A New Dawn for D&I Regulation: How Will Hiring Look in the Coming Year?
2024 is shaping up to be another landmark year for the regulatory world, with diversity and inclusion emerging as a continued focus area for the FCA (as per the release of its 2024/25 business plan).
Following the release of consultation papers from the PRA and FCA back in September 2023, we’re expecting to see a finalised regulatory framework for D&I later this year. How will this affect hiring in the coming months? And what does a push for greater workforce representation mean for the future of the industry?
With a general election looming, it’s reasonable to anticipate further changes, particularly regarding the recent decision to remove the bonus cap, a decision that has more implications for D&I than it first seems.
Removal of the Bonus Cap
The widely criticised decision to remove the bankers’ bonus cap falls at a time of rising financial pressures in the UK. The cost-of-living crisis is worsening, and the move has been described as ‘out of touch’ by Darren Jones, the shadow chief secretary to the Treasury.
In part, the decision was made to remedy the inflated base salaries, an issue that, for many, has made it difficult to hire the right talent in recent years.
It’s possible that without the cap, bonuses for high-performing individuals, often concentrated in male-dominated functions, could increase substantially, exacerbating the gender pay gap (which already stands at 9.3% in banking and finance).
According to research from PwC, the UK suffered the largest ranking fall on the annual Women in Work index in 2023, having slipped from 13th to 17th place.
Compliance, Risk, and Inclusive Hiring
Many firms will need to re-evaluate their recruitment process across the entire talent lifecycle if they hope to build a more inclusive, diverse, and dynamic workforce.
Closing the gender pay gap, ensuring compliance, and mitigating financial risk (be it in products or internal infrastructures) will hinge on a company’s ability to attract and retain diverse talent, starting from the top.
As regulatory complexity continues to grow, homogenised teams will likely lack the diversity of thought required to develop retention-enabled, attractive, and innovative environments.
Here at Broadgate, we know that closing skill gaps and providing sustainable solutions to today’s complex financial challenges requires a diversity-focused approach to recruitment. What does that look like?
Using a community-led methodology that creates access to hard-to-reach candidate demographics.
Removing bias from job ads with a language decoding tool.
Taking a consultative approach to ensure hiring managers are equipped to understand the unique needs of diverse talent.
Providing diverse shortlists.
Utilising dual-branding to enhance the employer value proposition
Establishing reasonable adjustment options during the interview process
Supplying regular talent insights to ensure up-to-date market information
D&I’s Impact on the Future of Financial Services
The upcoming regulations represent a significant regulatory burden for Compliance and Risk functions, but they’re also an opportunity for firms to differentiate themselves from the competition and make a positive impact on the future of financial services.
Inclusive firms are more attractive to top talent than ever before, provided they have the policies and initiatives to support their efforts and move beyond tick-box diversity.
Whether you’re hoping to hire or get hired, our specialist consultants have the network, technical market knowledge, and passion needed to support you.
If you’re hoping to build out a network of your own, watch this space! I’ve got an in-person networking event coming up, and it’s focused on women in compliance. Follow Broadgate Social for more information: https://www.broadgatestaffing.com/community.
