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DEI initiatives can make or break banks’ ability to find, engage and retain employees. But how do financial firms ensure DEI delivers? It starts with a tactical task force.
Diversity, equality and inclusion (DEI) efforts can help build high-performing teams. According to research firm Gartner, 75 percent of companies with front line decision-making teams that are both diverse and inclusive will exceed their financial targets through 2022.
As noted by HR Exchange Network, however, the pandemic has proven challenging for these efforts thanks to constantly-changing operational frameworks and evolving public health regulations. And while employees were willing to put DEI on the back burner as organizations figured out how to function in this “new normal”, the advent of return-to-work efforts combined with an increasing focus on work/life balance has put DEI back in the spotlight.
A recent report found that while 60 percent of Millennials expect their company to demonstrate commitment to DEI, 32 percent say their organization isn’t doing enough — and according to the report, there is “ direct correlation between employees and their likelihood to want to leave the organization is they think diversity in cultures and backgrounds and not respected.”
Put simply? To keep employees engaged and retain great staff, companies need to deliver on DEI.
When it comes to building functional DEI frameworks, two obstacles are common: Structural failures and social frustrations.
As the Harvard Business Review (HBR) points out, because DEI initiatives are connected to multiple processes, people and polices across the organization, it’s easy for them to become superficial scaffolds rather than the foundation of structural change. As a result, companies may find themselves hiring C-suite executives such as chief diversity officers (CDOs) with the best of intentions, but then limiting their efficacy by leaving them without a substantive plan — or the power to enforce it — in place.
Gartner, meanwhile, speaks to the social pushback often experienced by companies when deploying DEI frameworks, which often takes the form of three “Ds”: Denial, disengagement and derailing. Denial sees a refusal to recognize existing issues, disengagement the assertion that it’s “not my problem” and derailing a focus on other problems in the organization before DEI.
The ultimate goal of DEI initiatives is to overcome these obstacles and create a sustainable culture of inclusion and diversity capable of responding to evolving market forces and changing industry conditions.
But firms need to walk before they can run. In practice, this means laying the foundation for effective DEI before implementing policy and procedures at scale. Here, a tactical task force offers the shortest distance between objective and outcome: By starting with strategy, organizations can ensure actions taken are more likely to deliver desired outcomes.
But what does an effective task force look like? Here are five tips to help firms get started.
1. Focus on values
Task forces need to focus on the big picture. But with a host of different cultures, identities and preferences across large financial firms, these efforts can quickly become complicated. A recent MIT Sloan piece recommends a values-based approach that focuses on measurable objectives: Representation, participation, application, and appreciation.
2. Frame efforts using functional examples
Rather than creating DEI initiatives from scratch, it makes sense to emulate functional examples. Consider the 2021-2023 strategic plan from the FDIC, which focuses on the core goals of culture, career, communication, consistency, and community. While there’s no regulatory obligation for financial firms to adopt specific DEI frameworks, plans like the one from the FDIC offer solid starting points.
3. Facilitate executive buy-in
As noted above, while CDOs are becoming more common — half of the S&P 500 now have CDOs — these executives aren’t always given the resources they need to create meaningful change. The result? For task forces to be effective, bigger C-suite buy in is necessary. By getting at least one other executive on-board, from the CIO to the CFO or CMO, firms have a better chance of driving sustained success.
4. Find where DEI isn’t working
Before creating a task force to address DEI challenges and build an effective program, firms need to know what’s working — and what isn’t. Achieving this goal means going to the source: Staff. Companies should solicit feedback from staff at all levels of the organization, from customer service agents to front-line tellers and mid-level managers. The most important components of this feedback? Honesty and anonymity. Firms need staff to tell the truth — and that means protecting their privacy.
5. Formulate a plan
Last but not least, a task force needs a plan. Informed by core values, framed by other efforts, bolstered by executives and empowered by employee feedback, firms can create plans that systematically tackle key issues. For example, if staff surveys show recurring challenges with equitable hiring practices or cultural inclusion, plans can be crafted to address these issues specifically, in turn providing structural rather than superficial support.
Diversity, equality, and inclusion efforts are now critical to keep employees engaged and attract new talent. But for financial firms, the road to effective DEI isn’t always straightforward. While the end goal is creating a framework that’s both sustainable and supportive, organizations are best-served by building tactical task forces capable of identifying key issues and defining critical components, in turn setting the stage for long-term success.
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