Dive Brief:
- In a hiring push to add $5 billion in revenue in the next 2 years, Goldman Sachs has changed its primarily internal-only recruiting policy and has begun hiring from the outside. The past year has seen the company add 15 partners from external hires, the largest addition in 20 years.
- In the past, the company promoted from within, pushing to retain the culture of the organization with homegrown talent. The new hires will join a partnership of 450, the majority of whom joined the company in their 20s as associates or analysts. Promoting from within stocked the company's top ranks out of Goldman-chiseled workers that senior leaders dubbed "culture carriers."
- A new CEO, also a former outsider, will take over in October. The hiring push responds to areas where Goldman sees an opportunity for growth, but relationships were lacking. The strategy revolves around “tremendous homegrown talent supplemented with a little free agency," the Journal reported John Waldron, Co-Head of the Investment Banking Division, saying.
Dive Insight:
Goldman Sachs isn't the first company to recognize that old hiring practices may need an update to scavenge top talent in today's market. The strategies that worked in the past don't always deliver what companies need today. It is now widely accepted that a diverse workforce, for example, will improve a company's bottom line.
An inner-company hiring policy probably won't keep up with the modern demand for diversity. Nor will it adjust for the need for more women in C-suite positions, which the #MeToo movement may have inspired, according to the Boston Globe. Demand for top talent has changed the way most companies hire — even gargantuan firms like IBM, where rigid hiring practices one reigned, have rethought the definition of a perfect candidate.
As new hiring strategies take hold, most companies have put a creative spin on their recruiting process, too. The old days of campus recruitment that netted employees and retained them through retirement is giving way to recruitment practices that gauge market conditions and adjust, in real time, to demand for talent against the needs of the firm. The new normal for Goldman Sachs may inspire change in other companies, entrenched though they may be in dated hiring policies.