Diversity in 2020: The Importance of Retention

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Earlier this year, we wrote about the real benefits organizations stand to gain if they strive to create a more diverse and inclusive work environment

In the months since we published that piece, nationwide focus on diversity and inclusion has increased exponentially. 

By now, any given organization’s D&I efforts have long moved past PR sleight of hand to display political correctness—they are now a matter of financial viability. 

The body of literature providing real, measurable evidence for the causal relationship between diversity and performance seems to double every few years. 

As more and more companies become aware of the data-backed links between diversity and productivity, the number of board members and leadership teams in financial services committed to making real efforts towards fostering D&I within their own walls also grows.

And while this trend is incredibly important, especially in financial services where diverse representation and various diversity metrics are often below the watermark of other professional industries, these initiatives too often stop at the point of acquisition, or, at the very least, are skewed too heavily towards the hire and are not focused or thoughtful enough towards what happens after

Nearly one out of three industry executives within financial services report that they’ve successfully hired key diversity talent only to fail at retaining them due to a lack of inclusion or engagement after they were hired. 

Put frankly, there’s a retention problem for many firms in financial services. 

For firms that report healthy diversity metrics and retention rates, however, there is one characteristic of their organization that is nearly ubiquitous: employee resource groups or ERGs. ERGs are employee-led groups focused on fostering a diverse, inclusive workplace and identifying and executing strategies to support it. 

Organizations can have LGBTQ, female-focused, and cross-generational ERGs, which, at a high level, are focused on educating employees on the differences, highlighting the strengths, and supporting the inclusion of certain groups. 

ERGs are an incredibly effective and collaborative method to expose and address specific issues or biases that may be present within a particular organization. In this case, specificity is critical because, too often, organizations attempting to enact diversity initiatives use generic solutions or a standard set of D&I strategies rather than honing in on the unique pain points of their company. 

Raise awareness of your D&I efforts and poll your organization to identify volunteers who might be passionate about participating in potential employee resource groups. One is great, but the more, the better: having multiple ERGs can help engender inclusion and belonging and drastically improve diverse employees’ retention rates.

Beyond just ERGs, another component of a holistic D&I initiative is to help diverse hires gain access to mentorship opportunities. A study from the Harvard Business Review points to the correlation between mentorships and increased engagement and, thus, healthier and more successful workplace diversity programs.

Women and underrepresented minorities consistently report valuing mentorship as a crucial part of their career development, but often cite the difficulty of identifying mentoring opportunities. To help remedy this issue, leaders can intervene by communicating with new hires and helping pair them with potential mentorships directly or help identify mentorship opportunities within their own networks. 

Beyond a sense of belonging and inclusion, diverse employees want to feel valued for their professional ability at their organization. Communicating openly about and assisting with their career development is a fruitful way to address that desire for both parties. 

Fortunately, age-old barriers of entry to underrepresented groups are crumbling due to powerful social momentum and the genuine efforts of board members and leadership teams. As we continue to witness these barriers dissolve, the impetus is now placed on those leadership teams to adequately welcome, engage, and include their diverse talent—the work isn’t done just once the hire is made.

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