Executives at one of the country’s largest investment firms will be required to interview job candidates with a diverse panel and face lower pay if they fail to hire too few minority employees.
Boston-based State Street plans to triple the number of minority staff in senior roles by 2023 and is using diverse hiring panels to do so. Under the policy, executives must show that they have made an effort to increase minority representation at the firm or face lower year-end bonuses, according to the Sunday Times, which reported that staff will have to receive “special permission” to hire white men.
“All of our leaders have to demonstrate at their annual appraisals what they have done to improve female representation and the number of colleagues from ethnic minority backgrounds,” said Jess McNicholas, the bank’s head of inclusion, diversity, and corporate citizenship.
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Recruiters of middle management at State Street are now mandated to establish a panel consisting of four or five employees including a woman, and preferably a person of color, that will evaluate new hires. McNicholas said that while white men will still be hired, recruiters need to show that the panel interviewed a diverse slate of candidates.
In an email to the Washington Examiner, a State Street spokesperson denied the charge that special approval would be required to hire white men.
“Hiring managers do not need special approval to hire white men. This is factually incorrect,” the spokesperson said. “We are committed to diversity and inclusion and, as such, diverse panels of candidates. We hire the best candidate for the role.”
“We work to ensure a level playing field for candidates of all backgrounds and ensure that our hiring decisions are well informed and not biased in order to select the best candidate for every job,” the spokesperson added.
The initiative comes amid a nationwide push to hire more minorities in the banking industry, which has faced criticism for its lack of diversity.
For example, Goldman Sachs set a target of having black employees make up 7% of its vice presidents by 2025 and Latinos to comprise 9% of workers in that position. Deutsche Bank has the goal of making 30% of its senior executives women by 2025, up from the 24% that currently occupy those roles.
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State Street, which has pledged to hold itself “accountable for strengthening black and Latinx owned businesses,” has advocated for more women and minorities in the workplace in the past. It commissioned the “Fearless Girl” statue, which was unveiled to mark International Women’s Day in 2017.
The bronze figure, which features a young girl standing defiantly with her hands on her hips, was originally placed in front of the iconic “Charging Bull” statue, although it was later relocated to face the New York Stock Exchange after complaints from Arturo Di Modica, sculptor of the Charging Bull.
