Often, moments of crisis show us what we are really capable of - and what matters most - when we are pushed to act. That’s true of the COVID-19 pandemic, which challenged financial services firms to rethink deeply entrenched approaches, learn to serve clients digitally, rework trusted financial models, and shift to virtual workplaces.
Now, the true leaders in our industry can apply that same ingenuity to tackle the longstanding challenge of workplace diversity, equity and inclusion (DEI). The past year has revealed that we must confront workforce inequality, among women, persons of different ethnicities and all under-represented communities, if we want to embed lasting resiliency and relevance within our organizations.
A case for DEI, someday:
Prior to the pandemic, there was growing buy-in to the principles of diversity, equity and inclusion (DEI), at least from a “We should do this” perspective. This acknowledgement among employers came from ample research that connected DEI to the bottom line. For example, the Boston Consulting Group revealed that companies with more diverse management teams achieved 19 percent higher revenues due to innovation.2 In a similar vein, a study of profitable companies in 91 countries by the Peterson Institute for International Economics indicated that companies with 30 percent representation of female leaders attained a 15 percent increase in the net revenue margin.3
Despite such compelling evidence, the composition of the executive suite has been slow to change in financial services. It was reported that, among financial services firms in 37 countries, the percentage of women in leadership roles in banks and insurance companies remains in the low 20 percent range.4 The US Congress drew similar conclusions regarding women’s representation in the top tiers of US banks, and added that racial diversity at the executive level stood at just 19 percent.5
The “E” in DEI stands for equity— the fair treatment, access, opportunity, and advancement for all people, while at the same time striving to identify and eliminate barriers that have prevented the full participation of some groups. Improving equity involves increasing justice and fairness within the procedures and processes of institutions or systems, as well as in their distribution of resources.
People pressures revealed by pandemic
Unfortunately, the pandemic may have imposed a serious setback for DEI efforts. First, diversity in many workplaces has taken a hit since the pandemic began, with considerable data showing how women and racialized communities have been disproportionately impacted by this health crisis. We have observed higher unemployment among women and Black and Hispanic females than among white males, prompting many to call the current condition a ‘She-session’.6
Second, we are starting to see the longer-term consequences, as many women – who often face the dual burden of juggling work and care-giving duties – choose not to return to work, even as the economy improves.
And, we’re likely to see more women deciding to withdraw from the workforce due to these pressures. A recent WerkLabs study found that, since the pandemic began, self-reported job satisfaction among women is 27 percent lower than for men in similar circumstances, and women are twice as likely as men to consider leaving their employer within a year.7 Similar trends were noted since the COVID-19 crisis, specifically among mothers of young children who are far more likely to downsize or leave the workforce entirely than men.8
To add to the problem, current economic conditions may distract some employers from setting or taking action on DEI objectives. We witnessed this during the 2008 Global Financial Crisis when HR professionals actually reported a decline in many DEI activities and investments.9
Turning crisis into advantage
Although the preceding narrative may suggest a poor prognosis for the DEI movement, there is actually room for optimism – and fresh momentum for action – thanks to the very same pandemic we are now wading through.
For starters, there is growing awareness of the impact of the pandemic on marginalized groups, as news media report on the plight of women working in the health and service sectors, in addition to the worldwide protests over racial inequality. And, during the pandemic lockdowns, nearly everyone – including senior executives working from home – has gained a greater appreciation of the difficulties of balancing work and family obligations, and therefore the need for increased flexibility on the part of employers.
Essentially, the pandemic has cast a spotlight on many long-standing societal issues that were previously easier to overlook. Now, many companies are stepping forward and declaring that DEI is no longer something “We should do,” but rather it is something “We must do” to resolve these inequities.
Alongside this increased willingness by corporate leaders to act, the pandemic has shown major organizations that they can pivot on their foundations when required. Seemingly overnight, they have redesigned products, re-written previously ‘untouchable’ policies, and rolled-out massive systems changes in response to a drastically changed operating landscape.
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Within the Human Resources function, many financial services firms quickly transitioned most of their employees to remote work and introduced revised benefits, compensation and wellness programs to resume operations safely and productively. Naturally, there have been ‘bumps’ along the way, but such bold steps show that even the most monolithic, traditional organizations can implement effective change.
This “Let’s just give it a try” mindset could help fast track many DEI initiatives, whether by extending temporary flexible work arrangements to become permanent, or piloting new employees support that respond to gaps revealed by the crisis. We’ve already seen a number of major institutions announce bold changes to the way they serve customers to address systemic racism, and similar action can be taken to enhance internal practices.
Post-pandemic pivot to move DEI forward
With the case neatly laid out for the financial services industry to embrace DEI as a business imperative, here are five strategies that top employers are modelling to make meaningful progress towards their DEI commitments:
- Set the tone at the top: Put simply, senior leadership must make DEI a stated priority. CEOs and their executive teams must set real targets, fund initiatives and appoint management to lead programs with clear accountability. And the C-suite leaders must walk the talk by modeling these new expectations.
- Mandate culture change: Develop or evolve your company’s culture and values going forward and connect them to your organizational purpose. Communicate the change enterprise-wide to explain the rationale and lay out expected behaviors and people practices, including hiring and promotion. Build a culture not just about rules but also to create an atmosphere where open, honest conversation is welcome and everyone can be their authentic selves, speak up and challenge the norms. Include all employees at all levels in the journey and embed strategies to measure and recognize the adoption of these values and behaviors.
- Listen to diversity groups: Form and empower internal diversity groups as safe spaces for employees to connect, share and contribute to organizational culture change. You can partner with respected external community groups with expertise, networks and credibility. Then, listen to these groups and involve them in DEI plans.
- Get better insights from data: Intensify your use of data & analytics to understand and respond to DEI challenges. Collect and analyze richer workforce data, both internal and external, to understand current workforce and market attitudes, needs and issues. Then, track granular performance and progress in reaching D&I targets.
- Reimagine workplace programs: With a DEI lens, review existing workplace programs for alignment, from hiring to promotion, to benefits and wellness supports and introduce relevant new employee-centric offerings. Ensure performance management programs recognize and address potential issues and challenges faced by diverse groups.
This combination of actions to satisfy both ‘hearts and heads’ are among the essential steps to drive workplace diversity and inclusion. Although many of these activities no doubt require carefully-considered, multi-year transformation, they can produce measurable outcomes to benefit employees and the organization.
The past 12 months have proven not only how business leaders can turn crisis into a new competitive edge, they have also illustrated that action on DEI is more than the right thing to do at this moment in history. It is the only way forward, if we want to build lasting resiliency, based upon a dedicated, inspired, loyal and healthy workforce, and earned relevance and trust in the eyes of customers, shareholders and all of our diverse stakeholders.
3 The Peterson Institute for International Economics, ‘Is gender diversity profitable?’ (PDF 2.2 MB) Feb. 2016,
4 Oliver Wyman, ‘Women in Financial Services 2020’ (PDF 2 MB),
5 US Finance Committee on Financial Services, ‘Diversity and inclusion: holding America’s large banks accountable,’ Congress Second Session, Feb. 2020,
7 WerkLabs, ‘Work Now Report: How the pandemic is changing work,’ April 2020,
8 McKinsey & Company, ‘Women in the Workplace 2020,’ 30 Sept. 2020,
9 Society of Human Resource Management, ‘Should diversity pay the price in an unstable economy?’ Jan. 2, 2009
This article was originally published on kpmg.com by Laura J Hay, Global Head of Insurance, KPMG International.