Why banks aren't actually hiring diverse candidates
Despite major ethnicity-related hiring targets, and significant institutional intent, investment banks are still facing an uphill struggle to hire diverse candidates in prestigious front office roles.
There are a few reasons for this.
Primarily - and despite the torrent of people who've been let go by banks in 2023, there are complaints that candidates have become much more risk-averse. At our recent roundtable, recruiters speaking anonymously said it's become much more difficult to attract applications from wary candidates, and that the reduced number of applicants means diversity is taking second place.
“It’s a case of locking in and getting those right individuals through the door first," he said. Only then can diversity be addressed.
Recruiters say the other problem is that their existing networks simply aren't diverse enough and tend to bring in similar types of person. “It's still very much a ‘who-you-know scenario’ from a front office perspective,” said one.
At the same time, banks themselves don't seem to be chasing diversity students as hard as you might expect. Even Xavier University of Louisiana, one of the better Historically Black Colleges and Universities (HBCUs) in the United States (and the only Catholic one, funnily enough), is struggling to place its students. Investment banks aren’t trying to recruit on Xavier’s campus as they do on prestigious Ivy League ones.
Dr. Cary A. Caro, a business professor at the university, tells us that Xavier has no particular holistic relationship with any investment bank, although he says the university is “seeking” such a relationship. None of Xavier's students had investment banking internships this year. Nor was “there been any opportunity to place students with these institutions,” says Caro. This is despite students' success outside of banking.
Part of the problem seems to be that Xavier students simply don't apply for banking job. There's, "a lack of knowledge about the industry,” Caro says.
Nonetheless, banks are trying. Morgan Stanley, for instance, hires a significantly higher number of Asian, Hispanic, and black students than are part of the student body. It also has a special HBCU scholars program, with three universities listed as partners on Morgan Stanley’s website (Howard, Spelman, and Morehouse). For reference, there are over 100 HBCUs in the United States.
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