Behind BofA's hiring push in low-income areas
As Bank of America embarks on a big retail expansion, it is making the hiring of front-line bankers from low-income communities a priority.
Like several big banks, BofA for years has worked with nonprofits to hire people from disadvantaged communities, mostly for entry-level jobs in the back office. Those roles have been a steppingstone to corporate careers, especially for young people who cannot afford college, or for whom college life is not a good fit.
With plans to open 500 branches in the years ahead, BofA is revamping its recruitment efforts — and training more employees for client-facing jobs. The Charlotte, N.C., company announced plans last week to hire 10,000 people from low- and moderate-income neighborhoods over the next five years.
The so-called Pathways initiative is part of an effort by BofA to build a more established pipeline of talent in the low-income communities it serves — similar to the way it sets goals for recruiting college graduates and military veterans.
Additionally, as the company expands its retail banking division, it also simply has a slate of open jobs to fill.
“We recognize that there’s a need for economic mobility — and we have the jobs available,” said John Jordan, who is in charge of training and development within the consumer bank. “We need talent to fill those jobs.”
BofA operates just over 4,400 branches across the country, and just about a third of them are in low-income neighborhoods. Under the branch expansion announced earlier this year, the company will expand its presence in Denver and Minneapolis, and also enter new cities, including: Indianapolis, Pittsburgh, Cincinnati, Cleveland, Salt Lake City as well as Louisville, Ky., and Columbus, Ohio.
Entry-level employees at BofA earn $15 per hour and also have access to a full range of benefits, including education reimbursement if they decide to pursue a four-year or associate degree on the side, according to Jordan.
“We really value employees with local connections in our communities,” Jordan said. “We want the leadership and employees of all of those centers to reflect the communities that they’re in.”
In addition to working in the branches, employees hired through the Pathways program will work in areas such as call centers, mortgage operations, or in customer service for Merrill Edge, BofA’s retail brokerage.
The hiring initiative comes as BofA’s headcount overall has declined in recent years, as the company has focused on cutting costs and boosting profitability. As of March 31 it employed about 208,000 people, or about 1% fewer than a year earlier.
It also comes amid a fundamental shift in the role of the branch. As more consumers use digital banking services for basic transactions, they visit branches primarily for bigger financial tasks such as advice on investing and taking out a mortgage.
Through the Pathways program, BofA plans to work with national nonprofits — such as Year Up, the Urban Alliance and the Boys & Girls Clubs of America — to identify candidates who are interested in pursuing a banking career.
Once hired, the employees will work with BofA’s in-house training division, known as the Academy, where they will learn about everything from how to interact with customers to which button to push to open a new account.
“It is our intent to get them plugged into a company where we can really develop them,” said Jordan, head of the academy and adviser development. “We just want to have talented people who want to build a career here.”
One of the ways BofA plans to evaluate the success of the Pathways program, in addition to meeting its 10,000-person hiring goal, is looking at whether the company retains and promotes the low-income employees it hires.
For people hired in BofA branches, for instance, that could mean preparing them for long-term careers as mortgage lenders or other advisory roles.
“We’re thinking about how to bridge that into a licensed role,” said Betsy Goodell, a senior director in charge of corporate partnerships at Year Up. The Boston-based nonprofit also works with JPMorgan Chase, State Street and other companies.
Year Up offers a full year of job training to young adults, mostly between the ages of 18 and 24. The training involves what Goodell described as “corporate boot camp,” where participants take classes on topics such as business fundamentals. It also involves a six-month, on-the-job internship, with the goal of receiving a full-time job with a salary of at least $35,000.
This year, Year Up expects to place about 200 interns with BofA. That number will increase in the years ahead, as BofA’s Pathways program gets underway.
Placing interns in BofA branches has been a big focus over the past year, according to Goodell. Other recent interns have ended up taking back-office jobs in corporate campuses in Phoenix, Plano, Texas, and Jacksonville, Fla., in areas ranging from fund accounting to portfolio management.
“I want to see them have high retention at the bank, and progress to start off a career,” Goodell said. “That’s pretty exciting to us.”