have written to the FCA to urge a renewed focus on tackling racism and improving culture.”
