JPMorgan building in New York.
Scott Mlyn | CNBC
JPMorgan Chase has increased the number of black and female college students selected for internships with investment banks by leveraging technology platforms to help the company expand its on-campus recruiting efforts, CNBC learned.
The company said 18% of its summer interns in North America for corporations and investment banks this year are black. That’s a 64% increase from 2020 when the level was 11%, according to New York-based JPMorgan. The bank also said female interns account for 55% of the 2021 class globally, up from 50% last year.
The move at JPMorgan could ultimately result in a change in the makeup of Wall Street, which has been primarily a bastion for white men for decades, especially in leadership positions. Banks like JPMorgan, which hire around 1,000 summer interns worldwide, use the programs to test and train students to become entry level bankers after graduation.
One reason the bank is making progress has been to use two software programs to help recruiters search more candidates than before, according to Rob Walke, global director of campus recruiting for corporations and investment banks.
“We really opened up the way we hire,” Walke said in a Zoom interview on Thursday. The internship selection process “should be based on your skills, previous experience and ability to articulate your competencies for the role, rather than us assuming them based on the school you are studying at.”
The bank used to focus mostly on 17 or 18 of the most prestigious universities, including Princeton and the University of Pennsylvania. While students in these schools are still in high demand, the process often resulted in candidates with backgrounds similar to those of staff who had previously graduated from schools.
Several years ago, JPMorgan began piloting the use of computer games called Pymetrics, which aim to objectively measure candidates’ “cognitive, social, and behavioral attributes”. In hopes of reducing bias in the interview process, the bank also began using a video program called HireVue to automate the first round of candidate interviews.
By expanding the number of schools it recruits and building relationships with historically black colleges and universities, the bank has been able to select more minorities: 29% of interns in sales and research roles, 24% in global market positions, are black students and 13% of interns in investment banking, JPMorgan said.
The company has made similar advances in its wealth and asset management department, which will employ 17% black student interns this year, up from 7% in 2020.
According to Walke, most summer interns are typically offered full-time first-year analyst positions when they graduate. The program begins in June and unlike last year when the coronavirus pandemic forced interns to work remotely, most investment banking internships will be in person at JPMorgan offices.
If the bank is able to keep its black talent through the first steps of the Wall Street hierarchy – analysts become associates and some are eventually promoted to vice president – the move should ultimately lead to more minorities at higher levels in the organization .
Other banks, including Goldman Sachs and Citigroup, have made similar diversity commitments. In 2019, Goldman set “ambitious goals” that half of all new analysts and entrants in the US would be women, 11% black and 14% Latinos. Then, last year, Goldman said it would double the hiring of junior black college bankers by 2025.
Still mostly white
In large organizations, however, the challenge is often one of empowering minorities and women so that some ultimately become leaders, admitted Brian Lamb, director of Diversity & Inclusion at JPMorgan.
To move this forward, the bank has formed groups of senior executives to engage with new hires to create an internal sense of community, and made diversity and inclusion goals a part of executive performance and salary reviews, Lamb said.
However, as with other banks, most of JPMorgan’s executives are white. In the US, according to an annual disclosure, 83% of the bank’s operations committee are white while 79% of the executive team are white. In the three years since 2018, the number of black employees in middle and senior management positions has largely remained unchanged, along with a total workforce of 13% for black employees.
Progress has been made at the first tier of the banking hierarchy, the on-campus recruiting level: JPMorgan said 58% of the 2020 class were minorities, including blacks, Asians and Hispanics. that number should increase this year.
“What matters is the trajectory,” said Lamb. “Are we seeing gains like on campus recruiting data? Are we seeing improvements in women’s representation and ethnic representation over last year? We are encouraged by the progress, but there is still much to be done.”
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