Missing the Mark on Diversity, Firms Retool Internships
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Missing the Mark on Diversity, Firms Retool Internships
By Carmen Germaine November 12, 2018
The asset management industry has struggled to diversify its ranks, and some shops are reviewing their internship programs to get a wider range of talented candidates in the door.
Internships have long been the golden ticket to a career in finance. But attracting potential employees outside of a pool that is largely white and male requires conscious changes to the recruitment process, career development executives say.
Goldman Sachs and JPMorgan Chase, for example, each announced recently that they have stopped recruiting college sophomores for internship positions — more than a year before the positions would begin. The firms realized that the early deadline, which they said was intended to reach a diverse range of candidates, ultimately produced mostly white men with ties to the finance industry, The Wall Street Journal reported.
Industry wide, firms have a tough time finding qualified, diverse applicants for high-level positions, says Debra Somers, head of career development at Girls Who Invest. Seventy-four percent of both senior VP and C-suite leaders in the asset management and wholesale banking sectors are white men, according to 2017 data from McKinsey and Lean In. Analysis of federal data by Ignites last year yielded similar results.
“You kind of have to look to entry level if you want to see a number of resumes, because you can’t rely on looking at other firms,” Somers says. “If you want diversity … you really have to look to that college pipeline, because it’s kind of your only option.”
To get young people interested in the industry, some firms have partnered with organizations that recruit college students from low- to moderate-income backgrounds. But some start even earlier, with programs for high schoolers.
Sponsors for Educational Opportunity’s SEO Career program connects underrepresented college students with internships at firms including Goldman, Blackstone and Merrill Lynch.
The organization does “a tremendous amount of training and preparation” with students, but the early recruitment schedule effectively negates diversity, executive VP Julian Johnson says.
“If you’re going to ask this early, only the people who’ve been thinking about this since 11th grade are going to be prepared — and they’re not likely to be minority folks,” Johnson says.
Students from minority communities often aren’t as familiar with the nuances of the financial world as firms’ usual recruits, who tend to come from wealthy families, he says. SEO Career attempts to address that by recruiting from a broader range of colleges.
That training helps underrepresented students compete, Johnson says — 80% of SEO Career interns receive full-time offers from the organization’s partners.
Vanguard, which also partners with SEO Career, offers other internships, including a college-to-corporate program. The firm also has a job-rotation program that allows employees to “share their diverse perspectives and experiences across the organization,” spokeswoman Alyssa Thornton says in an e-mail.
At Girls Who Invest, participants get four weeks of training before six-week internships, Somers says. Eighty-five percent of the program’s first group of interns ultimately took full-time jobs in the industry, she says. The organization’s partners include BlackRock, Charles Schwab and Franklin Templeton. Pimco also became a “champion” level sponsor in March.
Russell Investments and State Street are among the many that work with with Year Up, a nonprofit that provides training and corporate internships to low- and moderate-income youth aged 18 to 24.
State Street joined the program “to wrap our arms around a demographic and group of people that have traditionally been ignored in prospective talent pipelines,” Chief Diversity Officer Paul Francisco told Ignites.
Year Up participants have interned in Russell Investments’ IT department since 2013, according to the nonprofit’s website.
Russell’s interns work in various business lines, so they can see different opportunities in the company, says Scottland Jacobson, director of global learning, development and talent acquisition.
“We want [interns] to come away feeling like they had a true employee experience and that they were utilized for their skills and knowledge, not just for temporary administrative work,” Jacobson says in an e-mail.
Successful internship programs require firms to invest in training and be open to hiring entry-level employees, Girls Who Invest’s Somers says. Many shops only recently began to consider hiring college graduates full-time, she notes.
“That’s why they have trouble with diversity,” Somers says. “If you’re only looking at experienced people, you’re only going to get more of what’s there now.”
- Rowe Price partners with a Baltimore high school specializing in science, technology, engineering and math to show how a technical background can lead to an investment career, former T. Rowe head of diversity and inclusion Angela Roseboro told Ignites.
Brokerage firm R. Seelaus & Co. began offering internships through a local all-girls’ high school after CEO Annie Seelaus realized that few women were applying for open positions at her firm, even at junior levels.
“Frankly, most of the college-age candidates that were applying for internships were men,” she says.
Student interns get exposure to careers in finance and can begin to picture themselves in the industry, Seelaus says.
Often, students can be passed over by internship programs at industry behemoths, she says.
“In financial services the internship world has gotten really competitive, particularly at the big firms, and I think small firms have been able to enter the picture and fill a void,” she says.