In this sluggish economic recovery, jobs with livable wages and pathways to the middle class seem farther and fewer between. So the banking industry offers a glimmer of hope as a solid job creator and wealth builder for many Americans, particularly those of color.
In our recently released Opportunity and Diversity Report Card: Consumer Banking Industry, we project nearly 1 million jobs will be added to the financial sector by 2020. Financial planners, analyst and managers are among those highest in demand.
In 2010, financial planners median pay averaged $74,350.00, financial managers $103,910 and loan officers $56,490.00 per year. Planners and managers require bachelor’s degrees while being a loan officer requires a high school diploma or equivalent.
However, despite banks’ growing need for a talented and skilled pool of applicants, our research shows that people of color continue to be more often hired for entry-level positions and less often for those in upper management.
This certainly is not due to lack of supply.
College attainment by African-Americans has increased by 34 percent since 1993. And Latinos and African-Americans comprise the fastest growing segment of MBA graduates.
Instead the report shows the banking industry needs to strengthen their recruitment efforts by developing a stronger pipeline of minority applicants, establishing succession plans and connecting new hires to mentors and professional development opportunities.
Additionally, the banking industry must build contracting relationships with minority businesses (also referred to as suppliers) to continue to service an expanding and changing industry.
Supplier diversity is a critical measure of bank’s commitment to inclusion. However, minority businesses -- which more often are smaller businesses or one-man businesses -- continue to be overlooked by banks in favor of larger companies when competing for banks’ contracting dollars.
And with minority-owned businesses continuing to be on the rise, the fact that 1.6 percent of the supplier budget was the most any bank spent on African American suppliers and 5.3 percent was the most any bank spent on firms owned by people of color is disappointing.
But to meet this challenge, banks can strengthen their supplier diversity program by breaking down contracts to a smaller scale so DBE's (diverse business enterprises) can compete.
Though many banks have diversity efforts or programs, most lack a feasible and explicit goal-based timeline for achieving diversity outcomes. This somewhat explains why diversity in the industry has stalled over the last 20 years.
Recent reforms of the financial system -- including requiring banks to address diversity in both their workforce and supply chains along with banks -- gives hope that greater gains can be made for people of color in the future. And if you are college student at an HBCU, summer internship programs in leading financial firms like Gateway to Leadership can assist you in determining if a career in the banking industry is right you.
With our country rapidly becoming a majority minority, equal opportunity is as important to our nation’s economic future than ever before. The banking industry is in a position to answer this call by being inclusive and growing our economy in a way that can both strengthen black and brown communities and the country overall.
American Money is a weekly column written by Dedrick Muhammad, the senior director of the NAACP Economic Programs. To learn more about preventing foreclosure and personal finance, check out the NAACP Financial Freedom Center Facebook Page or on Twitter @naacpecon.
The opinions expressed here do not necessarily reflect those of BET Networks.
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