QUESTION: “HOW CAN WE IMPROVE DIVERSITY IN THE FINANCIAL SERVICES INDUSTRY”
May 2020
I asked a bunch of millennial and gen x young professionals to respond via the financial meme site @litquidity to the following serious question confronting the financial services industry today: How can we improve diversity? The following answers are from individuals that are not affiliated with Jefferies.
We received over 600 responses to this question and people took significant time and effort to give mature and helpful responses. @Litquidity and @skylarhandler picked the top 100 answers and I worked with them to pick the final 25 answers. I will be hosting a private zoom lunch discussion with the 25 winners to discuss this important topic and respond to any other questions/issues/thoughts they may have about our industry. Given the high level of interest, I believe our industry is in good hands as these young professionals become our future leaders and engage real issues that require thoughtful answers.
RICH HANDLER
CEO, Jefferies Financial Group
1.212.284.2555
[email protected]
@handlerrich Twitter | Instagram
he, him, his
TOP 25 RESPONSES:
1. Instagram: @alex_Facio
“Often times firms will prioritize students that come from certain “target” or Ivy League schools when a lot of students like me who come from state schools are just as intelligent, capable, and driven to succeed. Firms giving more weighing to experiences and aptitude as opposed to your school ranking could go a long way to enhance the diversity in financial services. I strongly believe GPA is not truly indicative of aptitude or potential.”
2. Instagram: @ginn.stagram
“Open up more routes than the traditional undergrad/MBA on-campus recruiting pipelines. I just finished serving as an officer in the Air Force for 7 years and completed a part-time MBA + a MSc degree during my time in the service…even passed level 1&2 of CFA and did a middle market IB internship. But most big banks would not even consider giving me a chance @IB because I couldn’t enter via traditional pipelines. They kept saying “you’re a great candidate, but we just don’t know how to bring you in.” B of A has a program set up where they take in a dozen vets each year straight out of the military and put them into FO roles in NYC. They have even found that most of the veterans stay @ the bank for longer than the normal MBA recruits (probably because we value being loyal/ finding a new mission to work for versus job-hopping). If IB recruiting was less standardized and more willing to let non-traditionals in (not just veterans), diversity would definitely increase.”
3. Instagram:@666jeffbenzos
“Educate people from communities underrepresented in the industry about what financial services are and provide meaningful mentorship programs. Especially if we’re talking about black/latin/native individuals, we have to make those people aware as early as elementary school what finance is and does, support education programs to that effect, and basically grow a base of talented finance professionals from the ground up. Those communities often see “finance” as a byword for economic exploitation by ~evil rich people ~ and the only way to change that is to help some of them get out of their very real toxic, oppressive circumstances, support them in becoming successful in finance professionals, and then join them in giving back to their communities so the cycle can continue.”
4. Instagram: @poweredbyidleness
“I come from a low-income background and my parents haven’t even finished secondary education. As such, I have not attended a ‘target school’ and do not have the connections to land interviews. My first proposal is to humanise diversity programmes. I have often been subjected to the “it must have been so hard, but you did so well” treatment by recruiters or interviewers, whenever I told them my story. I do not need their pity. I worked hard to get where I am and will continue to strive. I need recruiters to understand my thirst to succeed. Solution: Recruiters acting as human beings, with proper Emotional Intelligence rather than ‘CV checklists”
5. Instagram: @shergrams
“First one must identify where the problem is. Is the applicant pool diverse? If so, why is the selection so biased and how can we remove or reduce that bias? If the pool is not very diverse, how do we attract a diverse applicant pool? If it is a selection problem, how do we reduce bias? “Masked singer” or “The Voice” style interviews where you can’t actually see the applicant until they have been given an offer. That’s a possibility but an unrealistic application given the employer would want to see the body language, and how the person interacts during a conversation. Unfortunately, I don’t know how one could completely remove that bias absent that. Thus, what would encourage a reduction in bias? I think everyone would agree the corporate world in general needs more diversity. Those in key decision-making roles need more diversity. If banks stated they would no longer do deals with companies that didn’t have x% of diversity on their board that would encourage a reduction biased hiring by. In turn wall street firms in competing for business would go out of their way to ensure a diverse deal team so they would win deals. Money is the motivation on the street. If diversity is needed to acquire it, we will make it happen. I wish this wasn’t the case but I do believe it is. If diversity is needed to acquire it, we will make it happen. Now if the issue is the applicant pool the question is how to encourage more diverse candidates to apply. I think the above would work as people of varying backgrounds would want to work for a company who took such a stance. Also, reaching out to top students at more diverse universities and encouraging them to apply would be helpful. Less focus of target schools and more focus on top students across many schools. Then there is also the issue with all of those who are hired because they have connections. I have no facts to back it up, but I would be inclined to believe those who are hired because of their connections are often white kids from wealthy families. Each spot they take is one less spot for another candidate. But again, money is the motivation. In the end, I conclude that Wall Street as a whole needs to find a way to financially encourage diversity. As bad as it sounds and I hate to admit it, if diversity led to more profits I’d bet my bottom dollar you would see more diversity on the street.
6. Instagram: @lamadellray
Acknowledging that the problem exists in the first place is a super positive first step. Two steps: Recruitment side- eliminate unconscious bias (cv blind processes). Retention- show them that they’re valued for their skills giving them reason to stay.
7. Instagram: @karinecheese
“As a first generation American, first generation college student, as someone who came from a low-income background and disappointing public school system who is now a senior associate at XXXXXX, this is frankly something I think about daily. The problem is deeper than most people realize, and it’s not because folks have ill intentions, they just don’t understand what life is like for low income kids of color growing up in poor neighborhoods. The topic is complicated and it’s hard to get the point across. For starters, we work in a rough and highly competitive industry. At the end of the day, we want the best and the smartest of the pack, regardless of color, creed, age, gender, etc. But to achieve this, it means that we have to start with a basis of expectation of a measuring stick of potential ability to succeed on the job. So, we tend to choose students from target schools, we have come to expect certain experiences on their resumes, we look at GPA as a strong indicator of work ethic and ability to learn. In summary, to earn entry into finance, the most common path is to be a good college student at a target school, so let’s walk backwards from there. Going to college- I went to Georgetown and that was a big deal for me- no one in my hometown went to big, fancy, elite schools. I worked really hard to achieve this, but I also got lucky. My SAT scores were not as impressive as many of my peers at Georgetown, I never even visited any college campuses and did not know anything about going to college. I had a perfect high school GPA but it was at a really sh*tty school so that “perfect” was really far from perfect. So I got lucky; lucky that someone saw potential in me to give me a shot. A lot of people who come from places like I do don’t get so lucky. Getting the internship experiences – I remember that in the beginning of junior year, the big banks started coming to campus to recruit and everyone in my classes got summer analyst internships at the investment banks. I never even applied or interviewed because I was too scared. I thought I wasn’t as smart or capable as my classmates, despite having good grades and doing well in school. I thought my peers whose parents were in finance/ law/ RE or who had gone to prep school or public schools in more affluent towns were actually better than me. So I got an internship in commercial banking… still in finance, less competitive, “easier to handle” is what I thought. After that summer, I realized I wanted a higher paced, more challenging environment and was fortunate to find a redzone last second opportunity at XXX. investment bank and found my way in. Again, I got lucky. In hindsight this is all really funny to think about because most of my Georgetown peers who I thought were so much brighter, more capable, and tougher than me got burned out and left finance while I’m still here doing it. But the sad part is, I actually believed I wasn’t good enough and that’s because I didn’t know anyone who had “done it” or “who made it out” who could explain to me what it takes and who could offer me some words of encouragement This happens for a lot of people. Getting into college- most immigrant parents who have come to the US have not attended college. This means that growing up they may not even instill the idea of college into kid’s minds. Or sometimes they do have higher education hopes for their kids but are unable to help because they don’t understand the system and the requirements to succeed. There were so many bright kids in my hometown who were unable to participate in school life, extracurricular activities, schools’ events, etc. because they essentially had to play parent to their younger siblings after school while their parents worked. Those kids never had a shot of “getting out”. And in most cases, the parents don’t even know they are hurting their kids’ chances of succeeding. A lot of those parents assume that if their kids get decent grades and show up to school, they will be just fine…the reality is that I learned about investment banking because I was surrounded by people at Georgetown who talked about it daily but many people with my background are never exposed to it at all. There are so many things you need to know and so many barriers you have to overcome (or at least boxes you have to check) to get this job, that unfortunately it weeds out a whole lot of diversity. And the root of the problem is the constant struggle between our need for kids to meet high expectations very early on (recruiting now happens earlier and earlier each year!!) versus their lack of knowledge about what it takes (or even what we do, with our lifestyles are like, frankly how much money we make, among a billion other things) or sometimes inability to even attempt a shot at a spot. I’m also not saying that immigrant kids, or “poor” kids are the only ones who struggle, but I can speak to my experiences. We can’t lower our standards. That’s just not possible. So, for us to truly improve diversity in finance, it has to start early on, probably as early as high school so that these kids can become better prepared within an appropriate timeline and have time/opportunity to process all this. I don’t claim to know all the answers but the long-term approach would be the best solution in my humble opinion. Internally, as financial services employees, we can sponsor mentorship programs, programs to aid in preparing college applications encourage MAKING TIME TO SHOW UP at high school career fairs and speak to these kids, help fund SAT/SAT prep courses, etc. As citizens, we can be more active in our own communities and advocate for more information- demand more from school guidance counselors when it comes to student and parent communication about the opportunity to achieve higher education and what it would take to get there. Honestly, things are truly improving. We are doing better on the diversity front and we will get there someday. I’ve seen a change in 5 years of banking, and I expect the movement to continue for the next 50, but we can do a little bit more to help push it along.
8. Instagram: @fjavier.fc
“Remove names on resume submissions, focus exclusively on credentials and experience”
9. Instagram: @dwreck713
“Awareness needs to start early. Do informative presentations at low income high schools.”
10. Instagram: @annie_robinson
Need senior bankers to actively mentor/promote junior talent to keep mid-level diversity strong
11. Instagram: @christine_chung
“Partnerships with local HS/Charter schools for early internships/”shadowships”
12. Instagram: @simontornmalm
Problem: information disadvantage. Target disadvantaged high schools with information. Why: if you know what banking is in the first year of undergrad, it is much easier to break in. Students from strong socioeconomic backgrounds get info from fam.
13. Instagram: @benjaminkoljanin
By improving financial literacy at all and especially younger ages. Explaining career paths in FSI (demystifying it) at a younger age in education. Decentralizing the “strongest offices” out of high income areas (NYC, etc.)
14. Instagram: @mimilhmr
“1. Representing the FS careers to high schools where the industry is less known to inspire. 2. Demystifying the clichés about the industry by targeting women at colleges for example. 3. Changing the industry from the inside (HR policy) to integrate more relevant KPIs”.
15. Instagram: @davbreeze
“Less “diversity recruitment programs” and more genuine mentorship and networking. More publicly visible diverse faces of finance – and not just at “diversity” orgs/programs”.
16. Instagram: @mehfraj
“Recruit at non target/public colleges. Sponsor gender diversity mentoring at schools. Try blind recruiting. Hide names/schools/gender and see if it improves bias in hiring.”
17. Instagram: @nrsch__
“The industry’s recruiting practices really reinforce the advantages of people who are on “the track” and the industry needs to get comfortable with people who go home and lifeguard at a neighborhood swimming pool rather than get an internship every year. So it means that basically when someone is 18 years old, he or she needs to (a) know that they want to pursue banking, or at least some sort of corporate career and (b) be able to afford to not make money. And a lot of people, especially people whose parents didn’t work in that sort of career, don’t know that.
18. Instagram: @cooper_nj
“A number of companies award some sort of bonus for successfully referring a candidate into a role (sometimes scalable for seniority too). What if financial services companies motivated their vast workforces to get on board and work with them to recruit a diverse and talented rage of new employees. Simply, if you refer a candidate that is suitably diverse from yourself, and that candidate is successful and passes their probation period, you are eligible for a higher than normal referral bonus. Diversity parameters would not be constrained to certain minorities but rather applications from staff seeking a diversity eligible referral bonus would be subject to review by an appropriately constructed/diverse committee. In a post-crisis recovery period where compensation is likely to be affected, it’s not a bad way to offer employees motivation to do something to create a better version of their firm!”
19. Instagram: @armani_n1
“Diversity starts at the bottom and works its way up. Diversity programs have been a massive success to getting there. I myself need support to break into the industry. As LGBT & Hispanic I don’t have any connections with my mother being a teacher and my father being an electrician. The diversity programs help me land an internship with MS in BS this summer. You also need a strong mentor program to RETAIN interns/analysts. After receiving my internship, I turned inward to my school and crafted a diversity & inclusion night, with a strong student mentorship program attached. This year we have seen diverse Fordham students enter every bulge bracket because of this. A record for Fordham. It starts with an aggressive people line, then coordinated mentorship programs.”
20. Instagram: @blakekeating
“Exactly what Mr. Handler is doing — being present on social & offering not only advice/humor. But also showing compassion regularly. The word will spread, and people will stop seeing Finance people as “evil/greedy” & more as “nerds who just love excel”
21. Instagram: @adam_cornejo
“As a Latino-American I believe that exposure to finance is occurring TOO LATE. Diverse students are not learning from their parents. Firms need to supplement. Firms should hold info sesh/weekend curriculum for high school students.”
22. Instagram: @cindy.ameliee
“Female leaders coming to campus to discuss their career paths”
23. Instagram: @annebeau1115
“You first need to define diversity (i.e. ethnic, veterans, LGBTQ, women, etc.) You need diverse populations within the firm to target and recruit diverse talent.”
24. Instagram: @ahmad_hasanian
“Pairing underprivileged college freshman with current analysts (mentors) from same school.
25. Instagram: @seemalmalpani
“Retain diverse talent in senior positions to enable recruiting & retention of diverse juniors”