Wells Fargo CEO Charles Scharf caused a stir on social media when statements he made during a company Zoom meeting were leaked by two anonymous employees. According to these employees, Scharf claimed that the company was struggling to search and recruit diverse talent in part because there is “a very limited pool of black talent to recruit from,” according to Reuters.
This is a common argument in corporate America. Companies blame their lack of workplace diversity on the available talent pool, claiming that Black applicants or other minority applicants just aren’t responding to job openings.
Even though companies with high workforce diversity boost their performance and innovation by up to 33%, many industries are strikingly homogenous. The tech industry is one example. Only 2% of Google’s workforce is black and 3% of Twitter’s workforce is black.
Although Wells Fargo has made strides toward a more inclusive workplace environment and Scharf has pledged to double the number of Black leaders over the next five years, the company has also received critiques about its policies. In 2012, Wells Fargo paid $175 million to settle allegations about charging Hispanic and Black customers higher mortgage rates during the housing boom.
There are several reasons why the argument about a Black talent shortage within certain industries is misguided and could actually be impeding progress toward more equitable racial representation. Here are some of the problems with this mindset.
Recruiting diversity takes strategic effort. It isn’t enough to post a general job description and see who applies. It takes a lot of work and intentionality to make sure a company is reaching a wide range of possible candidates—and sorting through a list of applicants to determine their racial backgrounds is as ethically problematic as it is unhelpful.
Low diversity among hiring managers is part of the problem. Statistics show that systemic racism and unconscious bias are two of the biggest barriers in both hiring and promoting Blacks in specific industries. If a company’s board and the majority of the hiring staff lack diversity, this imbalance will be reflected in other areas of the company.
Industry giants need to lead by example. It is alarming that the CEO of Wells Fargo would make such controversial statements, even if they were made internally to his own staff. For these comments to come from the highest level of the company indicates the issue is widespread. Industry leaders need to lead by example and set the stage for inclusivity in the workplace along with a zero tolerance policy for racial discrimination.
At RecDiv, we aim to close the gap between the rhetoric of corporate executives and practical, inclusive hiring strategies. We help employers and qualified candidates from Historically Black Colleges and Universities find each other. This allows companies such as Wells Fargo to provide access to internships and quality jobs to a wide range of students.