Morning Coffee: BlackRock's big effort to hire diversity candidates, and its problems. The secret intentions of men with beards
Like many employers in the financial services sector, buy-side giant BlackRock is bored with having a mostly white workforce at a senior level and is trying to remedy that by vigorously applying itself to bringing in ethnic minority candidates at every level of its hierarchy. However, its efforts are coming undone: as fast as it hires new minorities, the faster its existing minority employees seem to leave, particularly at the top end.
The conundrum was outlined in yesterday's BlackRock DEI Strategy Progress report and highlighted by Bloomberg. "In 2022, attrition rates of Black senior leaders nearly offset increases in Black senior leader hiring and led to senior Black representation staying nearly flat for the year," says the report. Something similar occurred with BlackRock's LatinX population, with the result that despite valiant hiring, BlackRock's LatinX recruits only increased their representation by 0.5% percentage points. Black employees left most at the managing director level, followed by the associate level. LatinX employees left most frequantly when they were associates, or VPs.
Because of these leaks, the ethnicity of BlackRock's employees still looks like this at different levels of the hierarchy:
This is despite strenuous efforts to make amends. Since June 2020, BlackRock has mandated that its hiring managers interview at last one woman and one Black or Latinx candidate for open positions, something that can be sidestepped only with approval from the CEO. Nearly 12% of new US hires were black last year; nearly 11% were LatinX.
Why are BlackRock's hard won minority hires leaving again? The report says it's because they don't know what's coming next in their careers. - There's no "visibility or transparency" on their "promotion trajectory or their place in succession planning." There aren't enough senior diverse role models for junior diverse hires to aspire to follow. Minority candidates don't always feel like they belong; middle managers don't always seem that bothered about implementing diversity policies.
BlackRock is setting about attempts to remedy this with a raft of new programs, including 'additional levels of calibration and review' for its promotions to eliminate bias. For the moment, middle managers don't receive 'clear incentives or substantive rewards' for treating minority employees equitably. Paying them to do so seems crass, but hasn't been ruled out.
Separately, if you are a man with a beard or you know a man with a beard, a new study suggests the beard has a purpose beyond simple facial adornment. "Facial hair among men is a display strategically deployed in intrasexual rivalry," suggest the researchers: the beard is not about appealing to women, but creating an impression with other men.
What kind of impression? In informal situations, men with heavy stubble or big beards can be perceived as dominant. In formal situations they might be perceived as enthusiastic, sincere and generous or unconventional and therefore unpredictable. Either way, it seems that men with facial hair don't like to be around other men with facial hair because it reduces their comparative advantage. If your boss has facial hair and you are male, it might be advisable to get rid of yours.
Meanwhile...
EY's US business is having revenue issues and is ramping up the pep talks. "Right now, what’s really important is stability...Remember that we are an amazing place to work...[there is a] lot of emotion in the system.” (Financial News)
Apollo is trying to raise some money for a new fund by allowing investors to cash out of an old one at a discount. Most investors have declined the offer. (Bloomberg)
Credit Suisse is fighting new accusations of “systemic fraud” and “deceit” over subprime mortgages. (Bloomberg)
Meta is cutting more than 10% of its UK workforce and closing Instagram’s new hub in London. At least 687 jobs of 5,000 UK jobs are being cut and more are at risk. (FT)
Guggenheim hired a team of London technology bankers led by Pieter-Jan (PJ) Bouten and Jonathan Dann from Greenhill. (Financial News)
About 113,800 US adults in households with annual incomes of at least $200,000 reported receiving benefits in the last seven days. (Bloomberg)
Above £100k, UK students are paying taxes at a marginal rate of over 70% as the tax-free allowance is withdrawn and student loans are repaid. (The Times)
Middle class burnout retreats are a thing. (Bloomberg)
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