College students looking to become investment bankers are no longer seeing representatives from JPMorgan Chase at career fairs. And not from Goldman Sachs either.
JPMorgan's decision to replace in-person campus visits with video interviews, a move predating the coronavirus pandemic, allows the bank to talk to more candidates from a wider range of schools, and is similar to an earlier change at Goldman. The initiatives are intended to increase diversity by reaching beyond the handful of elite business schools and Ivy League universities long associated with the finance industry.
"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.
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% of middle managers at the country's top banks.
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.
The study, compiled by recruiting-assistance firm SHL, showed that more than 40% of the graduates of U.S. universities who work for the profiled banks went to a private college, and 7.4% 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, 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.
At JPMorgan, the recruiting change has, in its first year, allowed the bank to interview more candidates from more schools than ever before, said Robert Walke, global head of wholesale revenue campus recruiting.
"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.
Goldman representatives pointed to a Harvard Business Review article last year by Dane Holmes, then head of human capital management. 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% of campus applicants, he said. By 2018, that figure rose to almost 40%, 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.
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."