Ways to Avoid Unintended Bias During the Executive Hiring Process

January 9, 2024 – Hiring at the C-suite and executive level typically involves considering many variables when evaluating candidates. To find the strongest “fit” for an executive role, candidates must undergo a gauntlet of interviews, assessments, and referencing, according to a recent article from JM Search’s Louis Montgomery and Chuck Egoville. Along the way, they are vetted against key requirements such as their educational achievement, professional background, track record, industry-specific expertise, transaction experience, cultural fit, ability to meet the hiring company’s desired business objectives, and much more.

Recently, JM Search examined over 100 search placements conducted since 2022 within the healthcare sector. This review included over 600 candidates for roles including CEO, CFO, COO/SVP of operations, and chief commercial officer with the intent of gaining additional insight into who was being selected for specific roles and why. The firm analyzed candidate pool vs. placement data related to education level, academy company experience (i.e., an organization well known as a place to start a career and is known for developing industry leaders), and demographics, including gender and racial background, to better understand how to best support clients with determining the exact executive profile faster and more effectively.

“Our analysis uncovered variances that suggest there may be unintended bias taking place in the later stages of the search process that impacts who ultimately gets the job,” said Mr. Montgomery. “The data demonstrated that final candidate selection was not representative of the presented candidate slate in terms of diversity – be it educational, ethnic, gender, or professional background. Restated, even if businesses are prioritizing a diverse slate of candidates for consideration, the ultimate placements demonstrate this is not necessarily yielding diverse outcomes.”

While JM Search’s findings are preliminary, they highlight some potential biases that if considered in the hiring process may improve how a company assesses and qualifies candidates against stakeholder needs and goals. The firm offers three notable trends that emerged from its analysis:

1. For women and people of color, having an advanced degree is advantageous to increase their likelihood of being selected for a role compared to their white male counterparts with similar backgrounds.

“Though holding an advanced degree such as an MBA, MD, or other master’s level degree is common at the executive level, it is even more so for candidates that are female and people of color,” said Mr. Egoville. From the total data set JM Search examined, 64 percent of selected/placed candidates held a Master’s degree. However, when further analyzing the data by gender, they found that of the candidates that landed the job – 62 percent of male placements and 72 percent of female placements held advanced degrees.

As a partner with JM Search, Louis Montgomery specializes in the placement of senior HR and DEI leaders and their teams. He helps organizations add diversity to their ranks with 75 percent of his placements having been women and 50 percent having been people of color. As a former HR and DEI practitioner, Mr. Montgomery understands what it takes to be successful in this demanding field. His deep experience as an executive search consultant have honed his skills as a top assessor of talent. His background includes recruiting experience across numerous sectors, including private equity-backed companies and publicly-traded firms across consumer goods, financial services, industrial, government contracting, higher education, trade associations, and non-profits.

The difference was even more stark among candidates of color who were selected for the roles – a staggering 92 percent of whom held master’s degrees. “Based on these findings, we suspect that companies may be placing a heavier weighting on the educational background on women and POC candidates when assessing their qualifications relative to white males,” said Mr. Egoville.

2. Academy company experience is disproportionately valued in the CFO function.

Mr. Montgomery notes that academy companies are typically large, brand name companies with varied functions and strong early career progression opportunities. According to JM Search’s data, the impact that time at an academy company has on the hiring process varies widely based on job function. Overall, 65 percent of placements had spent time at an academy company earlier in their career, however for the CFO function this figure jumped to 79 percent of hires.

Related: Successfully Hiring Your First Diversity, Equity, and Inclusion Leader

Compared to CEO placements, where just 43 percent of placements had academy company early career training. “Why this focus on training in the finance function? “We believe that it reflects the nature of accounting firm hiring and the desire for Big 4 accounting experience among hiring companies,” Mr. Montgomery said.

3. Women are more likely than men to change jobs after entering into a job search process.

“Controlling for other factors including race, a female candidate was more likely to change roles after engaging in a search process than her male counterparts,” Mr. Egoville said. “In other words, once a female candidate begins actively interviewing for her next opportunity, she is more likely to continue searching for her next role than stay with her current company when compared to male candidates.”

Chuck Egoville is a managing partner at JM Search and co-leader of the firm’s healthcare and life sciences practice. He joined JM Search in 1998 and focuses on the technology, healthcare, and life sciences sectors. Prior to his current role, Mr. Egoville was a founding member and co-leader of the firm’s technology practice. Over the past two decades, he has conducted more than 300 searches and worked with leading private equity firms and their portfolio companies to recruit leadership teams. Mr. Egoville currently serves on the finance committee, the talent and culture committee, and the board of JM Search. He routinely consults with investors in his areas of expertise during investment and M&A due diligence processes to provide feedback on leadership teams, corporate structure, and leadership strategies that may drive the desired outcome.

From the full data set of candidates JM Search examined, after becoming an active candidate in one of our search processes, 34 percent of women changed jobs relative to 27 percent of men. The trend was even more pronounced in the CEO and commercial functions. Among CEOs, 38 percent of women vs. 25 percent of men changed roles, while 46 percent of women vs. 23 percent of men changed roles for commercial functions.

What can we learn from this?

“We believe there is an opportunity for companies to evolve their hiring processes to ensure they are attracting the best, most qualified executive for each role without the limitations of potential unintended biases,” said Mr. Egoville. JM Search provides a few recommendations:

• Evaluate and adjust candidate messaging from the start. How you communicate, beginning with the position description, experience requirements, and preferences, can inadvertently exclude highly qualified candidates. Ensure your messaging aligns with truly required experience and promotes exposure to a broader pool of qualified executives from more diverse backgrounds.
• Increasingly focus on referrals and references. It’s common to unintentionally allow one positive or negative impression to influence an overall candidate assessment. Instead, move beyond common credentials and focus heavily on referrals and references. This real-world information is often a better predictor of what a candidate can do for the business in the future rather than on what they have done in the past. This approach also helps reduce potential “on paper biases” around things like advanced degrees and academy company experience.
• Remember that career progression and wins matter. An unintended bias for certain educational background, professional experience, or career pathway may disqualify the best true “fit.” Focus more on how the executive got where they are in their career. What hurdles and obstacles did they encounter? What wins have they had and how do those translate to future success within your organization?
• Consider their motivation. Is the candidate truly ready for a new challenge, role, and opportunity or are they just testing the waters? Unintended biases towards certain responses, rationale, or stories does not always signal a motivated candidate. Ensuring a deep dive into motivation – both professional and personal – can ensure you get a truly motivated candidate in the role.

“It is not easy,” Mr. Montgomery said. “Unlike work experience and education, many of these factors that point to future success can’t be measured directly. That being said, as we’ve seen firsthand, finding the right candidate, regardless of how they look on paper, will be most impactful for organizations over the long run.”

“To find the executive able to lead the next phase of growth, companies must re-examine their criteria and be more open-minded toward candidates that might not check every box on the traditional hiring process,” Mr. Egoville said. “The payoff will be worth it.”

Related: The Evolving Role of Chief Diversity Officers in Shaping DEI

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media