Banks, forced to rely on video to interview college students, say it has the added benefit of diversifying the ranks.
JPMorgan Chase & Co.’s decision to depend on virtual interviews, predating the coronavirus outbreak, has allowed the firm to connect with more candidates from more schools than ever before, said Robert Walke, global head of wholesale revenue campus recruiting. Goldman Sachs Group Inc. made a similar shift five years ago.
The initiatives are intended to increase diversity by reaching beyond the handful of elite business schools and Ivy League universities long associated with Wall Street.
Determining how much progress recent recruitment changes have made in the makeup of the finance sector is difficult given the size of the industry and a lack of comprehensive employment data from schools and financial institutions. But a July study of LinkedIn data from 13 large U.S. and U.K. banks found the industry remains staffed disproportionately by graduates from elite private schools.
“We really have a true commitment to diversity, and the only way to really achieve that is by ensuring that you have a real mix of backgrounds, particularly within schools and the general education background we’re hiring from,” Walke said in an interview.
There are early signs the changes are having an impact: In 2015, the year before the start of Goldman’s new process -- which entails video interviews in which candidates record their answers to questions -- the bank interviewed less than 20 per cent of campus applicants, Dane Holmes, then head of human capital management, said in a Harvard Business Review article last year. By 2018, that figure rose to almost 40 per cent, and the number of schools worldwide from which students were interviewed increased to 1,268 from 798.
“The top of our recruiting funnel is wider, and the output is more diverse,” Holmes wrote.
Wall Street is under scrutiny for its lack of diversity. There was only one Black executive among more than 80 people included on the elite teams atop the six largest U.S. banks as of mid-June. And the problem extends beyond the top ranks, with African Americans, who make up more than one-seventh of the U.S. population, representing less than 10 per cent of middle managers at the country’s top banks.
To increase diversity, “you have to have a comprehensive strategy that’s going to incorporate relationships with schools outside of your traditional bubble,” Anthony Wilbon, dean of the business school at Howard University, a historically Black school, said in an interview.
The study of LinkedIn data, compiled by recruiting-assistance firm SHL, showed that more than 40 per cent of the graduates of U.S. universities who work for the profiled banks went to a private college, and 7.4 per cent attended an Ivy League school. Almost two-thirds of Goldman employees attended a private college, the highest percentage among U.S. banks in the study.
While Ivy League and other private school alumni still dominate at top banks including Barclays Plc, public schools had a much broader representation at the firms overall. Seven of the top 10 U.S. schools in the survey were large public schools, including Arizona State and Ohio State, while only two Ivy League institutions -- Columbia and Cornell -- made the ranking. New York University had the most graduates working at the 13 banks, with more than 5,000 of the 207,251 profiles surveyed.
Students from colleges that banks didn’t used to recruit from will need cultural preparation if they want to succeed in the industry, said Troy Prince, founder of Wall Street Bound Inc., which connects students from non-target schools in the New York City area with financial firms.
“No matter what technical skills you come prepared with, unless you’ve been exposed to that thing, you’re not ready,” he said. When Prince was starting out in the finance industry, he said he used his parents’ address, in Westchester, rather than his own, in the Bronx, in an attempt to fit in. “That social-capital piece is something that gets overlooked, but it’s probably the crux of this conversation.”