What Can You Do to Support Under-Represented People in Finance?
By Samantha Lamas, Behavioural Researcher, Morningstar US
and Sophia Logan, Decision Science intern, Morningstar US
Professional networks lead to job referrals and meaningful mentorship. The network gap makes it harder for people without connections to break into the finance industry. Here’s how we can start to bridge this gap.
As active participants in finance, we have access to powerful tools for helping mitigate systemic racism within both our own organisations and the industry as a whole: our networks of influence and our professional expertise.
Mentorship and networking play a key role in breaking into and advancing within the finance sector. LinkedIn research shows that a referral from someone in a company made a candidate 9 times more likely to get the job and more than 70% of professionals are hired at companies where they already have a connection. But if a company’s employees are primarily white, or primarily male, they’re likely to have personal connections with people of the same background, and the company’s lack of diversity persists.
This phenomenon, known as the network gap, is why it can be difficult for qualified minority candidates to find positions in the finance industry. And the struggle to recruit and retain diverse talent means the industry may not be availing itself of a large pool of talent.
The network gap in finance
One way we can all strive to include more people of colour in finance is to expand our own network. For many of us, we tend to network with people that look a lot like us. That’s because we all have a tendency toward homophily: We prefer to form “network ties” with people we believe to be like us. We often feel more comfortable around people of the same age, religion, education, occupation, gender, and, most of all, race and ethnicity. Although this tendency is natural, it’s something we have to acknowledge and combat.
How you can help close the network gap
So, what does combating homophily look like? We’ve created a checklist, inspired by former LinkedIn CEO Jeff Weiner’s “Plus One Pledge,” that describes what you can do to contribute your time, expertise, and influence to be a diversity champion in the finance industry. By making even a small change to your network, you can make a big difference.
If you want to get involved but don’t have much time:
Time: Attend one event a year. Focus on events run by organisations and programs that are focused on diversity and inclusion initiatives. (See our list below for a few examples.) Make sure they are public events intended for the entire community. Also, take the time to inquire about your employers’ efforts to connect with diverse individuals and if there’s a way you can get more involved.
Expertise: Schedule one week this year where you’re available to have coffee chats with five to seven under-represented people interested in your work. Try to make these chats casual and be open to conversations about interviewing techniques, resume building, networking, or career paths.
Influence: Follow diversity- and inclusion-focused organisations on social media.
If you want to get more involved:
Time: Attend three diversity-focused events a year.
Expertise: Reach out to diversity affinity groups at your alma mater. Volunteer to connect with individuals in those groups and/or to speak at their next event to share your expertise and experience.
Influence: Comment on and share posts published by diversity-focused organisations. On most social media sites, engaging with a post will then prompt that post to appear to others in your network.
If you have the capacity to do more:
Time: Attend five diversity-focused events a year.
Expertise: For every referral you make for someone in your network, commit to having a coffee chat with one under-represented person outside your network to offer your expertise about your industry, resume tips, or perspective on career path strategies.
Influence: Post on LinkedIn regularly that you are open to having networking calls with people outside your network. Not only will this encourage people to reach out to you, it will set an example for your peers to take similar action. As you become more involved with diversity affinity groups, post about what you are doing and try to encourage your network to participate. Your friend or colleague will be more likely to engage with under-represented individuals if they see you doing it.
Tackling a few tasks on this list doesn’t take a lot of time and can have a huge impact on someone’s life. We hope you see the value you can contribute by having simple conversations with people who might not usually be part of your network.
Introduce yourself and explain your purpose:
“Hi, my name is Samantha Lamas, and I’m a behavioural researcher at Morningstar. I’m looking to offer my expertise and experience to those outside my network. Let me know if you would like to chat to see how I can help you with your career.”
Explain your career journey and background.
Ask the person about their career journey and background.
Get to know the person by asking questions like:
- What do you think your strengths are?
- What do you think you need to work on?
- What do you feel passionate about?
- What are your goals?
Frame the discussion around their needs
Ask the person what they need help on. For example:
- Interview tips
- Resume building
- Networking tips
- Access to job opportunities
- Career advice
If the person is still in school, make course recommendations based on your experience.
If the person is looking to pursue a career similar to yours, explain the steps you took to complete a project in your current job, help them with a project they are currently working on, or propose working on a case study together.
Ask for feedback
These conversations can be enlightening experiences for both parties. Ask the person how they think you should approach your next networking conversation.
Since its original publication, this piece may have been edited to reflect the regulatory requirements of regions outside of the country it was originally published in.
This document is issued by Morningstar Investment Management Australia Limited (ABN 54 071 808 501, AFS Licence No. 228986) (‘Morningstar’). Morningstar is the Responsible Entity and issuer of interests in the Morningstar investment funds referred to in this report. © Copyright of this document is owned by Morningstar and any related bodies corporate that are involved in the document’s creation. As such the document, or any part of it, should not be copied, reproduced, scanned or embodied in any other document or distributed to another party without the prior written consent of Morningstar. The information provided is for general use only. In compiling this document, Morningstar has relied on information and data supplied by third parties including information providers (such as Standard and Poor’s, MSCI, Barclays, FTSE). Whilst all reasonable care has been taken to ensure the accuracy of information provided, neither Morningstar nor its third parties accept responsibility for any inaccuracy or for investment decisions or any other actions taken by any person on the basis or context of the information included. Past performance is not a reliable indicator of future performance. Morningstar does not guarantee the performance of any investment or the return of capital. Morningstar warns that (a) Morningstar has not considered any individual person’s objectives, financial situation or particular needs, and (b) individuals should seek advice and consider whether the advice is appropriate in light of their goals, objectives and current situation. Refer to our Financial Services Guide (FSG) for more information at morningstarinvestments.com.au/fsg. Before making any decision about whether to invest in a financial product, individuals should obtain and consider the disclosure document. For a copy of the relevant disclosure document, please contact our Adviser Solutions Team on 02 9276 4550.
How we look after your savings
- A key focus on risk management, not just the potential for returns
- Increasing your buying power
- Today’s best investment opportunities