Senior Client Partner, ESG and DE&I Strategist
Goldman Sachs' New Diversity Play
Both Goldman Sachs and the National Football League pride themselves as being difficult organizations to join. Goldman is said to hire only 4% of the people who apply, and of the nearly 15,000 football head coaches in the United States, only 32 coach in the prestigious NFL.
But each has found that the exclusivity may be keeping out the type of diverse talent both organizations may need to stay successful. Several years ago, the NFL imposed a rule ago mandating that teams must interview at least one minority candidate for open coaching positions. Now Goldman is instituting a similar rule, requiring its managers to interview at least two diverse candidates for any open job.
That type of rule is a good start, but organizations need to go further to become truly diverse and inclusive, says Andrés Tapia, senior client partner and global diversity & inclusion strategist with Korn Ferry. “It’s a necessary, but not magical step,” says Tapia. “It increases the chances of finding diverse talent by forcing the issue.”
Wall Street, like other industries, is grappling with creating more diverse and inclusive cultures. At Goldman, for instance, only 17% of the partners are women; blacks and Hispanics each make up 2% of partners.
Goldman had pledged earlier to make up half its new analyst hires by 2021. By now adopting a version of the NFL’s “Rooney Rule” (named for the late owner of the Pittsburgh Steelers who conceived of it) hopes to bring in more non-white men into the organization and eventually move through to leadership roles.
Experts say this type of rule can get a more diverse candidate group in the door. The exposure to the process and ability to home interview skills helps better position candidates to capitalize in the future, says Andrew Montag, senior associate in Korn Ferry’s Global Sports practice who has observed the “Rooney Rule” in the NFL. “All you need is one opportunity to impress someone,” Montag says.
Goldman Sachs also could have an influencer effect on other investment banks given its historical standing as a Wall Street leader, says Michelle Pollack, senior client partner in the Global Financial Services practice at Korn Ferry. “Hopefully, this will generate positive momentum at other firms when they are thinking about diversity of their people because it needs to continue to be a priority,” Pollack says.
To be sure, experts caution that Goldman or any organization adopting this type of interview mandate doesn’t inadvertently undermine attempts to be inclusive. Requiring an interview of minority candidates doesn’t necessarily mean that those people are considered serious candidates for the job. Though the “Rooney Rule” has been in effect since 2003, the number of minority coaches in the NFL has never been lower, for instance (only 3 coaches are black and one is Hispanic). “The question with something like this is always going to be if you are really committed or just following protocol,” Montag says.
Plus, once diverse candidates get in the job there’s more work to be done, Tapia says. Banks, or any other firm seeking to be more diverse and inclusive, he says, need to address potential unconscious bias, cultural support, and other causes that can keep non-white men and women from advancing into leadership positions.