While experts say Wall Street is certainly making efforts to attract, retain and promote people of color, it still has a long way to go.
"From what I can tell, it is genuine that everybody recognizes that a change in demographics is needed to reflect the voices of potential and current clients," says Cliff Mahto, operations manager at RBC Dain Raucher. "But it is not where it ought to be." He adds that the number of visible minorities in finance lags even further behind when it comes to institutional positions that include mid-level managers, traders, financial advisors and senior leaders.
Barry Callender, managing director at Simmons Associates, a New Hope, Pa., consultancy that helps companies develop diversity programs, notes that Wall Street has been more successful in integrating in terms of gender than of race - something he explains by social and psychological forces.
The Challenge of Color
"For a host of societal reasons it is easier for white women to break through the barriers than it is for people of color," Callender says. Why? Because white women are a closer demographic, and are more familiar, to the white men who dominate the upper echelons of the industry.
The argument can me made that candidacy for top-tier corporate jobs starts in kindergarten, Callendar says, because someone's socioeconomic heritage is such a powerful determining factor on their education path. It plays a leading role in who gets into the best business schools, and who is perceived to be the best candidate for a Wall Street job. However, he points out that studies have found a lack of correlation between GMAT scores and professional competency - a finding that challenges the basis of the industry' HR practices, which often overlook minorities because they attend top B-schools in fewer numbers.
More firms are beginning to recognize these sorts of dynamics. For example, some minority mentoring programs are now intended to be more of a two-way street, Mahto says, in that participants are encouraged to educate white mentors about their experiences at the company. Further, such two-way communication is often aimed at understanding each group's personality traits, Callendar says. "The greatest challenge in mentoring is that the behaviors required for white men to be successful in the work place are not the habits of people of color," he says. "Because of societal stereotypes, it is easier for white males to be aggressive and demanding in the workplace - behaviors that in people of color are described as angry and mad, the stereotypical violent person of color."
Like other major institutions, Bank of America has an elaborate and formal diversity program. It includes a "Global Diversity and Inclusion Council" comprised of senior leaders who keep an eye on and promote the company's diversity efforts, and a wide network of "affinity groups" for all varieties of employee segments, including various ethnicities, women, gay people, those with disabilities, and military personnel. Each corporate office has its own affinity chapters, which are represented by national leaders, promote networking and mentoring, and voice concerns about their experience at the company, says spokeswoman Kelly Sapp.
While such approaches are good for employees, many banks will say they're also ultimately good for business. "With their different languages, family structures, life situations, and financial requirements, our customers and clients require a variety of products, services, and marketing that demonstrate our awareness and appreciation of who they are and what they need," Sapp says. "It's critical that we have a diverse and inclusive work environment so that we can reflect and meet their diverse customer needs."
Indeed, everyone we interviewed says that companies' attention to diversity stems from an understanding that it's wise business. For one, Mahto says, many state-run pension plans require social investing, and often turn to minority-centered products. Callender says a plethora of evidence shows that diverse groups are more productive and creative groups - and that customers best respond to those who are like them, and to products that are created by those who are like them.
"Study after study has shown that the best ideas are from groups that are visibly and non-visibly diverse," he says. "The first few stages of those teams coming together can be more challenging, but in the long run they achieve much more innovation and creativity and problem-solving than homogeneous teams. This is becoming more important to companies in the United States, since the country is becoming more ethnically diverse. Customers like to deal with people who look like them, but also deal with people who best understand them."