Why are banks hiring less qualified candidates?

Does anyone know why all of these firms are offering SA programs where the interview questions are always easier? From peers who went though the process I know the questions they ask diversity candidates at bofa & gs, and I’ve done regular SA superdays at both. The diversity candidates are being held to a much lower standard and I was curious as to why? Wouldn’t that hurt the bank in the long run? Why aren’t these global leaders hiring the most skilled individuals?

 
Controversial

Because years of divisive foreign propaganda that bombards the country 24/7 have made identity politics the primary concern in nearly every aspect of American life.  I wonder who possibly benefits from a continual lowering of American standards in academia, medicine, business, etc.?  Hope y'all are taking mandarin lessons. 

 

It doesn’t shock me that white men equate hiring of anyone else who doesn’t look like them to “lowering standards”

It’s amazing that the most privileged group of people in the history of the universe can’t fathom that others can be just as competent as they are.

So the media creates a narrative that minorities specifically black and brown people are not smart so they diminish the hard work of those those have struggled to break generational barriers to get to where they are.

Systemic racism is a bastard

 

Then why are universities shitting themselves and looking for admission loopholes when the Supreme Court overturns Affirmative Action? 

Asians, Indians, and Whites on average have higher scores than other groups. Just cause these groups perform well/ had better opportunities years ago, does not mean you should fuck the kids today.

You do realize not every white male has a family friend in high finance. Diversity programs aren't killing nepotism, just the other white kids who struggle as much as them to find an opportunity.

 

At my old firm (EB), the question list was the exact same for diversity and non-diversity candidates. We valued diversity a lot, but it was viewed as a way to make it easier to get in front of an interviewer, not get easier questions.

 

I haven't worked for them. And yes, I think every bank, employer and even firms outside of finance are handling this differently.

But there is another interesting aspect - when interviewing on a panel or 360 screen - the HR team will not tell me whether the candidate is a diversity candidate or not! You can only assume, you never know. Diversity can be in any group and it's not always visible.

 

tbh I haven’t seen any over representation on trading floors but maybe that’s just given the nature of the job compared to how most can “learn” IB. Regardless, life isn’t fair. I know of one or two diversity kids that were completely inept but maybe it just stuck out to me more because they were minorities. I can think of one frat at my undergrad that just funneled their boys to a certain bank consistently leading me to believe they had some knowledge of question bank prior . I would tell you it eventually balances out but I don’t believe that, you just learn to live with it and get better.

 

I think the talent pool is just generally worse now that banking has become a non-desirable industry for graduates. I think the mindset for top talent is that banking is a lot of hours for compensation they could get in the tech industry for way less hours and way more flexibility. I think culture is also becoming more of a factor for young people especially and wall street type banks definitely don’t have the culture or perks that this generation is looking for.

 

So do you think that top tier talent isn’t even needed for banking? At the most isn’t it just basic algebra and an understanding of simple financial concepts? I guess it’s different at the more senior levels but you definitely don’t need to be a stud to work as an analyst in IB right

 

Anything is hard if you're asked to do enough of it in a short timeline. From an intellectual rigor perspective, no you don't need to be that smart to do IB, but you are going to either have to have great mental stamina or be smart enough to figure out how to do things effectively. I'd say GPA is a better predictor of IB readiness than SAT scores. If you're not naturally smart but you are persistent and a workhorse you'll do fine. You do have to have either one or the other though, can't be a total dud and hold up forever in this type of environment. 

 

The civil rights act and the equal opportunity employment commission demand it. If only the best were hired, you wouldn't see diverse candidates, and that's illegal according to the USG, because it must mean your company is racist. 

 

The questions are typically the same but the slack given to people for their answers is very different. And it’s not just technicals, the delta in GPA is also significant. 

I’m still not entirely sure how it’s legal, the practices at every bank are very blatantly discriminatory with the degree of discrimination being the only differentiator. 
 

I used to agree that “I lost the job to a less qualified diversity candidate” isn’t the way to look at it but… no, you literally might have. I see it happen every recruiting season at both the analyst and associate level. Non-diversity male candidates who would have been high in the stack in 2006 or whatever get no offered because they’re trying to meet a diversity target set by HR. 

Those diversity candidates then turn you down because they have 5 other offers given how high the industry is bidding up mediocrity for social goals, and you’re left trying to fill spots from an already thin diversity talent pool. 
 

Result is that everyone VP and below gets cranked because there aren’t enough reliable people around and the handful of trustworthy people get grabbed for everything important until they burn out and ragequit.

The entire system is transparently insane 

 

the handful of trustworthy people get grabbed for everything important until they burn out and ragequit.

Can confirm I am soon to rage quit for this exact reason. We all put too much into this job to work alongside people that don't do shit. 

 
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JPMorgan does this and the one kid from my school that I know who got a job through the diversity program was literally a 1/4th latino dude from New Canaan whose dad was a Partner of a ~$10B credit fund.   

All that said, if you're actually a good candidate who the banks WANT to have on board, they'll find a way to get you in there. If you're kinda just one of a few people on the cusp though, who doesn't make a strong impression either way, you ought to focus more on improvement than on other people's interview questions. 

 

What a joke. I bet these diversity candidates wouldn't even need the $10k as an incentive to accept.

Most I see are from already good backgrounds i.e. "diverse" candidates who went to the Philips Exeter Academy and play water polo.

 

Holy shit what, how is this not illegal?

20 years ago my buddy and his wife (then bf and gf) both got jobs as engineers for a major defense contractor. She made like 20% more for the exact same role in the same group. They both still work there. 
 

This is a supply and demand question. There are fewer diversity and female candidates, therefore the truly good ones should deserve more. 
 

 
Most Helpful

Diversity is of course a good thing, where the candidates are qualified. It is of course right for diverse candidates to be given chances for interview. This should not be a controversial; there is nothing wrong with having a diverse workforce. In Europe, this is very much how it works, diverse candidates tend to get more chances for interviews but the expectations and interview questions are the same; we do not hire incompetent candidates.

The problem seems to be that in America, "diversity" is treated as a tick-box rather than genuinely seeking out the best talent. Look, I understand that if certain people don't have the pedigreed financial knowledge of some target students because of whatever socioeconomic factors; this is an 'apprentice' job, you can learn everything you need on the job and you can be trained to be successful, you don't really need to know much going in. But where the issues arise is recruiting people who have little understanding of the industry or what they are applying for, or that they have little interest in staying.

In short, diversity is desirable for a firm. Opportunities for advancement should not be gatekept, and it makes good business. It makes sense to have Spanish speakers for LATAM deals, it makes sense to have Arabic speakers for ME deals etc etc. Finance should not be an "old boys's club" where you are successful because your parents goes to the same boating club as the MD. It is good that diverse backgrounds are getting looks and interviews. What is bad about the (American) diversity recruitment process is it focusses FAR MORE on "traits" rather than actual merit. Being diverse and being very bright and competent are of course not mutually exclusive, and candidates should be held to the same standard as each other. Here, the US could take a page out of the EMEA playbook by:

  • Eliminate networking as a prerequisite for interviews, I think JPM has already done this.
  • Introduce psychometrics, that way the candidates who come to you, diverse or otherwise, will have a baseline level of competency 
    • This one is 50/50, because sometimes psychometrics will screen out very bright candidates
  • Contextualised merit based interviews: someone who has a string of prestigious, but unpaid, internships under his belt should of course be able to progress, but a whole cohort of them over the candidate who self-studied, only has 1 or 2 of these (or none) should not be passed over because they were not able to afford to not work

Lots to do, ladies and gents. But diversity? That is not the problem, that is desirable and makes us stronger. The issue is treating diversity as a trait-based tick-box. Don't do that.

 

Sorry, but Pymetrics (ML based Myers-Briggs BS test) is dogshit (process is too random). This is from someone who had an AC at JPM so it's not me being insecure.

Also, know plenty in EMEA where female candidates get a lot more leeway and opportunities. The funny thing is, most of them are from the "old boys's club" environment i.e. Mykonos every year, Int. Geneva School or St Pauls.

I think it's worse in EMEA. You cannot network which is something people who may be passionate can try to use to their advantage. So if you are non-diverse, from a shit/average school (say because of your socioeconomic background which banks apparently care about), AND want to work in BB/EB (Laz, Roths, EVR & PJT) then my condolences.

Recently a VP from a mid-tier BB in London complained to me about how HR practically handles most of the processes so they get very little say. Therefore the average intern quality is down but they still have to take candidates and give return offers otherwise they won't have any analysts.

A close friend of mine's GF is a black female - once she put "incoming intern" for her SA and many recruiters were reaching out to her. Meanwhile, my friend was a black dude, with the same level of internship prestige and received no attention from recruiters.

This is not to be racist but to facilitate the female weighting issue in London. Obviously, it's a personal anecdote but I have heard/seen enough to make a guess.

 

What I meant by finance should not be an "old boys's club" is that you should not get a position because you are buddy-buddy with the MD because of some obscure connection. That is inherently unfair. I don't care if you have money, or went to a prestigious school, because the effective networking ban means that the only thing that matters is you going to a good school, with good grades. 

Yes, the process is luck-based. That's just how it is. It's the same thing in America, despite the heavy focus on networking. There isn't a place for everyone, sorry. It is common knowledge that banks have target schools, so if you get BCC in your A Levels and end up at Portsmouth and can't get into a BB and get upset you can supplement this by networking, then that's really on you and not the bank. Talk about "hiring less qualified candidates", THAT is actually hiring less qualified candidates, not diversity being "less qualified".

Psychometric tests can unfairly filter out some really stellar talent who just don't do well in them. On the other hand, they will ensure that the group of people screened are very bright people. It's a trade-off. JPM does not use them in EMEA.

HR handling the application process is not a bad thing. It actually ensures that the interview pool draws on talent from all over. The quality of candidates does not suffer because of this, and it's very surprising you even say this, because so many SA classes are full of European Masters students with multiple internships under their belts already.

Yes, women have it easier in recruiting. Banks try to maintain a 50% female quota. But there are so many women applying anyway for these positions that the quality of prospects is not low. You edited your comment, you said the girlfriend went to private school and so "she would've been fine anyway". That's not really how it works.

So, no, I don't think you've "seen enough to make a guess". I think most of your points are misguided. Especially your dislike of networking not being a factor... 

 

Agreed, diversity in offices is good. Hiring processes should emphasize diversity and also still seek to find strong candidates rather than overemphasizing traits.

 

I just think income should play a larger role than just getting into Oxbridge with A*A*A*s. While it makes sense to judge people on pure merit, how they got there was not by pure merit i.e. socioeconomic status.

Not everyone is a genius and can afford tutors, similarly, it's not a rocket scientist job (you can argue about social skills, but that's never the focus in Uni applications).

 

I'm a mix of several races, but I am undoubtedly half-white. The disparity between my applications where I listed my race as white vs mixed (White/Asain/Pacific Islander) is disgusting.

Its a shame to see American society become such a joke. 

 

It seems to me the stereotypical reason that white people view diversity is that the diversity candidates are less smart, which is 100% opposite of the truth. White males always think they are the smartest people in the room and we all know that’s not true.  We don’t need to ruin the white man’s fragile ego by letting him think that somebody else could be as smart as him. You have the stereotype that black and brown people are less smart than white or Asians, and reading the bigoted statements within the comments just goes to prove what you think about black and brown people. Most of you will read this and say I didn’t mean anything, you’re reading it wrong, but put the shoe on the other foot and listen to how you guys are being very condescending towards people that don’t look like you. Investment banking is dominated by white males, and for some reason you think if the population of the company is less than 99.9% white you feel threatened and you make stupid comments on social media. This is got to stop you guys don’t even hear what the hell you’re saying. The worst part is you all are talking to each other trying to justify your statements. I have many friends that work in investment banking and everything I’m saying is exactly the truth because they’re living it on a daily basis watching you guys bring in less qualified white people, but pretend that the rocket scientist. I see the resumes all the time and most of them are jokes but 99.9% of the ones that are hired are white. The other interesting comment was that the questions have to be dumb down, when you were interviewing, the questions were harder. They weren’t harder. You just didn’t have the experience or the knowledge to answer the questions back then, but now you’ve worked so many years in banking you think you’re a rocket scientist.  

 

It’s amazing that the most privileged group of people in the history of the universe can’t fathom that others can be just as competent as they are.

So the media creates a narrative that minorities specifically black and brown people are not smart so they diminish the hard work of those those have struggled to break generational barriers to get to where they are.

Systemic racism is a bastard

 
Chuck E-Cheese

It's amazing that the most privileged group of people in the history of the universe can't fathom that others can be just as competent as they are.

So the media creates a narrative that minorities specifically black and brown people are not smart so they diminish the hard work of those those have struggled to break generational barriers to get to where they are.

Systemic racism is a bastard

Thank you ❤️

 

FYI- diversity candidates, by default, come from a pool of people with lesser GPAs and SAT scores on average. If they are equally as smart, there would be no need for diversity hiring in the first place because they would be chosen by default.

It's as simple as that.

 

Diversity of income is a lot more important than diversity of skin color or gender. Most of the diversity candidates I've met are more connected to high finance, well off, and offer less diverse thought than me as a middle class white man.

 

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