The Trouble with Diversity Hiring Processes

            A few years ago I decided to take my money out of Wells Fargo Bank. I had been with that bank since I got my first job in 1984. Back then it was called The Banking Center. Over the years, that bank was purchased by or merged with larger and larger banks until finally Wells Fargo became the owner.

            I never thought about switching – it is sort of a burden to do so. But then I heard news reports about sleazy business practices at the bank, and I decided to quit it. I bank at Webster now. I like having a local bank.

            Even after all of the bad news reports came out about Wells Fargo years ago and after executives vowed to change and improve, I guess they have not been able to follow through. The bad hits just keep coming.

            It came out last week that Wells Fargo was performing sham interviews of minority candidates after the jobs had already been filled in order to fulfill the company’s diversity hiring mandate.

            I’ve written about this stuff before. Diversity, equity, and inclusion initiatives are basically feel-good directives that don’t change much of anything in my opinion. Creating quotas does not work and is bad for business.

            Instead, businesses need to open up hiring to diverse groups by promoting their open positions to diverse communities. The cream will rise to the top. Putting diverse decision-makers in positions of power increases the likelihood that qualified minority candidates will be adequately considered for jobs.

            But creating artificial mandates to interview a certain number of candidates from this group or that group in order to satisfy a policy ideal doesn’t work. And it didn’t work at Wells Fargo because it was not authentic.

            Quotas and diversity initiatives breed resentment if they create a perception that gaining a job or promotion is based on factors other than merit. The same is true where the old boys’ network is used to make hiring decisions. In each case, culture suffers and cynicism thrives. Success for the hired employees and for the company as a whole is diminished.

            State and federal anti-discrimination laws prohibit employers from making employment decisions on the basis of protected classifications like race, religion, gender, sexual orientation, and ethnicity. They are good and important laws designed to ensure opportunity for all.

            More importantly, they are intended to promote the commercial interests of all those who participate in our economy. If the most qualified candidates are hired into positions of importance, that bodes well for the employer and for the consumer and economy. Promoting policies that encourage anything less is bad for the employee, the company, and society as a whole.

            Wells Fargo is doubly culpable, not just because it allegedly created a sham diversity hiring initiative, but also because it caused its employees – and now its customers – to doubt the authenticity of any of its hiring decisions. Is it a racist company? That’s part of the claim. Is it poorly-managed? The allegations suggest as much. Has it made illegal hiring decisions? We shall see, but the recent news is not helpful.

            Anti-discrimination laws are intended to benefit society, not just job candidates individually even though they are the immediate beneficiaries of a fair hiring process. Flouting those laws and skirting policies designed to ensure fair hiring is bad for business and bad for the economy.

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