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Goldman Sachs is abandoning on-campus interviews for undergraduates at elite schools and will now ask students to use pre-recorded interviews to pitch for a job at the bank.
The Wall Street bank announced the new initiative last Thursday along with a range of other innovations it says will make its recruitment more consistent and rigorous, the Financial Times reported.
Under the new approach, candidates from any school will use a video platform interview programme called HireVue, to make their first impression with the bank.
Goldman recruits from 400 schools globally, of which 225 are in the United States. But more than half of the undergraduates it traditionally hires comes from a group of less than 50 “target” schools, including prestigious Ivy League colleges.
Russell Horwitz, co-chief operating officer of the securities division at Goldman pointed out top executives at the bank who have succeeded despite not graduating from the Ivy League.
Chief financial officer Harvey Schwartz attended Rutgers University, while chief operating officer Gary Cohn attended American University, he said.
The bank has lately found that students from places like Harvard and Yale might be less likely to stick with the firm over the long term, with many bolting to other jobs after just two years, Horwitz told The Wall Street Journal.
If recruiters are “going to invest the time to attract people, they want to make sure they’re getting a higher likelihood of people being here longer and having a strong career,” he said. “Having access to a broader funnel of candidates, and thinking differently about experience and background, is just a better investment.”
Mike Desmarais, global head of recruiting, said the bank is also changing the interview protocol and will use standardised questions that will allow for better comparisons among the candidates.
As for resumes, he said, the firm is using technology to scan them for certain words and experiences that it has found are good barometers of a person’s success at Goldman and is exploring using a personality questionnaire as part of the recruiting process, CNBC reported.
The bank insisted the new approach was not being taken in response to difficulties it faced in hiring and retaining talent.
The new strategy also does not mean Goldman will abandon its relationship with elite schools. The firm will still have an on-campus presence at these schools, but technology will allow it to reach a much bigger pool of people who are interested in working at the firm.
JP Morgan uses the similar programme for its retail bank hiring.
After passing the video screening, second-round candidates are invited to a ‘structured interview’ where questions will be more prescriptive to allow for candidates responses to be more easily benchmarked against each other. The changes will go into effect in July when undergraduate recruiting kicks off.
“The number one priority is how do we find more terrific people that are potential candidates for the firm,” said Edith Cooper, global head of human capital management at the bank.
“Leveraging technology will help you get to more places.”
Cooper insisted that the new system would not be something candidates could learn to game. “If you go in there with a script because that’s what everyone says you’re supposed to say it doesn’t take long for people to figure out what it is.”
Darren Tay, Director, BTI Consultants thinks it is a smart move by the bank to open up the hiring pool to people from different backgrounds. “Today’s companies want to be see as an equal opportunity employer. They don’t want to be seen as focusing only on the elite schools. It enhances the employers brand by giving everyone a chance,” he said.
He noted Google also made a similar change to their hiring strategies two years ago by opening up to candidates that do not have an Ivy League background.
An advantage of opening job application is that the high-achievers from famous schools tend to lack intellectual humility- the willingness to learn.
“Smart people tend to think they know it all and that prevent them from learning. People who are not from elite background tend to be more adaptive to learning that is important for the company to grow,” said Tay.
Nick Lambe, managing director of Links International pointed out a number of the bank’s senior management did not attend Ivy League universities. Therefore there is a strong belief that people with such background might not necessarily always be the best people to run a bank.
“I don’t think we should read too much into this (the new hiring process) with respect to Goldman’s talent pool. They will still only accept the best of the best, but this talent pool will have a more diverse background and therefore this may challenge the status quo within the bank and potentially produce better results.,” he said.