By : Mush Ali (ACA) , Posted on: 07th, July 2023

Why does a lack of gender diversity still exist and why do businesses need to make a change?.

In addition to our day-to-day recruitment objectives, One Ten Associates regularly provides market intelligence to both our candidates and clients. We use our industry experience and research findings to provide support and guidance to clients on key matters challenging the market. A topic of continued interest is diversity within the workplace. The benefits of a diverse workforce are endless and although many businesses are recognising the importance there’s still a way to go, particularly within the alternative investment space. Positions, especially senior level, are considerably underrepresented by women: according to Preqin data discussed in a recent HedgeWeek article “only 7.1% of hedge fund board positions are filled by women.” There’s clearly a lot of work to do to reach a better balance of diversity, and while it seems the sector is keen to meet these needs, the latest Preqin data also says only 5% of private equity and hedge fund firms are introducing diversity and inclusion initiatives to their funds.

What can firms do to help progression?

A significant part of our search process is to explore every avenues for our clients, and that includes supporting them with their DEI goals. There are a number of reasons why a lack of diversity still exists in the fund industry, but these shortfalls also provide opportunities for improving company wide diversity. Considerations may be:

Mentorship and networking: This is a great way to break down communication barriers and provide opportunities for advancement.
Work-life balance: Continued discussions on home, family and work-life balance helps to build a diverse workforce.
Unconscious bias and stereotypes: Educating employees about how these biases can play a detrimental role in the hiring and promotion decisions and how this can be avoided.

Why is a diverse workforce so important?

There are a multitude of reasons why a diverse gender workforce is important. It can benefit a firm’s bottom line, but it can also improve morale and mental health of employees. According to McKinsey and its latest Diversity report “…the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time.” Some institutional investors now review how diverse the firms are that they are investing in and basing their funding allocation decisions on this. Legislators are also starting to place emphasis on transparency of diversity in workplaces.

If firms want to improve recruitment and retention of a diverse workforce, they will need to place emphasis on their efforts to improve DEI practices. We’re pleased that firms are asking us what we’re doing to encourage more diverse talent pools. We appreciate that the talent pool within the fund sector is limited, and we believe that industry leaders need to focus their efforts on educating at a school and university level so that opportunities become more widely available to everyone. We are keen advocates of protecting mental health in the workplace. We believe that a diverse workforce which is driven by a strong company culture that encourages transparent communication will improve the mental health of its employees. This is a process, and we are pleased to be part of the conversation.

Resources

https://www.hedgeweek.com/2022/10/20/318009/hedge-funds-wake-importance-dei

https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters