July 5, 2022 – The past two years have seen significant progress in raising awareness and opening a national dialogue around racism and diversity, equity, and inclusion. There has been tragedy, with the murder of George Floyd, for example, and triumph with the recognition of Juneteenth as well as the election of Kamala Harris as America’s first black Vice President and Ketanji Brown Jackson as the first black woman to serve on the Supreme Court.
In a recent study, executive recruitment firm Jensen Partners sought to better understand where DEI stands within the search industry, tracking 207 black front office distribution professional hires from Jan. 1, 2019 to June 2022. The findings offered both a sense of hope combined with sound guidance for moving forward. “While there has been progressing in diverse hires, there remains a long way to go to achieve true gender and racial equity in the workspace for women and people of color,” said Sasha Jensen, the search firm’s founder and chief executive officer. “And in working towards this goal, it is crucial to recognize that racial and gender discrimination and inequity are the context within which much economic activity exists.”
“Focusing only on percentages of women or minorities in the workforce only captures a portion of the DEI landscape and fails at addressing the root causes of the issue at hand,” said Ms. Jensen. “Therefore, firms must think broadly about the impacts of systemic racism and sexism on women and communities of color and ensure that their DEI conversations focus on questions around racial and gender justice.
In its analysis, Jensen Partners looked at data of front office distribution professionals before and after May 25, 2020, the day George Floyd was murdered, to measure progress from the outcries of racial justice. “We found that there has been notable progress in the overall number of black front office distribution professional hires in terms of year over year hiring activity,” said Ms. Jensen.
More Action Needed
More specifically, the study found that between 2019 and 2020, black distribution professional hires increased by 50 percent (36 in 2019 vs. 54 in 2020), and black distribution male hires rose by 76 percent (21 in 2019 vs. 37 in 2020). On the other hand, black distribution female hires only saw a 13 percent increase (15 in 2019 vs. 17 in 2020).
Between 2020 and 2021, however, Jensen Partners noted a reverse trend, with a 76 percent increase (30 hires in 2021) in black distribution female hires compared to a 38 percent increase (51 hires in 2021) in black distribution male hires.
As founder and CEO of Jensen Partners, Sasha Jensen leads a team of senior recruitment specialists and data scientists dedicated exclusively to the sourcing, recruitment and placement of capital raising and investment professionals for leading alternative investment firms. As a former investigative journalist, Ms. Jensen firmly believes that data substantiates an immediate call to action. As a woman-owned business, Jensen Partners was founded in 2012 on the principle that diversity is a critical and immediate need in the alternative investment space.
Said Ms. Jensen: “While this progress is commendable and validates numerous firms’ commitments to improving DEI by signing on to industry initiatives, such as the Institutional Limited Partners Association’s (ILPA) Diversity in Action initiative and, most recently, the CFA Institute’s diversity, equity, and inclusion code, our analysis suggests that more action is needed to deliver on these commitments truly.”
The study also found that male front office distribution professionals represented 62 percent of all black distribution professional hires and were more likely to hold senior roles than their female counterparts. Between January 2019 and June 2022, of the 207 black distribution professional hires, women represented only 38 percent of all hires, compared to 62 percent of male hires. Similarly, Jensen Partners found that black male professionals in distribution were more likely to be hired for both junior and senior roles, with a 31 percent placement rate for both roles. In its analysis, the firm noted that the majority of the 79 black female professionals in distribution held Junior positions.
A Need to Nurture DEI
“However, an increased number of black female front office distribution professionals are being promoted to senior positions,” said the study. “Although we noted that black male distribution professionals are more likely to hold senior positions, our data shows that the number of black female distribution professionals hired into senior roles has increased over the years.”
For instance, the hiring of black distribution females into senior positions increased from six hires in 2020 to 10 in 2021, suggesting an upsurge of 67 percent. “This progress is particularly significant, considering that the hiring of black distribution females into senior positions increased by only 20 percent between 2019 and 2020,” said Jensen Partners.
“Again, although these developments suggest consistency in efforts to create a more inclusive work environment by positioning diversity as an integral part of the hiring process, there remains a need for firms to nurture diversity and inclusion more intentionally if racial and gender equity is to be achieved holistically,” said Ms. Jensen.
When analyzing black front office distribution professional hires between 2019 and June 2022, the search firm also looked at Caucasian front office distribution professional hires during the same period. Of the 5,598 Caucasian and black professional hires, the majority (5,391, or 96 percent) were Caucasian professionals, whereas only the remaining four percent (or 207) were black professionals.
The study found that overall, black front office distribution professionals were less likely to hold a senior seat when compared to their Caucasian counterparts. Of the 207 black front office distribution professionals, only 90 (or two percent) held senior positions, whereas this number was 49 percent (or 2,736 professionals) for their Caucasian peers.
Furthermore, of the 90 senior positions black front office distribution professionals held, only 26 (or 13 percent) belonged to female professionals, while this number was 16 percent (or 889 professionals) for their Caucasian counterparts. Similarly, this number was 31 percent (or 64) for black male professionals, compared to 34 percent (or 1,809) for Caucasian male professionals. “These findings suggest that in both racial groups, women are less likely to hold senior positions than men,” said Jensen Partners.
Since 2019, there has never been a gender parity in firms’ hiring activities, with women consistently representing less than 50 percent of all hires, said the report.
“Another area of concern is gender balance and the representation of women overall,” said Jensen Partners. “According to our data, front office distribution women represented 41 percent of all hires in 2019, which decreased to 35 percent in 2020. In 2021, there was an uptick of 17 percent, with women representing nearly 40 percent of all hires, and so far, in 2022, this number has only nudged up one percent.”
Expecting an Increase
“In terms of both race and gender, the situation is even more concerning for black front office distribution female professionals who consistently represent less than two percent of all hires.”
Jensen Partners Launches New Platform to Address Diversity Hiring
Jensen Partners, a woman-owned executive search and corporate advisory firm for the alternative investment management industry, will launch DiversityMetrics, a software platform to combine self-reported diversity data and human capital management technology specifically designed for asset managers seeking to quantify, measure, report and improve workforce diversity and inclusion – both within their own organization and across their portfolios. The DiversityMetrics platform features a high-tech, high-touch approach that combines customizable data visualization tools with verified demographic data on more than 25,000 investment and distribution professionals, including 8,000 who identify as having a diverse background, working at more than 600 global, alternative investment firms.
“We know that the alternative investment industry has a diversity problem, and each new data point and anecdote provides added evidence that we can use to identify where the gaps are and make specific recommendations for progress on diversity, equity and inclusion (DEI),” said founder and CEO Sasha Jensen. “The power of the DiversityMetrics platform is that it allows alternative asset managers to quantify and qualify the intersectionality of race, class and gender across their workforce, and then use that data to make data-driven decisions about best practices and ensures that the slate of candidates in any given human capital engagement are richly diverse.” It is a product long overdue for the financial sector, which has had its share of diversity hiring problems for years.
In 2019, the study found, black front office distribution female professionals represented just under two percent of all hires compared to 39 percent for Caucasian females. In 2020, this number decreased for both black and Caucasian female professionals at one percent and 33 percent, respectively. In 2021, although there was an uptick of 37 percent, black female professionals represented less than two percent of all hires at one percent, while their Caucasian peers represented 38 percent. So far, in 2022, black female professionals have represented about two percent of all hires.
“Although these findings suggest that there is room for significant improvement, we are confident that an increasing number of firms will incorporate DEI lens into their hiring activities over the coming months,” said Ms. Jensen. “In fact, with the increased pressure to address inequality and growing demand for DEI-oriented search mandates by lawmakers and investor network groups, such as the PRI, we expect to see an uptick in the diversity numbers in future quarters.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media