The Canadian financial services industry has experienced extensive growth over the past few decades. As it has grown, so too has the discrepancy between diversity standards and where the industry currently stands.
As firms are realizing that diversity, equity, and inclusion (DEI) are no longer “nice-to-haves”, but rather table stakes, there is a new impetus for change. The CVCA recognized this and in 2019, made their first effort to try to quantify the diversity within the PE & VC space with limited data. This year, they’ve partnered with Diversio to follow up and see what progress has been made in the two years since the initial report, and on Thursday, February 17th released the “2021 Canadian Private Capital State of Diversity, Equity, and Inclusion Report.”
The CVCA Report Provides a Glimpse into Private Equity
As we have seen breakthroughs this year in the world of diversity in venture capital, another emerging trend has surfaced – private equity is lagging behind. By partnering with the CVCA, there has been work to shine light on the progress being made in the financial sector as well as the challenges.
Emerging research suggests that while changes are beginning to gain traction, the Private Equity industry is slow-moving in respect to DEI, especially when compared to the Venture Capital space. The study analyzed out of 238 PE Partners, only 21 were women (9%), while of the 319 VC Partners surveyed, 62 (19.4%) were women. This shows that private equity has not made significant gains when it comes to adding more women to their senior ranks.
But, when it comes to racial and ethnic minority representation, the study found that PE Partner rose from 6 to 10% for a 67% increase.
Inclusion Matters Now
The same study states, “Diversity on its own is not enough. Research has shown that once individuals from underrepresented backgrounds enter the workplace, they are more likely to be faced with exclusion, biases, discrimination and even harassment, which make success and long-term career growth in the sector difficult.”
Companies have understood that they need diversity and are beginning their journey. However, diversity without inclusion will create an environment with substantial churn – your diverse talent will leave to a firm that has made the leap. The study conducted found that compared to male Partners, women Partners in PE are nearly 12x more likely to report harassment in the workplace or feel like their opinions are not heard or valued. They are also 3x more likely to feel like the person they report to is unfair. It also found all members of the non-management level report low scores for career development in PE.
While diverse recruitment policies are essential to achieve these goals, it is the firm’s internal policies and culture that drives diverse employees to feel included and stay at the firm. Firms that can achieve this are on track to create a productive and inclusive environment that is more conducive to growth and innovation.
All that’s left to ask is – the future is inclusive, but is Private Equity?
This post was written by Diversio, they are an exhibitor on the HRTech247 Diversity & Inclusion floor of the Technology Hall. You can visit their virtual space here