Don't blame the pipeline.

Happy Sunday,

Many companies pledged to diversify their teams this past June, and as we enter Q4 of the fiscal year, it will be interesting to see how those promises generate tangible outcomes. A recent statement by the CEO of Wells Fargo reminds us of how much work we have to do to ensure that diverse, talented candidates are acknowledged – let alone given the opportunities they deserve. Consider how controversy like this may be reflected in the companies you work for now, or have worked with in the past.

Furthermore, consider the intent vs. impact in the language the CEO used. How can we make the same mistakes when we aim to rectify the lack of diversity in the spaces we occupy?

As always, you can support the newsletter by giving one-time on PayPal or Venmo (@nicoleacardoza), or subscribe monthly on Patreon. Thank you for your support.

Nicole

TAKE ACTION

If you are employed, take time this week to review your company’s hiring practices. Identify how they center hiring and retaining diverse talent.
Cancel your accounts with Wells Fargo (which has a history of racist actions).
Reflect: How may my unconscious bias impact who I hire/do business with? Who do I perceive as "smart," "talented," "genius," in my industry? Why?

GET EDUCATED

By Nicole Cardoza (she/her)

Like many companies, this past June, Wells Fargo made a commitment to diversity initiatives after the outrage of the death of George Floyd. But in that company-wide memo, the CEO, Charlie Scharf, said that the company was not meeting its diversity goals because there was not enough qualified minority talent. “While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of Black talent to recruit from,” the statement read (Reuters). The comment prompted criticism internally in the company and externally when Reuters broke the story in late September.

2020 hasn’t been the best year for Wells Fargo (has it been a good year for anyone?). Earlier this year, the company was forced to pay $3B in penalties after collecting millions of dollars in fees for bank accounts, debit cards and other products that customers – mainly customers of color – neither asked for nor needed (NPR). This is after they paid $2B in penalties in 2018 for misstating income information to sell risky mortgages to consumers (NPR). And just this week, the company has come under fire for placing at least 1,600 consumer mortgage accounts into forbearance – without the consent of its consumers (American Banker).

This also isn’t the first time the company has been criticized for its relationship to a pipeline, either, albeit a very different one. Wells Fargo was one of 17 banks to invest in the Dakota Access Pipeline, a 1,172mi underground oil pipeline hotly contested by Indigenous populations for how it disrupted sacred land, valuable natural resources, and caused harm to the communities it crossed (Time).

But let’s unpack the issue at hand. The "pipeline problem" is the theory that there “simply aren't enough properly skilled members of underrepresented groups for hire” – including women, people of color, veterans, members of the LGBTQ community, etc. (Entrepreneur). Major companies like Facebook and Google have cited this “problem” for their lack of diversity. This problem is most glaring in traditionally male-dominated and white-dominated fields, like science, technology, engineering, and banking.

And the "pipeline problem" is a myth. A series of reports prove that there are plenty of qualified, diverse candidates for companies to choose from. A Kauffman Fellow report from earlier this year notes that the number of Black professionals that hold master’s degrees has increased 133% from 1980 – 2016. The number of Latinx professions with master’s degrees has increased by 400%. But in contrast, the number of Black and Latinx talent in the industry has remained stagnant (AfroTech).

The problem is more centered in how these companies hire and promote diverse talent. According to a study from Payscale, 80 to 85% of jobs are filled through networking. This type of hiring makes it easier for recruiters to find qualified candidates without doing the legwork. Still, it also means that employees tend to be more homogenous, and with a limited existing pool of diverse staff, it’s likely that few referrals will be diverse, too (Forbes). Unconscious bias in hiring and recruiting also plays a part. Another study from 2015 found that candidates are 50% less likely to get a callback for a potential job opportunity if they had a “stereotypically African-American-sounding name” like Jamal, versus a “stereotypically white name” like Brendan (NYTimes). These issues imply that there’s more work companies need to do internally before shifting blame externally.

But Scharf’s words took the offensive. By expressing that there was a pipeline issue, Scharf places the burden on Black people, as if it is their fault that they’re not fully represented. If you were a Black person who was recently denied a job there, how would you feel? And what type of message does that send to other executives that may also be considering more diverse hiring practices at their organizations? Would they, like Scharf, decide that it’s not worth investing time and energy into? And how does this message add to the rhetoric we’ve been hearing about Black people from other influential leaders in our society?

And how does the company itself retain the diverse staff it already has? A story from the Charlotte Observer this week notes that, over the past year, seven Black female senior executives have left Wells Fargo (Charlotte Observer). Unnamed sources say that “the bank’s culture around race and gender” influenced why some of the women left, and the timing indicates that some left after the CEO’s comments in June. It adds another layer to the conversation – how is Wells Fargo actively working to retain diverse employees after they’ve hired them?

In a statement from the company after the news broke, Scharf apologized for his “insensitive comment reflecting my own unconscious bias.” Wells Fargo also committed to reaching out to diverse talent and creating an anti-racism training course to invigorate its diversity efforts (Wells Fargo website). But the damage of those words is done. Not only are they highly insensitive for these times, but they also do little to increase the favorability of a brand that’s consistently caused harm against communities of color. Statements like these also dissuade individuals from taking on positions at companies that don’t reflect their safety or needs, which exacerbates the representation issue. Hopefully, more executive leaders learn from this mistake and choose instead to lead with equity and understanding.

KEY TAKEAWAYS

This past June, the Wells Fargo CEO blamed the "pipeline problem" for the lack of diverse representation in staff
The "pipeline problem" is a myth, and places blame on the workforce instead of holding internal hiring practices accountable
There's a growing population of qualified diverse candidates in white-dominated and male-dominated fields that aren't being hired

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