I'm curious to get y'all's take on this because some of the quasi quota systems that I've seen seem like they will just make things worse for everyone.
Let's assume that the talent for investment banking is normally distributed across all ethnic/gender groups (e.g., let's say 10% of people, across all groups, are qualified for investment banking jobs). However, the applicant pool is clearly extremely skewed, with maybe 80% of applicants coming from overrepresented groups and the remainder from minorities. The problem with a 50% quota (which seems to be an informal target at most places I've worked) is that it ends up massively skewing the talent distribution.
Let's say there are 1,000 applicants for a 100 analyst seats. Using the distributions above, to have a class that is 50% URM, you would need to have an acceptance rate of 6.25% for the ORM applicant pool and 25% for the URM pool. If the distribution of talent is normal across both pools (i.e., the 10% above), 15 of the 25 URMs you hired don't make the cut absent the quota. Again -- both groups are equally qualified, this is just how math works.
Now, you've got 60% of your URM class that is likely to underperform expectations. There are two ways to deal with this -- either the URMs disproportionately get poor performance reviews (it's not really disproportionate but the headline numbers will look bad) or you're going to have to weaken performance reviews across the board. Both are obviously bad. The former, unfortunately, will likely lead to cries of systemic racism (60% of URMs are getting poor reviews, the firm must be racist), so the incentive is for firms to dramatically reduce negative feedback and rankings or reviews to dodge that bullet. What that means is that the quality of the analyst class as a whole will decline to avoid highlighting these disparities. Ironically, this feels like a case of systemic racism in itself as a disproportionate percentage of URMs are getting the poor reviews here.
Anyway, all of this is to say that affirmative action / diversity programs at the university recruiting level are misguided and ultimately hurt everyone, including the people they were meant to help. Banks should continue to have special recruiting events for women, Latino, black, etc. students to encourage them to apply and widen the candidate pool, but the actual interview standards cannot shift. This is beyond the scope of this post, but if you really want racial equity, it needs to start before birth -- people need access to reproductive education and contraception to prevent unwanted kids to be born, then schools need to be fixed so that kids are able to read and do math at a competent level, the social safety net needs to be strengthened so factors outside their control don't hurt kids development, etc. etc.
Thoughts?
This is obvious with every quota system but you can't say that without being shouted down
Is diversity recruiting actually that easy lol, my friend went through diversity at Evercore / PJT / Moelis and said they got grilled pretty hard lol and didn't get the offer
Yes, it is that easy. Basically if ur diversity and u apply ur auto admitted as long as ur not socially akward. Ur friend is probs just dumb/lazy. I got to a target and recruited last year for SA 2023 and had friends/classmates that did diversity recruiting who shared their questions/experiences w me. Then 3-4 weeks later, non-diversity interviews kicked off and I had my superday at Evercore and the difference in difficulty of questions was material. Although tbh they still weren't that hard even for the non-div interview questions as long as u grinded the BIWS guides.
Ok intern lol
Wow lol, how big was the disparity in questions? Like were they just asked behavs and u screwed w techs?
No, it is not easy. This is a huge overblown myth
Did u go thru diversity?
When I speak with bankers, I hear all the time that if anyone has more skills/knowledge coming into the job, the head start will be gone a month or two in. This means that as far as some of the skill sets required it matters less exactly who you hired as long as the are smart enough to pick up on what they need to learn.
The studies show that diverse teams produce better results, so maybe the benefits of diversity are greater than getting some slightly more skilled analysts? Just a thought, am definitely not an expert here.
That is only true if they have the same drive and intelligence. It is rare for someone to be unprepared for an interview so much that they need help, but then magically turn it on at the job. In fact, I’ve never seen it happen while I acknowledge it could theoretically
be the case.
show me th study that shows racially diverse teams are more successful. The bullshit studies you are referencing are for like incorporating a variety of skill sets, which is a completely different thing altogether. Diverse analysts that can’t do the work are always a drag and primarily used for HR and to include on pages when pitching clients that want to see a diverse “team.”
That's already a wrong assumption.
My team has no females or minority (non-white/Asian/Indian) or LGBTQ analysts. Half the analysts still suck. Must’ve been the diversity recruiting.
Probs legacy/nepotism recruits then.
No asians or Indians either? That probs explains y ur team sucks.
Have Asians and Indians. But not counting them as diverse to align. Also no nepotism hires.
It’s sad and unfortunate but you can’t expect to fix 18+ years of disadvantage with affirmative action programs. It isn’t fair for either party and if anything makes the problem worse by distracting from the root cause (failing public services, lack of educational standards, etc.). I definitely understand that there’s some benefit from increased representation hopefully widening the applicant funnel though but a ham fisted approach hurts everyone.
Said this before on another thread. Note I assist in diversity hiring at my firm.
Diversity hiring, in particular the focus on women is extremely detrimental to quality standards.
Even at BBs, juniors hiring is not longer a meritocracy. Its a sad fact.
I've seen analysts who should never have been promoted to associate be promoted simply because they are diversity quota members. These people then instruct analysts.
It then causes a generation problem as you have unqualified people teaching our newest colleagues.
Meanwhile when it's highlighted the sensible conversations are then shut down.
Sad situation but that's the honest truth from two places ive worked.
Had a female friend receive a call from a VP at a BB and present her with all the technical questions that would be covered in the upcoming interview. After listing them all, the VP said, "Do you understand all of the questions, or do you need help answering any of them?"
Recruiting has become a joke. During an SA interview, I walked an Analyst through different Debt / EBITDA turns on an LBO (Senior, Sub, Revolver) and explained why each tranche had x number of turns and he responded, "Wow, I definitely didnt know that at your age", only to get passed up by someone from my school with less technical knowledge (doesnt need to be said but they met the diversity quota). Sure it could have been fit, but "may the best and most knowledgeable candidate win" straight up doesnt exist anymore.
My advice? Pursue a different industry. The only areas in finance that actually pay well either A. Require you to sacrifice 100% of your life for a stupid job (IB / PE) or B. Will be like FP&A or something where you make $150+ per hour worked but only actually work like 15 hours a week, so therefore you arent making very much money.
People get so upset when you say pursue tech on this site so I wont say that, but pursue something else.
Wow lol didn’t know this
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Really could have been fit tbh m8
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