The CEO of 'Big 4' accounting firm EY says government programs aren't doing enough to tackle income inequality, and it's time for executives to step up
- In a conversation with Business Insider, EY CEO Carmine Di Sibio said
income inequality is a national problem that CEOs need to help tackle. - This is a sentiment that has been echoed by other business leaders recently. For example, Ray Dalio, the billionaire founder of the hedge fund Bridgewater Associates, recently said the American dream "does not exist" right now and that inequality is a national problem.
- Di Sibio, along with a handful of top business leaders like JP Morgan Chase's Jamie Dimon, have teamed up to expand a program aimed at getting more Black and brown professionals into well-paying jobs at their companies.
- The initiative, called the Jobs Council, aims to hire 100,000 New Yorkers from low-income backgrounds by 2030.
- The CEOs are partnering with New York City's public college system, CUNY, to train 25,000 people for jobs at their companies.
- Di Sibio also discussed the future of capitalism and future of hiring.
EY's CEO Carmine Di Sibio says he's living proof of the American dream.
Di Sibio immigrated to the US from Italy with his parents when he was just three years old. His mother and father worked blue collar jobs and emphasized the importance of working hard in school.
The hard work ethic engrained in him by his parents paid off. He landed a spot at Colgate University and eventually secured a job at the professional services firm EY, where he is now the global chairman and CEO.
"I'm kind of living proof of the American dream, and that's something, an opportunity, that I think every child should have," the 57-year-old business leader told Business Insider.
It is an opportunity every child should have, like Di Sibio said. But research suggests not everyone gets an equal shot at success.
The gap between the rich and poor is growing, Harvard University research shows. In 2018, households in the top 20% of income earners (with incomes of $130,001 or more) brought more than half of all US income, more than the rest of all Americans combined, per Pew Research analysis of Census Bureau data. That's important when talking about the opportunities children have. Recent research by Georgetown University shows that income is a better predictor of high socioeconomic status than good school grades.
Billionaire hedge fund manager Ray Dalio recently said the American dream "doesn't exist" amid alarming national inequality. Income inequality is a national problem, Di Sibio agreed. It's one that CEOs need to respond to, he added.
Di Sibio, along with a handful of top business leaders have teamed up to expand a program aimed at getting more Black and brown professionals into well-paying jobs.
Along with JP Morgan Chase's Jamie Dimon, IBM's Arvind Krishna, McKinsey's Kevin Sneader, and Accenture's Julie Sweet, the CEO is spearheading a program called the Jobs Council. Together with other companies, the leaders are teaming up with New York City's public college system, CUNY, to hire at least 100,000 New Yorkers (25,000 of them CUNY students) by 2030.
"This effort will focus on equipping New Yorkers in low-income and Black, Latinx, and Asian communities with the skills that they need to access in-demand jobs and meet employers' needs," a press release reads.
Business Insider spoke with EY's CEO to talk about the initiative, the future of education, and the state of inequality in the US.
The following transcript has been lightly edited for clarity and length.
How EY and its partners plan to combat inequality at the local level
Marguerite Ward: You're part of a jobs initiative to address unemployment in the Black and brown community. Tell me what specific steps you'll be taking and what being part of this program means to you.
Carmine Di Sibio: When you really look at what the COVID pandemic has shown us, it's shown us that life isn't fair. And for people who've been on the lower end of the economy and people who have not been able to get good jobs, it's hurt them the most.
This is a program that we started several years ago with JP Morgan Chase, and now it's evolved into a much bigger initiative. We're really committing to answering these questions: How do we deal with income inequality? And do we get the Black and brown community in New York City the really good jobs that are out there? How do we get people trained so companies like EY are hiring these types of people around the city.
The driver behind this has been Jamie Dimon at JP Morgan [the company's CEO], but we've all been part of it. We've all been going through several meetings. And the idea, Marguerite, is to get people trained up in things like technology so then they can come to EY and work in our technology consulting or technology area for internal use. We are creating a partnership with CUNY. And we're making sure people get the training, so that we can hire them.
This really gives African Americans, Latinos, and so forth, a better chance at really good jobs at companies like EY. We're driving for 100,000 jobs through this initiative by 2030. We're hoping to do better than that as more companies sign on.
Going beyond the numbers and making sure marginalized communities feel included
Ward: A big part of tackling inequality is getting people into the door. But the next important part is retention, promotion, and making Black and brown people feel included. What steps are you taking to make sure the retention is there and that they feel included.
Di Sibio: We take inclusion incredibly seriously at EY. It's something that all our leaders are evaluated on in terms of inclusiveness. Our leaders are held accountable to make sure that all our people feel included. This program is something that's going to get a lot of visibility around EY, also our leaders are going to be held accountable to make sure that this works.
In our business model, we don't retain everyone we hire at the junior levels. You know, it's very much a pyramid, and some people move up every year and so forth. So retention is not going to be perfect, but our business model of making sure people get overall training while working with us, making sure people develop is there. You know many of these people end up working for clients and end up becoming 'alumni of EY' and that's very beneficial to us as well. But obviously we'd like to keep them all the way through.
Our issue hasn't been so much keeping them, our issue has been the supply side. Not having enough [diverse talent] coming in. And if I look at different parts of diversity and inclusion, gender, for example, we hire over 50% women, I think it's 54% women. But by the time it's time to make partner, about 30% of our new partners are women, which is much higher than what it used to be, and improving every year, but this is where we have to get in terms of inclusion.
Ward: You touch on an issue in diversity and inclusion (D&I) that many are calling for: to hold managers accountable for D&I goals. Can you explain a little more about how you hold managers accountable?
Di Sibio: Under our new
The changing role of the CEO
Ward: You mention Jamie Dimon spearheading this initiative. In the Business Roundtable's statement of purpose in 2019, he stated that the role of business is not just for its shareholders, but for its stakeholders. What is the role of a leader today? Some would argue that reducing inequality seems outside the purview of what a business leader is responsible for. What's the role of a company leader today, in this climate?
Di Sibio: No, I would say completely the opposite — a company leader today has to take into their job all the above, all stakeholders. Two areas that are going to come out of COVID that all CEOs have to be focused on, one of them is around income inequality, and this initiative is part of that. And the other is around sustainability.
One of the greatest stakeholders in a company is its employees and employees are demanding our leaders are much more progressive on this. You know the time of the CEO only concerned about profits or "shareholders" — I think that's a time of the past. Because today, if you're not concerned about all stakeholders, you're gonna have a lot of issues with your employees, with your investors.
The direction capitalism needs to go in
Ward: I write for a section called Better Capitalism. Part of it is interviewing thought leaders and company leaders about the state of our economy. What state of capitalism are we in now?
Di Sibio: I think when it comes to talking about a
Ward: More leaders in business are talking about inequality in general. We have Ray Dalio speaking about how the American dream currently "does not exist," we have Mark Cuban calling for more of a "compassionate capitalism," why are more business leaders talking about this? There seems to be a really big shift in the public conversation in the last few years.
Di Sibio: I think probably one of the main reasons is that business leaders realize we have to be in this game, and we have to help. You know I think so many of the government programs out there are doing so much, but not enough. And I think the private sector has a role here. It started with the Business Roundtable's definition of a corporation, and now we all feel like the only way we're going to deal with capitalism, and where we need capitalism to be today, is to make sure we create jobs, and we create opportunities.
As you say, with Ray Dalio and the American Dream, you know, I go back to myself. My family immigrated here when I was three years old from Italy. My parents had blue collar jobs. They worked incredibly hard for my brother and I to have a better opportunity. And we were fortunate enough to go to good schools, and get good jobs. I'm kind of living proof of the American dream and that's something, an opportunity, that I think every child should have.
We need all people to have that opportunity.
Ward: So this is a part of extending that opportunity.
Di Sibio: Absolutely.
We all feel like the only way we're going to deal with capitalism, and where we need capitalism to be today, is to make sure we create jobs, and we create opportunities.
How education and hiring will change in the coming years
Di Sibio: I will also say that when it comes to education, there are too many people out there getting four-year-college degrees that give them no real skills in today's job market. And I do think that's going to change. Our education system in general has to change and this is going to be one area that's giving kids some real technical skills, as opposed to a four-year-degree that's not really as valuable.
Now with that, the rules at each company for hiring is going to have to change as well. Because governments and companies, they over-index on all these jobs, their requirements are way above what the job actually requires. We at EY are somewhat hamstrung on this because many people at EY have to either be CPAs or lawyers, so we won't be able to do this on a big-time scale, but we'll be able to do this at least a little bit.
Ward: Yes, I remember speaking to Kelly Grier [EY's US Chair and Managing Partner] about this. She said that more and more companies are going to be looking to community colleges that are working on public/private partnerships to really meet the workforce demands.
Di Sibio: This project is an example of exactly that.
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