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By now, anyone who’s paying attention to workplace diversity, equity and inclusion knows that gender and racial representation are essential to organizational growth. Studies have shown time and time again that companies with diverse leadership teams are more profitable and innovative. Employees are also more engaged, and customer retention is higher.
Based on a study by legendary management consulting firm McKinsey & Company, when an organization has more gender and ethnic diversity, the likelihood of financial outperformance in the market is an average of 35 percent greater.
Achieving parity is a process
Diversity has proven to increase the bottom line. In 2017, companies in the S&P 500 closed the year at an increase of 19.45 percent. At that time,16 companies did not have a single woman on the board or in the C-suite. By the end of 2019, every company had at least one woman on their board — and closed the year at a nearly 30 percent increase. Plain and simple, diversity at the top is good for business.
So if the data is this crystal clear, why are women and people of color still so underrepresented in executive leadership? Recently, Mogul, the global diversity recruitment company of which I am CEO, held a “Diversity in Executive Search” webinar about this topic. Cathrin Stickney, the founder and CEO of Parity.org, a nonprofit that advocates for representation of women and people of color at the highest levels of business, shared insights with Mogul members.
She outlined that achieving parity in organizational leadership is a multi-pronged process and specifically highlighted the importance of making progress across representation. Recruitment is a foundational step in increasing representation. If you’re in leadership and looking to add diversity in your workforce — and you absolutely should be — there are five easily implementable executive recruitment strategies that you can take advantage of to give you the best chance to hire the top talent. Many of these I’ve come across in my personal executive search practice, and it’s changed the way we recruit at Mogul.
1. Eliminate unconscious bias at every opportunity. Unconscious bias is present everywhere and affects everything from recruitment to compensation, mentoring and promotion. Bias can create unintended setbacks in designing a truly diverse and inclusive workplace.
2. Be deliberate in your recruiting process. During her session, Stickney noted that there are no two ways around this; if you want to design the best team, you must be deliberate. This means creating gender and ethnically neutral job descriptions, taking out any overly casual or “bro” language, and eliminating age and other identifiers in your applications. Effective neutral job descriptions will attract top talent, and the removal of identifiers will allow you to look at their qualifications as objectively as possible.
3. Put together a diverse interview panel. Bringing minorities into your interview process shows your candidate that you understand the importance of different perspectives. In 2014, Intel began requiring that interview panels for all new hires include at least two members of underrepresented communities. Since then, Intel’s diversity numbers have shot up. Before the new requirement, 31 percent of new hires were either women or people of color; two years later, that number was 45 percent.
4. Hold your search firm or recruiter accountable. We hear a lot about diverse slates. But, as Stickney noted, you can have a seemingly diverse slate and still never hire a woman. You also could have 50-50 gender parity in your slate, but if everybody comes from the same ethnic or cultural background, that’s not true diversity. Stickney defines true diversity as a representative slate. When working with an executive recruiter, request candidates who represent the gender and racial makeup of your country or region and make the search firm you’ve hired commit to bring a representative slate of qualified candidates and hold them accountable to deliver what you want. Top executive recruiters will have an expanded network of diverse individuals, so a good rule of thumb for an effective representative slate should include 50 percent women and 40 percent people of color. Don’t settle for the sake of time, and push back if you don’t get what you’ve asked for.
5. Be aware of common myths and see through them. Stickney pointed out three common myths within hiring practices that need to be addressed. The first is that top talent went only to top schools. I say this as a Harvard Business and Yale graduate, but there are plenty of incredible people who have risen through the ranks via their own grit and tenacity who have never received a degree. I certainly have my own bias when a fellow Yalie’s application hits my desk, but anyone who has hired enough people will agree that top schools matter less than the person’s passion for their work.
Second, Stickney points out that “culture fit” is a buzzy phrase that needs redefining. Hiring for culture fit by way of personality fit only asks things like: Are you like me? Can I get along with you? Can we socialize together? Do I understand you? Do you understand me? While it’s important to know if you’ll be able to work with someone on a day-to-day basis, these criteria should carry only so much weight. Through the hiring process, you should define your culture by company values and match the candidates who share those values.
The third myth is the notion that there are not enough women and people of color that qualify for the open executive and board seats. As Stickney pointed out, this is a network problem. We all need to continue to diversify our networks if we want to find better candidates. There are plenty of qualified women capable of moving up the ladder. It’s a matter of being active on professional platforms like Mogul and LinkedIn, and diversifying your network to find them.
Related: Be Intentional About Diversity
Progress is happening, but slowly
A final word on the progress we’re all making together. As noted in the 2019 Spencer Stuart Board Index, a record-breaking 59 percent of new directors are diverse, and women constitute 46 percent of the new directors coming in. Women and minorities now represent a combined 39 percent of all S&P 500 directors. Yes, it’s a new milestone, but it’s still far from 50 percent.
Creating a diverse, equitable and inclusive workforce is a top-down effort, and I believe organizations need to be publicly committed to it. Being committed to diversity and inclusion allows top talent to know where you stand, and lets your current employees, suppliers and customers know you are a company that does the right thing. Posting about your successes on your public-facing channels highlights that you are a champion of diversity and will attract the best and the brightest to your organization.