Employee perceptions of diversity and inclusion efforts at hedge funds have dropped to their lowest level in four years, according to a report by Reuters citing Reboot Financial Services’ Race to Equality 2024 report released on Tuesday.
The report, conducted in partnership with research firm Coleman Parkes, highlights a decline in how financial sector employees view workplace actions to improve ethnic and racial diversity.
The report surveyed over 100 hedge fund employees in the United Kingdom, asking them to rate their workplace on various aspects of diversity and inclusion, such as recruitment, culture, leadership, training, and career progression. Hedge funds scored 64.3 out of 100, the lowest among financial sectors including insurance, pensions, asset management, and investment banking.
Insurance companies led the rankings, earning the highest diversity and inclusion scores, with pensions following closely behind. However, wealth management firms also saw employee perceptions decline to their lowest point since 2021.
The findings were part of a broader survey of 800 financial professionals conducted between August and September 2024. Respondents included 700 ethnic minorities and 100 white employees, each with at least 10 years of experience in the finance sector.
While two-thirds of employees reported being encouraged to contribute to building an inclusive workplace, nearly half said they faced pressure against advocating for racial and ethnic equality.
Some 40% of respondents were told to tread cautiously when raising diversity issues, while 45% of ethnic minority employees reported experiencing pressure to stay silent, compared to 35% of white employees, and 39% of all respondents observed efforts to “muzzle diversity advocates” over the past two years.
Baroness Helena Morrissey, chair of The Diversity Project, expressed concern over the findings. “With so little progress made to date and heightened racial tensions across the UK, it seems extraordinary that financial firms’ efforts to improve racial equality are diminishing or under threat,” she said.
The decline in diversity scores comes despite broader steps across the UK to address workforce inequality. Regulatory requirements, such as gender pay gap disclosures, have increased scrutiny on financial firms, exposing the sector as one of the most unequal in the UK.
