Graduate programs can be an excellent way for junior candidates to climb the career ladder whilst also figuring out exactly what career path they want to take. When students finish university (Bachelor, Master, or PhD) it can be difficult to know exactly what career path is right for them, especially as they’ve spent the vast majority of their early adult years studying.
For many people, they don’t even know what job roles are out there, which is why a graduate scheme can be a great stepping stone to figuring this out. When looking at the finance industry, it is known to have great graduate schemes that offer variety and breadth of experience, however, they can be difficult to get on due to a high volume of applicants as well as advanced entry requirements.
There is also a debate surrounding nepotism within corporate industries, and how these are making graduate schemes harder to access for those who are from disadvantaged backgrounds.
“Last year, business consultancy Danesmead ESG wrote about the lack of social mobility in financial services. It looked at how the “myth of meritocracy” – a belief that the best person for the job gets there on merit – perpetuates the lack of progress in social mobility because it ignores “the disproportionate advantages offered by a higher socio-economic upbringing”, including education and financial support from parents to do unpaid work experience.” – [Source]
We’re going to give an overview of nepotism and how this has affected the industry, as well as some actionable tips for organisations and candidates to ensure a more fair and equitable selection process for Finance graduate programs.
Nepotism in graduate schemes
“It’s not what you know, it’s who you know!” – How many of us have heard this phrase? Nepotism is defined as the practice among those with power or influence of favouring relatives, friends, or associates, especially by giving them jobs. And, it’s pretty rampant in most corporate settings.
It’s natural that we want to follow in the successful footsteps of our parents or close relatives, but it can mean that opportunities are dished out based on the wrong reasons, instead of being awarded to those who have the correct skills. While graduate programs in finance can provide valuable opportunities for talent development, there’s a risk that they may disproportionately benefit individuals from privileged backgrounds.
Nepotism is everywhere around us, whether it’s you putting in a good word for a friend if they’re interviewing at a company you work at, or you’ve been recommended a candidate. Unconscious bias can seep into our decision-making, especially if there isn’t a proper process in place.
Equally, people in power within financial institutions will naturally have the final say and ‘upper hand’ with decision-making, which can also skew how people are hired as they can bypass a process.
What has nepotism looked like in the past?
- “Ivanka Trump and her husband Jared Kushner were both appointed as advisors to former US President Donald Trump, despite having no prior government experience. Ivanka Trump is the daughter of Donald Trump and Kushner is his son-in-law.
- Dylan Lauren, daughter of fashion designer Ralph Lauren and founder of Dylan’s Candy Bar, a chain of candy stores.
- David Cameron, former UK Prime Minister, was accused of nepotism after he appointed close friends and acquaintances to government positions. This included giving jobs to his former university friends and his wife’s personal stylist.” – [source]
These are just some examples of how nepotism is rife in some of the most influential parts of our society, whether that be locally or globally. It would be naive to assume that this doesn’t happen in the workplace.
How can you ensure that what you’re offering is fair and equitable?
Although unconscious bias is always going to be there, there’s more that you can do beyond simply offering unconscious bias training to interviewers for graduate schemes. Here are a few ideas:
Merit-based admissions: What are your entry criteria for a graduate scheme, and what do candidates have to showcase beyond a CV? Not all candidates will have strong academic grades, but this doesn’t mean that they should automatically be eliminated from the selection process. Instead, think about how an interview, presentation, or short exam can offer a level playing field for all shortlisted candidates beyond who they are on a piece of paper.
Evaluating your current process: Do a deep-dive into your current process and figure out what is and isn’t currently working. Take inspiration from large-scale graduate schemes and look at the process that they implement for their candidates.
Putting ‘nepo candidates’ through the same process as everybody else: Most importantly, it should be the same process for all. Just because someone is related or friends with someone already in the organisation, doesn’t automatically mean that they should get the job. You should also refrain from informing interviewers that they know someone from within the organisation to reduce unconscious bias and give them a fair opportunity to interview someone at face value.
Uphold salary bandings: There should never be ‘favourites’ with salaries, and it’s surprising how many ‘under the table’ agreements are made to favourite particular candidates and pay them more. Employees talk, especially graduates who arrive at a grad scheme in a cohort. Everybody should be paid equally, and this can be achieved using clear salary bandings.
Finally, have a strong review process that happens each quarter. Look at the performance of everybody on the grad scheme and assess who is taking the opportunity seriously. Minimising nepotism in the workplace is essential for creating a fair and meritocratic environment where all employees have equal opportunities, particularly in the Finance industry where there are still gaps in gender balance and ethnicity balance.
What are your thoughts on graduate schemes in finance, and how do you think they can be improved?
