Australia – Landmark research into the investment management industry led by Mercer, a global leader in superannuation, investments, health and human resources consulting and products, has revealed bias in recruitment and promotion decisions and workplace culture block opportunities for under-represented talent to thrive. Mercer’s landmark research will help organisations and industry leaders drive change while ensuring their workforce thrives.
Launching today at the Financial Services Summit, the study was co-developed with 15 asset owners and managers and was based on a survey, and focus groups and interviews with, investment managers, employees from neighbouring functions and university students. Diversity was measured across gender, cultural background, age, socio-economic background and educational qualifications.
Exclusionary management practices and the lack of awareness of investment management as a career path among students are among the issues industry leaders must tackle, the study found. Other key findings include:
- 76% of investment managers are male, 48% are private school educated (compared to national average of 35%) and 76% of those who completed post-graduates studies completed a Masters of Finance.
- Female investment managers say bias in the recruitment process and career progression is the number one reason for poor diversity while their male counterparts blame parental and care responsibilities for the lack of diversity.
- Female investment managers are up to 30% less likely to be promoted through the ranks and are up to 50% more likely to leave than men.
- 77% of Anglo-Celtic male investment managers feel their manager supports their career ambitions compared to 59% of female investment managers.
- Flexible working is perceived as a career handbrake and 78% of women agree this explains poor diversity.
Yolanda Beattie, Diversity and Inclusion Practice Leader at Mercer said great work was happening within the industry to tackle the issue, and leaders were committed to doing more to dismantle the systemic structural and cultural barriers that inhibit diversity.
“From a gender perspective, fixing the leaky pipeline by supporting women through critical child bearing years must be a priority. That won’t happen by accident; employers need to intentionally sponsor their talented women if they are to stop them leaving at such high rates,” Ms Beattie said.
Recruitment processes also reinforce homogeneity. “Employers are fishing from a homogenous pool of well-known candidates. A tendency to hire who you know rather than searching widely for diverse talent is part of the problem. This impacts male and female non-Anglo Celtic aspiring investment managers, and women,” she said.
Student and graduate feedback shows the industry has much to gain from raising its profile among the talent of the future. Less than one in five finance students said they were considering investment management as a career option with women (41%) more likely than men (27%) to report not knowing enough about the industry.
“We need to reimagine how we promote this industry as a career option to diverse talent. Our study found all segments love their work – it’s interesting, engaging and purposeful. The industry has a positive story to tell,” Ms Beattie said.
Key recommendations developed by the research participants’ leaders:
- Develop an inclusive industry-wide employee and career value proposition and promote to diverse talent pools
- Engage portfolio managers more effectively in the problem and solution so they can understand their impact and the personal benefit of being part of the solution
- Embed behavioural expectations into performance expectations and develop talent so they have the self-awareness to adapt and meet the challenge
- Redesign recruitment practices – advertising all roles, cultivate long-term talent pools, recruit for diversity and technical skills by considering what different perspective each recruit brings
- Support underrepresented groups through the pipeline with an industry-wide sponsorship program
- Develop, report, and track progress on company-specific D&I metrics.
“Industry leaders recognise diverse teams make better decisions and are in for the long haul when it comes to driving change,” Ms Beattie said.
For further comments please contact Yolanda Beattie, Diversity and Inclusion Practice Leader via email email@example.com or
telephone:+61 424 186 534
Notes for Editors
Methodology of the Survey
In 2016, Mercer convened a group of asset managers and owners to:
- Measure the diversity of the investment management (IM) profession;
- Understand barriers minority talent segments face; and
- Explore solutions to create a culture where all talent can equally thrive and the industry can attract different perspectives.
Diversity was measured across gender, cultural background, socio-economic background, qualifications, age and decision-making approaches. We surveyed 339 investment managers (IMs), 743 employees from neighbouring functions and 1,119 university students, and combined these insights with qualitative data from each segment. Employer perspectives were also analysed.
Mercer is one of the world’s leading firms for superannuation, investments, health and human resources consulting and products. Across the Pacific, leading organisations look to Mercer for global insights, thought leadership and product innovation to help transform and grow their businesses.
Supported by our global team of 22,000, we help our clients challenge conventional thinking to create solutions that drive business results and make a difference in the lives of millions of people every day.
Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With annual revenue of $13 billion and 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit www.mercer.com.au.