In the fields of business leadership, human resources, and talent management, "diversity and inclusion" is more than just a buzzphrase; it's become a ubiquitous topic of discussion at conferences, around boardroom tables, and even at the proverbial watercooler. "Everyone is talking about diversity programs, but it's not just a popular trend," explained Michael Noack, COO of Executive and Professional Search at The QTI Group. "It's a baseline requirement."
Despite its popularity, many professionals still misunderstand what diversity and inclusion (D&I) is. "When most people hear the terms 'diversity' and 'inclusion' they assume it's only about race and gender," said Cedric D. Thurman, chief diversity officer at the Federal Home Loan Bank of Chicago. However, that can cause people to think diversity is either not about them or only about them, he continued. Instead, an effective D&I strategy focuses on recognizing all the differences between people and leveraging those differences (including abilities/disabilities, education, work experience, ethnicity, military service, socioeconomics, generation, background, and more) to build a stronger organizational culture.
Another common misconception is that increasing the diversity levels in an organization will make it more difficult to manage. "People think managing diversity is more difficult because of different cultures," explained Elizabeth Strike, diversity and inclusion talent consultant at Associated Bank, Green Bay. "In reality, managing a team is difficult overall. No matter what the makeup, you need to understand your team members."
That includes overcoming another common misconception: that individuals with disabilities can only perform entry-level work. Kurt Barikmo, business services consultant with the Wisconsin Department of Workforce Development's Division of Vocational Rehabilitation (DVR), says the agency has recently placed individuals in roles as diverse as software engineer and freelance writer. "The reality is that individuals with disabilities participate in all forms of education and training and obtain employment in all industry sectors and all types of positions," Barikmo explained. "Companies have reported a positive impact on their bottom line when they are able to find and keep the talent they need, connect effectively with their customers and communities, and access incentives associated with hiring or training individuals with disabilities," Barikmo continued.
Perhaps the most important misconception about D&I to overcome is why it is important. Many believe it's simply the right thing to do. While true, the impact of an effective D&I strategy goes beyond that. It's also a tremendous benefit to the organizations that do it well, promoting customer allegiance and helping them to attract and retain top talent, both important factors in overall business success.
By implementing a D&I strategy well, banks can attract and keep customers by fostering a sense of belonging and allegiance with them, even as those customers (and their needs) change over time. "When a person enters a business and they see someone like themselves or a loved one, there is often an allegiance formed," Barikmo explained. That's why following a strategy to ensure that the bank's staff mirrors their customer base is so effective. "If your customers are a diverse mix of people, from a human connection standpoint you want to have the same representation at the bank," said Noack. That representation can form a connection with potentially untapped markets, as well. "More than 300,000 individuals in Wisconsin age 21-64 report having a disability," said Barikmo. "It makes good business sense to ensure that a company's workforce reflects those same individuals who the company hopes to serve."
D&I strategies are also a key component of any business's long-term success as customers change over time. "If you look at demographics, significant shifts are going to happen in the next 10-20 years," said Thurman. "The labor force will become a majority-minority population." Data suggests that within 20 years, the combined minority population will outnumber the majority population. "Your customers will change over time and their needs will change with them," Thurman continued. "As that happens, if you're not prepared to deal with that change, you'll lose out." In order to have a diverse staff equipped to deal with that change, banks need to start now.
D&I strategies can also help banks cultivate strength on the employee side. Noack explained how an effective D&I program makes recruiting easier. "Even in tight economies, you'll bring talent in the door if you have a reputation for hiring a diverse workforce—it's a value-add today for people considering work culture," he said. A well-executed D&I strategy will help banks prepare for generational shifts in the workforce, create innovative work environments, and provide advancement opportunities for all staff.
Just as demographic shifts will alter banks' customer bases, their employee bases will inevitably change as well, according to Thurman. "You need to think about how you attract talent that looks different than the talent you have today and how you create opportunities for them," he said, specifying that for financial services industry employees, an important area for diversity will be generational.
Preparing for the largest workforce generational shift in history is also an opportunity for banks to create work environments that foster creativity and innovation, which also helps to attract talent. "Implementing a D&I strategy can help an institution attract top talent and improve performance," Strike explained. "It provides an environment for creativity." Research supports the idea that more diverse teams are also more productive and satisfied with their work. "Companies have reported increased team morale, motivation, and commitment when they have the opportunity to experience a more diverse and inclusive work culture," said Barikmo.
Finally, a strong D&I strategy can also help banks ensure their future leadership teams are as diverse as the communities and employees they serve. For example, Strike explained that Associated has developed six colleague resource groups, made up of employees, which then help the institution bring in diverse talent through an emphasis on workforce (representation across all levels and locations), workplace (creating and maintaining an inclusive environment), and marketplace (an inclusive approach to customers, clients, and markets). These colleague resource groups also generate development and advancement opportunities for their members. "We've promoted several employees because of their involvement in these groups," Strike explained. "They've helped us create a better environment."
With the clear benefits of implementing a diversity and inclusion strategy in mind, here are five action steps to help banks get started:
- Get support from the top. Noack, Strike, and Thurman all emphasized the importance of both initial and sustained support from leadership, including modeling desired behavior.
- Embrace opportunistic recruiting. This kind of strategy recognizes that—much like credit—when you need talent the most, it's most expensive and difficult to get. Instead of looking at recruiting as an event-based occurrence, like most companies do, consider it an ongoing process, Noack said. "Look at your potential turnover and vacancy rates, as well as areas of growth, and budget during strategic planning time so that you're able to be opportunistic," he explained. "You may end up over-staffing temporarily, before attrition catches up, but you'll have the top talent."
- Don't silo it in HR. Your D&I initiative doesn't need to be owned by the human resources department (though it can be). "An effective D&I strategy is part of your business strategy," Thurman explained. "It shouldn't be solely part of an HR strategy, because the issues you need to address might not be solely related to HR."
- Change hiring/promotion requirements. By removing or relaxing the requirements for certain roles, banks can make employment and advancement accessible to diverse candidates with different backgrounds. "When you're recruiting, soften your mandatory requirements so you can be open to considering transferrable skills," Noack advised. For example, looking at candidates with a certain amount of relevant experience rather than requiring a college degree. This does not mean lowering your standards, Thurman explained. It means thinking more broadly about skill sets.
- Ask and share. "D&I is a journey," Strike said, advising bankers who are curious to reach out to other organizations who are doing similar work to learn about their challenges and successes. "Many organizations face the same challenges, and they're more than willing to speak to you about it."
Don't Miss the WBA HR Conference!
Time is running out to register for WBA's annual conference designed by and for human resources bankers. Join your HR peers for the conference on May 9 in Stevens Point to learn more about D&I, attracting your next leaders, employment law, and getting motivated. View the full conference agenda and register online today.
D&I Resources for Banks
- AskJAN.org – The Job Accommodation Network website lists disabilities and what accommodations may be requested, along with estimated costs.
- Job Center of Wisconsin – Access data and reports related to employment in Wisconsin including wage, occupation, population, and unemployment data.
- DVR Business Services Consultants – Services include workforce recruitment, connection to labor pools, and training solutions.
- Helpful books:
- The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies by Scott Page
- The Inclusion Paradox – The Obama Era and the Transformation of Global Diversity by Andrés Tapia
- Blindspot by Mahzarin Banaji
- The Medici Effect by Frans Johansson
QTI is a WBA Associate Member.