The financial services industry is a major source of employment in the United States. EEOC data we obtained and analyzed showed that financial services firms we reviewed for this work employed more than 2.9 million people in 2011. We defined the financial services industry to include the following sectors: depository credit institutions, which include commercial banks, thrifts (savings and loan associations and savings banks), and credit unions; holdings and trusts, which include investment trusts, investment companies, and holding companies; nondepository credit institutions, which extend credit in the form of loans and include federally sponsored credit agencies, personal credit institutions, and mortgage bankers and brokers; the securities sector, which is composed of a variety of firms and organizations that bring together buyers and sellers of securities and commodities, manage investments, and offer financial advice; and the insurance sector, including carriers and insurance agents that provide protection against financial risks to policyholders in exchange for the payment of premiums. We previously conducted work on the challenges faced in the financial sector for promoting and retaining a diverse workforce, focusing on private-sector firms.management level in the financial services industry did not change substantially from 1993 through 2008 and that diversity in senior positions was limited. We also found that without a sustained commitment among financial services firms to overcoming challenges to recruiting and retaining minority candidates and obtaining “buy-in” from key employees, limited progress would be possible in fostering a more diverse workplace. In 2010, we reported that overall diversity at the In a 2005 report, we defined diversity management as a process intended to create and maintain a positive work environment that values individuals’ similarities and differences, so that all can reach their potential and maximize their contributions to an organization’s strategic goals and objectives. We also identified a set of nine leading diversity management practices that should be considered when an organization is developing and implementing diversity management. They are (1) commitment to diversity as demonstrated and communicated by an organization’s top leadership; (2) the inclusion of diversity management in an organization’s strategic plan; (3) diversity linked to performance, making the case that a more diverse and inclusive work environment could help improve productivity and individual and organizational performance; (4) measurement of the impact of various aspects of a diversity program; (5) management accountability for the progress of diversity initiatives; (6) succession planning; (7) recruitment; (8) employee involvement in an organization’s diversity management; and (9) training for management and staff about diversity management. Section 342 of the Dodd-Frank Act required specific federal financial agencies and Reserve Banks each to establish, by January 21, 2011, an OMWI, responsible for matters relating to diversity in management, employment, and business activities.agencies. Diversity has remained about the same at the management level in terms of the representation of both minorities and women, while industry representatives noted the continued use of leading diversity practices and some challenges. According to EEOC data, the representation of minorities at the management level stood at 19 percent in 2011. The representation of women in management remained at about 45 percent, according to EEOC data. The nine leading diversity practices that we previously identified in 2005 remain relevant today, according to industry representatives with whom we spoke. Industry representatives also noted some challenges, such as the difficulty in recruitment because of a limited supply of diverse candidates. At the overall management level, the representation of minorities increased from 17.3 percent to 19 percent from 2007 through 2011 according to EEOC data we obtained, which are reported by financial services firms (see fig. 1). While this is not a substantial increase, it shows a continued upward trend from our 2006 report, in which data showed that management-level representation by minorities increased from 11.1 percent to 15.5 percent from 1993 through 2004. The representation of minorities varied among management positions, which EEOC splits into two categories: (1) first- and mid-level officials and managers and (2) senior-level officials and managers. In 2011, the representation of minorities among first- and mid-level managers stood at 20.4 percent, about 1 percentage point higher to the representation of minorities among all management positions, according to EEOC data (see fig. 2). In contrast, at the senior management level, representation of minorities was 10.8 percent in 2011, about 8 percentage points below their representation among all management positions; yet representation of minorities in first- and mid-level management positions consistently increased from 18.7 percent to 20.4 percent over the 5-year period. First- and mid-level management positions may serve as an internal pipeline in an organization through which minority candidates could move into senior management positions. Similar to the total representation of minorities across all management positions, specific races/ethnicities have not changed significantly, but EEOC data show slight variations of representation for specific races/ethnicities. For example, the representation of African Americans decreased from 6.5 percent in 2007 to 6.3 percent in 2011, according to EEOC data (see fig. 3). In contrast, representation of most other races/ethnicities increased, and the highest increase was in the representation of Asians, from 5.4 percent to 6.5 percent over the same time period. From 2007 to 2011, the representation of African Americans went down in both management levels, while the representation of other specific races/ethnicities either increased or remained stable (see fig. 4). At the senior management level, the representation of Asians remained stable at about 4.1 percent from 2007 through 2011. However, the representation of African Americans in senior management positions decreased from 3.1 percent to 2.7 percent, and the representation of Hispanics increased from 3 percent to 3.3 percent. Among first- and mid-level management positions, the representation of Asians increased from 5.6 percent to 6.9 percent and the representation of Hispanics increased from 5.2 percent to 5.5 percent, while the representation of African Americans decreased from 7.2 percent to 6.9 percent. Over the same 5-year period, the representation of women at the management level remained at about 45 percent in EEOC data, which show a slight decrease from 45.1 percent to 44.7 percent (see fig. 5). In 2006, we reported an increase with representation of women at about 42.9 percent in 1993 to about 45.8 percent in 2004. Among all women in management positions, EEOC data showed that the representation of minority women increased, from 20.4 percent to 22 percent over the same 5-year period (see fig. 6). In addition, EEOC data show that the representation of minority men increased from 14.8 percent to 16.6 percent. Among first- and mid-level management positions, the representation of women has been at about 48 percent, slightly higher than the representation of women among all management positions. In contrast, women represented about 29 percent of all senior management positions from 2007 through 2011—about 16 percentage points below the representation of women for all management positions, according to EEOC data (see fig. 7). Based on EEOC data, minority women had greater representation at the first and mid levels of management compared to the senior level over the 5-year period. As shown in figure 7, among female senior managers, representation of minority women remained at about 13 percent over the 5-year period. In contrast, among female first- and mid-level managers, the proportion of minority women increased during the same period from 21.2 percent to 22.9 percent. The representation of minorities increases for both women and men as the firm size increases (see fig. 8). For example, in 2011 the representation of minorities at firms with 100-249 employees was about 18 percent among women and about 12 percent among men, while at firms with more than 1,000 employees, the representation of minorities was about 23 percent among women and about 17 percent among men. For additional analysis of EEOC data by workforce position and industry sector, see appendix II. A survey of the general population shows some similar trends in the representation of both women and minorities in the financial services industry. The CPS is administered by the Bureau of the Census for the Bureau of Labor Statistics and is a monthly survey of about 60,000 households across the nation. The CPS is used to produce official government figures on total employment and unemployment issued each month. According to the CPS data, from 2007 through 2011 the representation of women at the management level decreased from an estimated 49.1 percent to 47.3 percent. In addition, CPS data show a smaller increase from an estimated 14.1 percent to 15.1 percent in the representation of minorities in management over the same 5-year period. The nine leading diversity practices that we previously identified in 2005 are still relevant today, according to industry representatives with whom we spoke. Some industry representatives highlighted practices among these nine that they considered the most important to foster diversity and inclusion in their organizations. For example, top leadership commitment drives the other eight leading diversity practices, according to 9 of 10 industry representatives. In addition, accountability helps to promote the implementation of the other leading diversity practices because an issue is more likely to be addressed if it is tracked, according to 2 industry representatives. Moreover, creating awareness of the benefits of diversity for an organization among management and employees is important because it increases commitment to further the diversity goals of the organization, according to 7 industry representatives whom we interviewed.some firms that do not see the importance of diversity. In addition, 2 industry representatives said these 9 leading diversity practices should be expanded beyond workforce management to include, for example, an organization’s contracting efforts. However, 1 industry representative told us there are still Some industry representatives also noted that measuring the impact of various diversity practices is an important practice but that it can also be challenging; for example, it can be difficult to link specific practices to diversity outcomes and it can be a long-term process.