Corporate finance and accounting significantly underperforms in a number of key metrics for diversity, equity and inclusion (DEI), according to Gartner's Labor Market Survey, released Tuesday.
People of color comprise just 11% of the total workforce in corporate finance, and just 6% of senior finance roles; women comprise 52% of the workforce, and 40% of leadership.
Finance and accounting ranks among the lowest in terms of diversity of any corporate function, and is worse than the departmental average for employing people of color by 6 percentage points, Gartner found.
The findings come from an analysis of Gartner's Labor Market Survey data, collected throughout the second quarter of 2020, which included more than 25,000 global employee respondents.
"It's concerning to see finance's poor performance in DEI, particularly when CFOs themselves play a direct role in the resource allocation decisions," Kotei Kotey, a senior advisory specialist in the Gartner Finance practice, said.
"Talent retention can't be just an HR issue, it has to be addressed at every functional level within every department," Kotey told CFO Dive in an interview Tuesday. "CFOs need to look at every level within their department, not just entry level analysts and accountants. Look at who your managers are, who's on your exec leadership team, and who you're working closely with."
CFOs should consider why someone would want to join their company, because the biggest impact on employee retention is salary and opportunity for growth, which must intersect with finance, Kotey said.
Lack of executive diversity shouldn't be categorized as a hiring problem, Kotey said. Finance leaders can wield significant power in ensuring a diverse C-suite by "making themselves available to mentor and influence junior-level diverse candidates, as well as prioritizing funding for company and department-wide DEI initiatives," he said.
Though 52% of finance employees are women, much higher than the 42% average for all corporate functions, women comprise nearly 60% of junior-level roles and only 40% of senior roles, the survey found.
The drop-off in advancement is more pronounced for employees identifying as people of color; 16% filled junior-level roles, and only 6% filled senior-level roles.
"Much of the focus on improving diversity has been placed at the hiring level," Kotey said. That system falls short when entry-level employees are not encouraged to advance through company ranks.
Connecting junior-level employees with senior-level mentors from similar backgrounds is a key method of improving results, Kotey said.
Kotey outlined additional recommendations for CFOs on how to prioritize clear communications around career path clarity:
Clearly outline needed steps towards advancement within the finance department
Closely examine any areas potentially causing a drop-off in the talent pipeline for diverse employees
Encourage a culture of lateral movement by making it easy for employees to find internal opportunities and provide adequate financial compensation for doing so
Establish guidelines to ensure managers are communicating new roles and opportunities to all employees.
The finance department, much like human resources, is uniquely positioned to support organizational change. It can advocate for resources and provide finance-specific expertise to assist other functions, Gartner said.
"Progressive finance leaders [can] partner with HR to establish pay equity metrics, encourage consistent financial accountability, and assist other departments in setting up DEI budgets," Kotey said. "CFOs should be motivated to do better; beyond it being the right thing to do, DEI metrics will increasingly be a part of how society, investors and the media view an organization."