Wells Fargo has suspended a hiring policy that required managers to interview diverse candidates before offering someone a job, the banking giant confirmed to CBS MoneyWatch.
"Since The New York Times published a story last month about diverse job candidate slates at Wells Fargo, I've had the opportunity to hear from many of you," the bank's CEO, Charles Scharf, said in the memo to staff this week. "In these sessions, you've described in deeply personal terms the career obstacles you've faced because of who you are."
The pause comes three weeks after former employees told The New York Times that Wells Fargo often made them conduct "fake interviews" with a person of color even though there was no intention of actually hiring the person. One former employee in particular — Joe Bruno — said he was fired because he spoke out against the fake interviews, the Times reported.
Wells Fargo will make adjustments to the policy, retrain hiring managers then relaunch the policy next month, Scharf said in the memo. The company still plans to interview and hire candidates of color in the meantime, he said.
Wells Fargo, the nation's third-largest bank, adopted the policy two years ago in an effort to increase its workplace diversity. Under the policy, hiring managers must interview at least one woman and one person of color for job openings, particularly for positions where the salary would be $100,000 or more. Black people made up 13% of Wells Fargo's U.S.-based staff, and Hispanics 17%, according to 2020 company data.
Other companies, such as Adobe, Best Buy and Pinterest, have adopted similar mandatory interview measures to promote employee diversity. However, the technique has drawn criticism from experts who say it often amounts to a worthless quota that doesn't move the needle. Hiring managers simply check the box for diversity interviews, then hire the candidate they've always intended on bringing aboard, experts told CBS MoneyWatch.
"The quotas are created because workplaces don't know what else to do," said Kim Crowder, who owns a company that consults on diversity, equity and inclusion in hiring. "Companies are using these as window dressing to make things look like they're progressing."
In 2020, Scharf said Wells Fargo had trouble attracting diverse employees because of a "very limited pool of Black talent." He later.
No quick fixes
Since the murder of George Floyd in Minnesota two years ago, there has been increased social pressure on corporate America to hire more workers of color and provide them with equal pay, growth opportunities and more inclusive work environments.
But little progress has been made over the years in the financial sector, research from the federal government and think tanks has shown. Whites continue to dominate executive and C-suite level positions at most major banks and insurance companies, studies have shown.
Crowder said Wells Fargo's policy may have failed because it relied on job interviews alone as a fix for the larger problem of little diversity at the company.
"Correcting something in a month that's been happening for years doesn't make sense," Crowder told CBS MoneyWatch. Diversity hiring "is one area where companies always want the quick fixes."
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