- Wells Fargo has paused a policy that an ex-staffer said led to 'fake' job interviews being offered.
- It follows claims that staff were asked to arrange interviews to show a record of its D&I efforts.
- The pause will give the bank time to improve the policy, per The New York Times, citing a CEO memo.
Wells Fargo is temporarily pausing a controversial hiring policy that a former executive said led to women and people of color being offered "fake" job interviews, as a way of boosting the bank's diversity credentials.
The New York Times reported the story, citing an internal memo sent by Wells Fargo's chief executive. The memo was later confirmed to Insider by the bank.
On Monday, Charles Scharf told staff that the bank's "diverse slate" policy has been suspended for several weeks to give leaders time to make any necessary improvements and "fully understand how the guidelines should work."
The policy required at least half of the candidates interviewed for open positions paying above $100,000 to come from "diverse" backgrounds. Diverse, in this case, meant women and anyone from a background that's typically underrepresented.
However, several current and former bank staffers told The New York Times in May that they'd been directed to interview, or arrange interviews, with people of color and female candidates for roles they knew were already full. They suspected that this was partly to help the bank show a record of its diverse hiring efforts, according to The New York Times. One had alleged that he was dismissed after raising concerns about the policy.
The rule had been in operation informally for years but was formalized in 2020 in the wake of the killing of George Floyd as corporate America pledged to do more to tackle racial inequality, according to The New York Times. The bank also pledged to double the number of Black leaders at the bank over five years and to tie executive compensation to the targets.
In response to The New York Times' initial report, Kleber Santos, Wells Fargo's head of diverse segments, representation, and inclusion, told Insider's Marguerite Ward in May that the bank had researched the claims of the former and current staffers. He said the bank could "not corroborate the allegations as factual." The New York Times said it stood by its reporting.
In Monday's letter, Scharf said the suspension came after senior executives at the bank had concluded there was an opportunity to improve the "implementation around some of our activities," per The New York Times. The aim is to relaunch the policy in the month of July, Scharf said, according to the paper.
"The pause is a chance for us to review our guidelines and processes and to make improvements — it does not mean that anyone at Wells Fargo should stop hiring or stop actively recruiting diverse candidates," Scharf said.
Sharf defended elements of the policy, claiming that 42% of people hired for jobs paying more than $100,000 were members of a racial or ethnic minority since it was introduced — a five percentage point increase compared with previously.
Wells Fargo has been involved in several recent controversies regarding diversity and inclusion
In August 2020, the bank agreed to pay $7.8 million in back pay after it was accused of historically discriminating against more than 34,000 African American job applicants.
In September 2020, Scharf apologized for comments he made during a Zoom meeting, then repeated in a staff memo, that the bank had historically struggled to meet its diversity targets due to there being "a very limited pool of Black talent to recruit from."
Such a statement was not only false, but harmful because it ignores the often systemic racism that bars Black people and those from other marginalized backgrounds from the recruitment process, D&I experts told Insider's Marguerite Ward.
The bank published its first diversity report on June 1st. The number of black and Latino executives increased from 5.5 to 8.9%, and from 3.9% to 4.7% respectively in 2021. The proportion of female executives has increased from 41.7 to 44.3% since 2020.