Diversity and inclusion (D&I) is more of a priority today than ever before at most leading companies, yet many continue to struggle to attract and hire diverse candidates. It often seems that introducing new training programs, like those related to unconscious bias or workplace harassment, is far easier than actually bringing new talent into the organization — and nowhere is that challenge more pronounced than at the top.
In this article, we'll break down the current state of diversity in executive leadership, explain why small improvements in the diversity of your talent pool can make a big difference and then turn to some of the ways that executive search firms can help.
the current lack of diversity in executive leadership
There's a mounting body of evidence, and a clear business case to be made, that diversity initiatives aren't just good for individuals, but a boon for companies as well.
For starters, research from McKinsey shows that ethnically diverse companies are 35 percent more likely to have financial returns above industry medians. This research also indicates that diverse leadership, in particular, correlates with success. What's more, Deloitte found that companies with inclusive cultures are eight times more likely to achieve desired business outcomes.
At the same time, this is far from the norm. For instance, studies reveal that, even as underrepresented groups, such as women and other minorities, have become increasingly represented in non-managerial and managerial roles, their representation significantly tapers off as you move farther up the org chart.
In turn, that means companies hiring for executive leadership roles often proceed from a non-diverse candidate pool, which all but guarantees that leadership will remain overwhelmingly homogeneous.
more diverse candidate pools are essential
The good news for executive hiring committees is that even slightly improving the diversity of your candidate pool can result in significantly more diverse hires.
One Harvard Business Review study looked at real-world hiring data to answer the question: What impact does the diversity of the candidate pool have on hiring outcomes?
the results might surprise you
After analyzing the data, the study concluded that when only one finalist for a role is from an underrepresented group, that candidate has effectively zero chance of being hired. However, when you have two candidates from an underrepresented among the finalists — no matter how large the pool of finalists may be — the odds of making a diverse hire improve by nearly 80 percent. To increase the diversity of your executive team, in other words, having more than one representative of a given underrepresented group among the finalists is key.
For companies looking to improve the diversity of executive pools, the takeaway is that seemingly minor improvements in candidate diversity translate to big gains in eventual outcomes. And executive search firms can help them out.
how executive search firms can help
To recruit and hire more diverse leaders, you'll quickly find that you need to do more than simply post jobs to so-called “diversity job boards" — and that's where executive search firms enter the picture.
Executive search firms today have increasingly sophisticated sourcing and screening capabilities, leveraging complex metrics, A/B testing and messaging across channels to support clients' hiring goals. In some respects, these recruiting efforts bear a greater resemblance to marketing campaigns than traditional recruiting.
That means developing the right messaging and ensuring it gets in front of the right audience from the outset. And best-in-class executive search firms are experts at providing consultative services for clients to not only understand their needs and cultures, but crafting targeted messaging that resonates with key audiences.
What's more, these firms typically have large networks of relationships with "passive candidates" — talent who are currently employed and may not be actively looking for new opportunities. By tapping into these networks, they're able to provide far more diverse candidate pools, which — and studies show that’s an essential first step in improving outcomes when it comes to hiring diverse leadership.
land your next all-star executive
The experts at Tatum Executive Search understand the pivotal role that top-level executives, from C-suite officers to VPs, directors, senior-level managers and more, play in shaping business outcomes. We also understand the value of diversity at all levels of the organization, and have a demonstrated track record of success helping organizations realize their D&I goals, so no matter how complex or niche your needs may be, we've got you covered.
Connect with us below to learn more about our industry-leading executive search practice.