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Mentorship, Sponsorship, and Sincerity Key to Diversity Recruiting in the Finance Industry
Knowledge @ Emory
by Myra A. Thomas
June 10, 2008
B
reaking into the "old boys' club" in the financial services industry can be particularly
daunting for women and people of color. From brokerage and investment to banking and accounting,
the number of minorities and females occupying key positions in these fields is still relatively
low. Even after a decade of recognized and formalized diversity recruiting efforts in place at many
of the major financial services firms, the return on this investment-in the form of
recruitment-continues to be the subject of much discussion and contention.
So, just what appears to be the missing factor in diversity recruitment in the finance
field? Many experts in the industry acknowledge that strong mentorship efforts appear to be the
underpinning to bringing on talent and ensuring success on the job for a diverse employee base.
Andrea Hershatter, senior lecturer in organization and management and associate dean and director
of the BBA Program at Emory University's Goizueta Business School, says, "In any arena, a mentor is
a vital component in expanding the pipeline. Underrepresented groups are more likely to self-select
out of a particular industry if they lack a cohort. A mentor who can serve as a role model not only
provides inspiration, but they also serve to help a younger employee understand the implicit rules
of the game and what leads to success."
Mentorship in the finance field appears to be particularly essential, she notes. "Given the
inherently competitive and intensely demanding nature of the work, it is incredibly daunting for
someone who is trying to enter the field," Hershatter says. "A mentor then becomes an even more
vital resource." Unfortunately, financial services firms seem to be notorious for skipping over
mentorship efforts. These bottom line oriented institutions are much more attuned to the commission
earned or the value of the deal landed, and grooming underlings doesn't usually rank high on the
list of company priorities. Additionally, as the financial markets struggle to get out of a rather
unpredictable period, mentorship efforts are the last thing on the mind of budget conscious
managers. But, talent development shouldn't stop in a lean time. In fact, that's when a company
needs to make the extra effort to get back on top. A diverse team can often provide a refreshing
take on the "business as usual" approach.
Education also plays a key role in providing the next generation of minority and women
employees in finance positions. Consequently, mentorship and diversity efforts need to start at the
university level. From undergraduate accounting to graduate business programs, the new crop of
students pursuing these type of higher education degrees aren't exactly the most diverse pool, and
so addressing this issue is critical. Kaplan Mobray, U.S. diversity recruiting leader for Deloitte
& Touche USA LLP, notes, "There does appear to be fewer women and underrepresented groups
pursuing finance degrees. For many youth beginning their academic careers, other fields are simply
seen as more attractive. However, this is a great time to pursue a degree in financial services."
Courting the next generation of women and minority students seems essential in changing the
current situation, says Alicia E. Sierra, director of diversity and community initiatives for the
Goizueta Business School. She notes, "For universities, there should be a clear commitment to
diversity. Prospective students, faculty, and staff shouldn't have to search for that commitment.
It's fine to have a vision, but if there is no substance behind it, it simply doesn't mean
anything." Currently, Sierra is working with the Goizueta Business School Diversity Committee to
draft a written and implementable diversity strategy for the school.
Efforts such as the upcoming Inside Goizueta 2006 conference to be held on November 9-11,
2006 at the Goizueta Business School provide prospective minority students an insider's eye into
the school. Isom notes, "The point of the conference is to give a realistic view of what it's like
to matriculate at Goizueta. At the conference, prospective minority students will get a chance to
interact with current minority students and to go to a class simulation, as well as talk to faculty
and staff. For prospective MBA students, this is a head start on networking."
Building a sense of community and a welcoming atmosphere is equally as important in the
workplace. Of course, making a financial firm a place where underrepresented groups might want to
work, especially when they see few role models ahead of them, is a different story. Reputations are
hard to fight, and impressions often deter some of the best and brightest minority and women
candidates from considering a financial services position in the first place. Even if there are
significant efforts made to change a corporate culture, that message needs to be communicated to
the world-at-large.
Deloitte & Touche's Kaplan Mobray believes that branding, or how the world-at-large
views a company, can be critical to solving this dilemma. He views mentoring as an "extension" of
that brand, or a way to communicate to prospective and current employees that the company is
committed to diversity. Goizueta's Hershatter adds, "But, this so-called ‘branding' needs to be
sincere. Prospective employees are incredibly savvy in conducting their searches. They will know
very quickly whether the branding is an authentic representation of the company or not. Also, there
are ample surveys out there indicating the best places to work and the most welcoming environments
for underrepresented minorities. Branding may help a firm that is truly striving to achieve these
goals, but it will not fool prospective employees if it is disingenuous."
Sarah O'Brien, CFO for Atlanta-based Kodak Dental Systems, a dental film, x-ray and digital
equipment company and a division of Eastman Kodak, notes that companies need to remember individual
sponsors, in addition to mentorship programs. "A sponsor is much more than being a mentor. The
impact is even greater, if you are a sponsor. A sponsor is someone in your company who gets you
where you need to go. They are the higher ups and the ones in your corner recommending you for the
executive positions when they become available," explains O'Brien, a Goizueta EMBA alum. "They
aren't the ones you go to for help in getting an issue or problem resolved, like you would do with
a mentor. There is a clear distinction between the two. But, a mentor can also act as a sponsor."
And, despite the concerns over the cost of mentor and sponsorship programs, it appears that
there is a value-added by developing diverse team members. Jill Perry-Smith, assistant professor of
organization and management at Goizueta, notes, "As research builds, a diverse workforce is now
being recognized as essential to a company's profitability. There are several studies that suggest
that diversity is good for the bottom line, but exactly how and what type of diversity is complex.
For example, teams comprised of individuals with diverse experiences and backgrounds tend to be
more creative. However, they also need skills in managing conflict or some other ‘glue' that helps
them overcome potential process losses-for example, a strong culture centered around cooperation,
trust, and risk taking."
In Perry-Smith's research, she notes that exposure to diverse individuals via informal
relationships does help people to think "outside of the box" on the job. She adds, "Whether working
on teams or on autonomous projects, contact with a broad spectrum of people can help with creative
problem solving, and companies tend to benefit from employees who can apply this creativity to
solve difficult and challenging problems." This adaptability factor is particularly useful in
today's fast-paced, ever-changing, and global environment.
Wanla Cheng, president of the Asia Link Consulting Group, a full-service diversity,
marketing consulting and multicultural firm, acknowledges Perry-Smith's assessment, noting that
most corporations are simply not aware of the economic gain of well-implemented diversity programs.
Says Cheng, "Most large companies engage in diversity efforts simply because they want to be good
corporate citizens. Of course, a buy-in is needed at the top of the organization, for the culture
change to begin to occur." She notes that diversity efforts fail when companies approach it as a
lower-level human resource effort. "We simply can't throw money at it and hire a few HR people and
think it's done," she says. "It's really about understanding people of color and understanding
their culture."
Cheng notes that mentoring efforts are particularly difficult, when there is a lack of
cultural understanding. The "culture gap" means that higher-level managers must receive training on
dealing with a diverse base of individuals. "They need to understand all of their employees'
perspectives, where they are coming from, and they need to understand what are the perceived
barriers to advancement in a company." Cheng adds that despite the difficulty of implementing
change in an organization, this sort of change in the financial services industry is one for the
better, and particularly one that is a boom to the bottom line. She notes, "If you have a diverse
world, you need a diverse staff base to service the financial services clients. We don't live in a
homogeneous world today. The knowledge base and skills set of people from different cultures adds
to the work output, making it all that much richer."
Goizueta's Hershatter adds, "More perspectives, skills and talents greatly enrich the
intellectual capital of the firm and help it to better adapt to the changing demands of the
marketplace. The good old boys' club does not have all the right answers, and, more importantly,
they may not even be broad enough in their perspectives to ask the right questions. The marketplace
is increasingly sensitive to the values of the companies with whom they do business. If a firm does
not want me as an employee, I may not want it as a partner, supplier, or vendor. Any firm that
resists efforts to hire a diverse pool of employees will soon discover that in our flattening
world, the mainstream to which they once belonged is gone, and they are out of touch with the new
environment."
