Also, a diverse workforce can help  managers understand and address the needs of a demographically  diverse customer base. Management-Level Representation of Women and Men Has Been Unchanged since 2007, with Representation of Minority Women and Men Increasing Marginally

			Trends in Overall Management

Representation of women and men at the overall management level in  the financial services industry has remained unchanged from 2007  through 2015, with women representing about 45 percent of managers  and men representing about 55 percent over time. African-American and Hispanic men had similar representation in  management positions during this time period. Representation of women among first- and mid-level managers and  senior-level managers was around 48 percent and about 29 percent,  respectively, from 2007 through 2015. Financial Services Sector Trends Have Similarities and Differences Compared to Other Sectors

Representation of minorities increased from 2007 through 2015 in the  financial services sector, the professional services sector, and the overall  private sector at both the senior-level and the first- and mid-level of  management, as shown in figure 12. Potential Talent Pools for Financial Services Positions, Including Management, Are Diverse

Potential employees for the financial services industry who could be an  external pool for becoming managers can come from a wide range of  academic and professional backgrounds. A majority of the external pool of potential talent for the financial services  industry, that is, those obtaining undergraduate or graduate degrees,  have been women in recent years (see fig. As previously  noted, minorities have represented from 17 percent to 21 percent of  overall management in the financial services industry from 2007 through  2015. Firms and Other Sources Cite a Variety of Recruiting Challenges and Practices That May Help Address Them

Representatives from financial services firms and organizations that  advocate for women or racial/ethnic minorities described a variety of  challenges to recruiting a diverse workforce for the financial services  sector, many of which we have described in previous reports on the  topic. Firms and Stakeholders Generally Agree on the Value of Assessing Workforce Diversity and Inclusion, but Differ on Benefits of Making Data Public

Representatives of financial services firms told us that it is useful for  financial services firms to analyze demographic data to assess diversity  of their workforce and identify trends that may need to be addressed. Representatives of financial services firms and organizations that  advocate for diversity varied in their views on whether data on the  demographic characteristics of employees at specific financial services  firms should be shared publicly, for example through diversity indexes or  on the company’s website. One representative noted the reputation of firms that are not  diverse could be damaged, which could make improvement of workforce  diversity more difficult. For example, one representative stated that requiring businesses to be  transparent about their workforce diversity data creates incentives to  improve the diversity of their workforce. We received technical  comments, which we addressed as appropriate. GAO staff who made major contributions to this report  are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to examine (1) trends in management- level diversity in the financial services industry, (2) trends in diversity  among potential talent pools, and (3) challenges financial services firms  identified in trying to increase workforce diversity and practices firms used  to increase workforce diversity. Trends in Management- Level Diversity

To describe management-level diversity in the financial services industry,  we obtained 2007–2015 workforce data from the Equal Employment  Opportunity Commission’s (EEOC) Employer Information Report (EEO- 1). Appendix III: Diversity in the Financial Services Industry by State, 2015

This appendix provides information on management representation in the  financial services industry by state in 2015.
Why GAO Did This Study

The U.S. workforce force has become increasingly diverse and is projected to become even more diverse in the coming decades. As a result, many private sector organizations have recognized the importance of recruiting and retaining minorities and women for key positions to improve their business or organizational performance and help them better meet the needs of a diverse customer base. The financial services industry is a major source of employment in the United States and affects the economic well-being of its customers. However, questions remain about diversity in the financial services industry, which provides services that help families build wealth and are essential to economic growth.
GAO was asked to analyze diversity trends in the financial services industry, particularly in management positions. This report examines (1) trends in management-level diversity in the financial services industry from 2007 through 2015, (2) trends in diversity among potential talent pools, and (3) challenges financial services firms identified in trying to increase workforce diversity and practices firms used to address them.
GAO analyzed data from the Equal Employment Opportunity Commission (EEOC) and the Department of Education. The most recent available data were from 2015. GAO also reviewed studies on workforce diversity and interviewed representatives from financial services firms and organizations that advocate for the financial services industry, women, or minorities. EEOC provided technical comments on a draft of this report that GAO incorporated as appropriate.

What GAO Found

Overall representation of minorities in first-, mid-, and senior-level management positions in the financial services industry increased from about 17 percent to 21 percent from 2007 through 2015. However, as shown in the figure below representation varied by race/ethnicity group and management level. Specifically, representation of African-Americans at various management levels decreased while representation of other minorities increased during this period. Overall representation of women was generally unchanged during this period. Representation of women among first- and mid-level managers remained around 48 percent and senior-level managers remained about 29 percent from 2007 through 2015.
Potential employees for the financial services industry, including those that could become managers, come from external and internal pools. For example, the external pool includes those with undergraduate or graduate degrees, such as a Master of Business Administration. In 2015, about 33 percent of the external pool included minorities and around 60 percent were women. The internal talent pool for potential managers in financial services includes those already in professional positions. In 2015, nearly 28 percent of professional positions in financial services were held by minorities and just over 51 percent were held by women.
Research, financial services firm representatives, and financial industry stakeholders described challenges to recruiting and retaining members of racial/ethnic minority groups and women and practices that could help address these challenges, including recruiting from a wider variety of schools. Firm representatives said that it is important for firms to assess firm-level data on diversity and inclusiveness. However, firm representatives and other stakeholders differed in their views on whether firm-level diversity data should be made public. For example, one stakeholder stated that sharing diversity data publicly would create incentives for improvement. However, a firm representative said that for firms that are not diverse, making employee diversity data public could make improvement of workforce diversity more difficult for them.