Just how diverse is the finance industry? One Black college student's quest for employment offers glimpse - USA TODAY

---

As a young Black man forging a career in finance, Kenny Haywood is starting in an industry criticized for its policies and a corporate structure that has few Black employees in positions of power.

It was good news. 

Kenny Haywood, a senior at the University of California, Los Angeles trying to land his first full-time job in finance, was referred by a friend to an insurance company interested in recruiting from his university. After a phone call and a quick exchange of emails, Haywood lined up an interview.

"Obviously, I still have to sell myself,'' Haywood, 21, says. But after months of sending out emails to potential employers and hearing little back, the insurance company's swift response gave Haywood a much-needed burst of encouragement. "This is a cool 'Hang in there,'" Haywood recalls thinking.

Haywood, who's been interested in business since middle school, has held down a part-time job while carrying a full load of economics courses. He's been selected for a scholars program and had an internship at a financial firm last summer.

But as a young Black man forging a career in finance, Haywood is setting out to succeed in an industry criticized for policies that have harmed, exploited and excluded communities of color, and a corporate structure that has few Black employees in the positions that pay the best and wield the most power. 

DECADES UNTIL PARITY: Corporate boards grow more diverse, but slowly

'THERE'S ZERO':Restaurant industry grapples with lack of diverse executives

Last year, USA TODAY reviewed and received EEO-1 reports from 17 financial service firms that are among the S&P 100. The forms detail the gender, race and ethnicity of workers in 10 categories ranging from "laborers" to "executives" for companies with more than 100 employees and some other government contractors. 

Among those firms, which included Bank of America, JPMorgan Chase, American Express and Wells Fargo, Black employees were most represented in typically lower-paying administrative support positions where they comprised 21.4% of the workforce compared with 17% of mid-level managers, and 3.8% of executives.

And a September 2020 report from McKinsey & Co. and the W.K. Kellogg Foundation found that while 10% of entry-level workers in financial services were Black, their representation dropped the higher you moved in those organizations. For example, 4% of senior managers or directors, 2% of senior vice presidents and 3% of C-Suite executives were Black.

In the wake of the national protests that followed the killing of George Floyd and other Black Americans in 2020, many financial companies pledged to give communities of color more access to capital and increase their recruitment and promotion of Black employees.

Firms like Goldman Sachs, Morgan Stanley and Wells Fargo have set recruitment goals, established initiatives to better retain and promote Black executives, and tied senior leaders' compensation to progress in making their teams more inclusive.

But narrowing the representation gap will require long-term commitment, experts say.

"I do believe the right intentions were there when the statements were made,'' says Ashleigh Shelby Rosette, a professor and senior associate dean at Duke University's Fuqua School of Business whose research focuses on the intersection of leadership, gender and race. She cautioned that "it can be difficult to sustain that intention over a long period of time as these areas tend to fade from the spotlight.''

How diverse is the finance industry?     

As Haywood has charted a path to a financial services career, he's received encouragement and advice from professional mentors, relatives and family acquaintances.  

His network is as multicultural as the circle of friends he's grown up with in Los Angeles. But he notes that Black professionals have been some of his most enthusiastic supporters. 

"Black people have said, 'I see me in you,'" he says. "'I want you to be successful,' and it's an instant investment.''

MORE WOMEN JOINING BOARDS: This California law got companies to add record numbers of women to their corporate boards

WAR ON CRITICAL RACE THEORY: 'Corporate-sanctioned racism'? How war on critical race theory spread from schools to big business

The experiences of other Black professionals can be particularly instructive because the higher up the corporate ladder they climb, the more likely they are to be the only or one of the few Black people in the room, according to workplace and business researchers. That can lead to feelings of isolation, and Black professionals say they often feel underestimated or overly scrutinized in the workplace as well.

Roughly 40% of Black employees in financial services felt their race made it more difficult to get a raise or to move into a higher position, the McKinsey study found. And among Black men working in the industry, 49% felt they had to provide additional proof of their capabilities – double the amount of any other racial or ethnic group. 

Race And Banking Talent

Kenny Haywood, a senior at UCLA majoring in economics, hopes to get a job in finance before graduating in the spring.

Robert Hanashiro, USA TODAY

Feeling pressured to constantly demonstrate their competence is just one of the many microaggressions, or "small acts of racism that whether intentional or not signal disrespect and lack of belonging,'' McKinsey writes.

Haywood, a son and grandson of professionals, says he's always felt comfortable being authentically himself, whatever the environment. And that won't end when he's working full time in a corporate office.   

"I've always considered myself to have a very diverse group of friends both racially but also personalitywise,'' he says. "I can say different groups bring out different aspects of my personality. But I've always been as genuine as I can be. I'm not going to hide who I really am in professional settings."

But as Haywood transitions into the world of work, he believes there may be times he's more closely looked at by potential clients or employers because he's a young Black man.

"A lot of the spaces I've been doing a lot of my networking through have been ... very culturally diverse and accepting," he says, but "there have been times I'd look around the room and think 'Oh wait, I really am the only Black person here.'" 

In moments like those, "I'm even more cognizant as to how I present myself,'' he says. 

Haywood says he became more aware of the need to follow certain cues as his professional search ramped up in the last year. He remembers a particular day last summer.  

Haywood had been selected for the Small Business Investing Scholars Program, which connects women and minorities to financial companies that are partnered with the Small Business Administration and who are looking for interns.

IS CRYPTO A WAY TO WEALTH AND EQUITY?: Black, Latino, LGBTQ investors see crypto investments like bitcoin as 'a new path' to wealth and equity

A BLACK OWNED BANK COULD HELP BRIDGE WEALTH GAP: More than a credit score: How a Black-owned bank could widen support for small businesses

Heading to one of the lunches where he and his fellow interns gathered to hear guest speakers from the financial industry, Haywood put on a button-up polo shirt. But when he arrived, he noticed some of his peers were wearing jackets and ties.

"So I catch myself,'' he says of that moment. There wasn't a racial divide. Several of the students in the more formal clothing were people of color. But it was a reminder, Haywood says, that "I can't get too comfortable. Certain things I may think are professional are actually not professional compared to certain standards.''

Haywood's grandfather, who's had decades of experience in the business world, has also given him plenty of advice.

You have to be good at explaining how you prepared for your future goals, his grandfather told him. Don't talk about politics or other controversial topics in the office. And Haywood says his grandfather emphasized that you have to look the part. 

"He'd always tell me about presentation,'' he says. "When you get the job, there's a little room to be your individual self. But for this process, you want to be mainstream. You don't want to give anybody a reason not to choose you.''

So before every interview, Haywood made sure he shaved. He took out the diamond stud he began wearing after getting his ears pierced the summer before his freshman year. And he was careful to not let the slightest bit of slang slip into conversations he had in a professional setting.

"I can't deviate too far from what the norm has been. I'm competing with a whole range of people so I have to always aim for the highest bar.''  

The business case for diversity

Companies with a leadership team or board of directors that is racially and ethnically diverse tend to also have a stronger bottom line.

For every 10% more racially or ethnically diverse a business's leadership is, earnings before interest and taxes inch almost 1% higher, according to the McKinsey and Kellogg report. 

There are other compelling reasons for the corporate sector to be more inclusive. The nation's workforce is also growing more ethnically diverse, with the typical age of a person of color being 27 compared with 58 for white Americans, according to a 2019 Pew Research Center review of U.S. Census data.

And equity is important to many young consumers, who emphasize they want to deal with businesses that reflect their principles, the McKinsey surveys say.

But beyond profits, the financial services sector and other industries have come under increased pressure to end practices and implement policies that help rectify the systemic racism highlighted by the killings of George Floyd, Breonna Taylor, Ahmaud Arbery and other Black Americans, spurring national protests in 2020.  

USA TODAYS' review of EEO-1 reports from 17 financial companies found that non-Hispanic Black people represented 12.9% of their workforce, a smaller share than the broader financial service industry. Meanwhile, non-Hispanic white people comprised 57.1% of those firms' workforce, a much greater share than the broader sector. 

Charles Scharf, CEO of Wells Fargo, sparked controversy in 2020 when he told employees in a memo that "there is a very limited pool of Black talent to recruit from'' for executive roles. He later apologized, saying in a statement that his comments were the result of "my own unconscious bias."

WILL RUSSIA SANCTIONS BE FELT IN THE U.S.?: Could sanctions against Russia boomerang back on Americans?

BRINGING IN THE UNBANKED: For 'unbanked' Americans, pandemic stimulus checks arrived slowly and with higher fees. But that could change.

Wells Fargo's 2020 data showed that from sales positions to executive positions, Black workers were underrepresented while their white peers were overrepresented in comparison to their share of the overall workforce.   

While 15% of Wells Fargo employees were Black, and 62.1% were white, 5.5% of Wells Fargo's executives were Black and 83.4% were white, according to the data. Black executives were underrepresented by half and white workers were overrepresented by 31% according to USA TODAY's calculations.

Among mid-level managers, 10.4% were Black and 70.3% were white, meaning white workers were overrepresented in such jobs by about the same amount that Black employees were underrepresented. 

The balance only changed among the typically lower-paid administrative support staff, where Black employees filled 22.6% of the roles, while white employees were in 52.4% of those positions. That meant Black employees were doubly represented in such jobs – particularly Black women – while white workers, particularly white men, were underrepresented.

What is racial equity?

In 2021, Wells Fargo began tying the pay of its senior leaders partly to how well they increase the racial and ethnic diversity among executives who report to them. At least half of those interviewed for most jobs at Wells Fargo that pay more than $100,000 annually must now be diverse, and interviewers must be inclusive as well, the firm says.

Operating committee members are sponsoring 44 executives who are predominantly ethnically, racially, and gender diverse, meeting with them monthly to discuss how they can help them prepare to move into bigger roles.

And nearly 300 more executives, who may also include military veterans and different sexual orientations, have participated in a similar program dubbed BOLD. 

"We still have a long way to go but some of the progress we've made in the last 12 to 15 months has been encouraging,'' says Kleber Santos, who became head of diverse segments, representation, and inclusion for Wells Fargo in Nov. 2020 and sits on the bank's operating committee. 

LATINO ENTREPRENEURS STRUGGLE TO GET LOANS: 'Almost impossible': Latinos open businesses faster than any other group but face hurdles

JP MORGAN COMMITS TO MORE INVESTMENT: JP Morgan Chase to invest millions in jobs training and education

Additionally, through the firm's University Programs Recruiting team, Wells Fargo executives seek candidates from historically Black colleges and universities and Hispanic-serving institutions. In 2021, the number of employees hired from those schools was nearly double the previous year. The bank says it is unable to provide more detailed numbers.

Another large firm, Morgan Stanley, says that in 2020 6% of its U.S. staff was Black, while Black employees represented 3% of the firm's officers.

But in January, the firm announced that the 199 employees promoted to managing director represented the most ethnically diverse class ever. Of those promoted in the U.S., 10% were Black, 6% were Hispanic, and 20% were Asian. 

Morgan Stanley has set goals to increase the number of Black and Hispanic employees who are managing directors, executive directors and vice presidents in the U.S. by 50%, and to increase the number of women who fill such roles globally by 25%.

And in 2020, when the company said it recruited the most diverse group of employees from colleges ever, 21% of those hired in the U.S. for full-time positions were Black and Hispanic.

Goldman Sachs also has numerous initiatives underway.  

"I've never found there to be a limit on talent, but just really limits on opportunities,'' says Goldman Sachs chief diversity officer Megan Hogan.

Last year, Goldman launched a program in which 125 students from eight historically Black colleges worked with coaches and learned about opportunities at the firm.

In 2020, Goldman announced new goals to increase the recruitment of diverse candidates at various levels of the firm by 2025. The goal for Black employees to be 11% of analysts and associates in the Americas was reached that year, while 17% of those positions in the Americas were filled by Latino staffers, surpassing the firm's goal of 14%.  

Among vice presidents, the aim is for 40% globally to be women, 7% of vice presidents in the U.S. and U.K. to be Black, and 9% of executives at that level in the Americas to be Latino within the next three years.

DOES YOUR DESKMATE EARN MORE?: How much does that job pay? New laws across the country are helping job applicants find out

LOSS OF FACTORY JOBS WINNOWS MIDDLE CLASS: Where have the manufacturing jobs gone as U.S. factories closed?

Like Wells Fargo, compensation for senior executives is tied to meeting goals to make leadership and their teams more inclusive. And last year, the firm had its most diverse class of managing directors ever. Among the directors, 30% were women, 5% were Black, 5% were Latino, 28% were Asian, and 3% identified as LGBTQ.

"We're focused on the recruitment but we are equally focused on the retention of talent at the firm,'' Hogan says. "We know that what gets measured gets done.''

'Excited for the future'

The various goals and programs many financial firms are putting in place to increase equity are a positive start, says Duke's Rosette. But corporate leaders must recognize they may encounter resistance or ambivalence to such efforts and make decisions to push through anyway.

"People want to see change and they want to see change immediately,'' she says. "But this is not going to occur in two years. This needs a multiyear plan.''

Companies need to figure out their priorities, measure their progress, and adjust their strategies as need be, she says, all the while making sure employees and executives continue to recognize the importance of becoming more inclusive. 

"This takes time and this takes commitment and most importantly it takes consistency,'' she says.

Like many graduating seniors, Haywood has had some trepidation as he prepares to leave the confines of college to try and carve his place in the professional world.

"I'm graduating into the real world now. I'm going to have more real responsibilities."

Then, he had his first interview with the insurance company that contacted him in February. Roughly half a dozen more interviews followed throughout March.

Last week, Haywood's phone rang. It was one of the company's managers and he wanted to hire Haywood as an underwriting trainee. He would spend 18 to 24 months working on policy renewals and earning certifications before becoming an underwriter and continuing "to level up from there,'' Haywood says.

On Sunday, he officially accepted the position. 

"Now that I have something secured, I feel a lot more confident and excited for the future,'' says Haywood. "Graduating is a lot less daunting.''

While Haywood says he didn't get job offers as quickly as he'd hoped, he feels the monthslong process of looking for a position made him sharper. He got more comfortable with every networking chat over coffee, more poised with every interview.

And he feels that as a young Black job candidate, he got a fair shake.

"I do feel I was given a chance,'' he says. 

Haywood does wonder about some of those interviews that didn't move forward.

"I'm curious who got that second call back ... and I wonder if they did anything different than I did,'' he says. "Now that I have this offer, I may circle back to a couple companies I was interviewing with and ask, out of curiosity, for my own future growth, was there a specific reason I wasn't selected.''

But he is excited about this new opportunity and the growth he expects to experience.

"It's official now,'' he says. "I've just got to finish this last quarter, finish strong, and it's showtime.''

Contributing: Jayme Fraser

Just how diverse is the finance industry? One Black college student's quest for employment offers glimpse - USA TODAY