October 17, 2018 – Companies recognize the advantages and benefits of a diverse and inclusive workforce, but struggle to tap adequate sources of talent.
Sixty-three percent of senior executives say diversity and inclusion is either very important or extremely important, yet this same majority report that their workforces have average or below average diversity representation, according to a survey of global business leaders conducted by IIC Partners Executive Search Worldwide. When asked where companies look to procure diverse talent, 67 percent of the 461 senior executives surveyed pointed to HR departments and 25 percent said internal talent acquisition teams shoulder this responsibility.
Many companies have exhausted their “go-to” talent pipelines and must take new approaches to achieve their diversity and inclusion goals, the report said. The three largest barriers for identifying diversity candidates, according to IIC Partners: unconscious bias, simply locating diverse talent and a limited pool of diverse talent in the industry.
“Clearly, companies know that diversity and inclusion programs create a stronger workforce and want to expand these initiatives, but appear at times unable to penetrate the market to find and source this talent,” said Ruth Curran, global chair of IIC Partners and managing partner of MERC Partners located in Dublin.
“Executive search firms serve as trusted advisors and can provide access to larger talent pools across all functions, industries and cultures,” she said. “Executive search consultants offer a more objective and independent point of view and present a wider scope of diverse candidates for consideration.”
Implementing Diversity Practices
The supply and demand challenge for creating a diverse and inclusive workforce is further compounded by the failure of 48 percent of companies to request a diverse slate of candidates when hiring for senior executive roles. Over half (57 percent) of companies have failed to set any goals for hiring diversity candidates or if they have set goals, will not meet them by their target date.
“An overwhelming 87 percent of senior executives agree that diversity and inclusion creates a stronger workforce,” said Christine Hayward, executive director of IIC Partners. “Companies are very aware that diversity and inclusion positively impact a business, but are struggling to champion and implement it as a best practice.”
Diversity Hiring Is Lagging At CEO and CFO Levels
Across the executive ranks, five times more men than women were appointed to new positions, according to a report by TRANSEARCH. The study found that only one-fourth of newly appointed senior-level executives were diverse candidates.
“The lack of benchmarking and goal setting indicates an absence of ownership within the organization at the leadership level,” she said. “This responsibility can fall to human resources departments, chief talent officers or an external executive search advisory partner. Like any strategic initiative, companies will need to identify a leader or partner to spearhead diversity and inclusion programs to see results.”
Sixteen percent of senior executives in the Americas said diversity is nonexistent at the board level, while 25 percent of EMEA executives reported the same. Eighty-two percent view diversity & inclusion as a social responsibility yet 74 percent of senior executives report less than 40 percent of senior leadership teams are diverse.
The IIC report also cited the top drivers of diversity and inclusion programs: attracting and retaining talent, driving business results, enhancing external reputation and increasing employee engagement
Diversity and inclusion impact a business impact a business in three main ways, according to IIC: It results in better decision-making, strengthens corporate culture, and makes for better collaboration among teams.
“Women and diverse candidates will not be attracted to companies unless they can see an inclusive culture – an environment where there are others like them who not only survive but thrive and succeed,” Janice Ellig, CEO of IIC Partners member firm Ellig Group, recently told Financier Worldwide. “Companies with more inclusive, welcoming, safe, empowering environments attract the best talent and become the best companies.”
“With significant monies being spent and programs sponsored by senior management, I do not believe there is a lack of an ethos for diversity and inclusion by the C-suite,” she said. “However, while actions are there and have been for decades, accountability is lacking. Like the issue of accelerating the pace of change for women on boards, unless chief executives and boards make gender parity a priority, it will not happen.”
CHRO Influence Expands in Promoting Corporate Diversity
Plenty of organizations say they are looking to change the makeup of their workforce in terms of ethnicity, gender, sexual orientation and age, but in the end many fall far short. It’s 2018, and the view from the C-suite and boardroom still looks nothing like the ethnically and racially diverse world outside.
According to Ms. Ellig, companies should use five methods of making diversity and inclusion a core driver of their overall business strategy. First, over-hire where certain groups are underrepresented, from entry to senior levels, including the board. Second, focus on retention of underrepresented groups and ensure policies do not have an adverse impact. Third, measure progress annually and where shortfalls occur, increase the hire and retention of those underrepresented groups. Fourth, hold the chief executive and senior management accountable for diversity and inclusion results and shortfalls. “Finally, celebrate success with stories and transparency,” she said.
Veteran Recruiter Weighs In
Patricia Lenkov, founder of Agility Executive Search, said diversity helps make everyone in a company feel that they have a fair chance to succeed: “As we live in and businesses function in a diverse world and marketplace, having such diversity reflected in companies is important and can add meaningful insights to decision-making and strategic planning,” she said. “Inclusion implies that many different types of people can strive to attain leadership roles within the organization.”
“In other words, success is open to all,” she said. “This does not mean it is a handout, but rather that there are opportunities open to all who are qualified. This is important not only because it is equitable but because it is the hallmark of a true meritocracy.”
Ms. Lenkov also said that diversity in the boardroom leads to both a positive dynamic as well as better results. “Boards make decisions and solve problems,” she said. “It is well known in decision theory and research that diverse groups take longer to deliberate about a decision but when they finally agree and make a decision it is superior to that which is made by homogenous groups.”
“To over-simplify, if I am from Europe and you are from the U.S., there is so much in our frame of reference and experience that is distinct and uncomparable,” Ms. Lenkov said. “This means we will interpret the same information in very different ways. The way we solve problems and analyze information will be inconsistent, and it is precisely this inconsistency that can yield more robust discussions and conclusions.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media