Without a doubt diversity across organisations from the top down matters. McKinsey and Company’s latest report Delivering Through Diversity, confirms this. Contributor Susie Cummings, Founder and CEO – Nurole.
The report states: “Using 2014 diversity data, we found that companies in the top quartile for gender diversity on their executive teams were 15 percent more likely to experience above-average profitability than companies in the fourth quartile. “In our expanded 2017 data set this number rose to 21 percent and continued to be statistically significant. For ethnic and cultural diversity, the 2014 finding was a 35 percent likelihood of outperformance, comparable to the 2017 finding of a 33 percent likelihood of outperformance on EBIT margin.”
The Parker Review eloquently moved the argument for diversity beyond simply a question of immediate performance and made the moral case, as well as highlighting the broader stakeholder impact as I have outlined in a past article on Why is board diversity important?
Diversity must not become a tick box exercise
However, it is important to distinguish between cause and correlation when considering the significance of diversity. There is a real danger of a tick box approach when it comes to diversity as organisations try to reverse engineer performance through token diversity hiring.
Candidates shouldn’t be shouting out about their gender or ethnic background to make themselves more likely to secure a position. And recruiters should not be scouring social media photographs of candidates to ascertain if Jordan Jones is male, female, transgender and/or a person of colour. Both these things happen because the current talent identification system is flawed. It does not naturally lend itself to creating diversity, and if it does it is only at a superficial level.
Executive search is outdated
Headhunters and those responsible for finding talent have a love hate relationship based on a mutual dependency. I know, I founded and ran a successful international headhunting business, Blackwood Group, and spent over three decades in the industry. Over time, I became as frustrated as the boards and HR teams I was serving with the limited pool of talent that headhunters worked with.
The ‘Little-Black Book’ method of role filling, while slightly improved with the advent of online databases, is no longer compatible with twenty-first century board and C-level job specifications, which increasingly desire a shortlist of top talent from diverse backgrounds, transcending sectors, organisation size, ownership structures and geographies.
The global search firms claim to have a global network that distinguishes them from the high quality search boutiques, but as everyone who has ever worked in a global organisation knows, it’s hard enough to collaborate effectively with those on the same office floor, let alone those on another continent and time zone.
Online job boards are not the answer
Digital advertising and online job boards demonstrate how technology is being used to get more eyes on jobs, and the world’s most successful digital employment social network, Linkedin, does a fantastic job of getting many global candidates in a single searchable space. However, both typically drown organisations and recruiters in a high volume of off-specification candidates, which often makes it more trouble than it’s worth.
Technology in partnership with human expertise is the future of hiring
The answer is to combine the best of both worlds – the scale and reach of technology and the professional expertise and insights of traditional search. We saw this paradigm shift first in the field of chess where, after IBM’s Deep Blue first beat World champion Gary Kasparov, it was a combination of machines and non-expert chess players that trumped both machines and expert chess players acting independently.
We have seen parallels in the real estate market with platforms like Zillow and Rightmove bringing more liquidity to the traditionally opaque world of property, enhancing the effectiveness of traditional estate agents. We have seen it in the transportation market with platforms like Uber, Lyft and ViaVan who have opened up what was a closed and antiquated industry. Now it is time to shine the light on talent markets where established players have failed to innovate to create better customer experience, better diversity and better outcomes, for both candidates and clients.
There are a few platforms working in this space on a largely regional level such as Hired and Vettery, who focus on junior and middle management roles. I designed the Nurole network to focus on the most senior roles, filling global board and C-level roles, markets which have historically favoured those who knew the right people, rather than those most deserving.
This model makes the very best talent available to any organisation at the touch of a button and bypasses the cognitive bias of the intermediary in the initial outreach to prospective candidates. Casting the net wider to scoop up more fantastic talent levels the playing field, ensuring equal opportunity and thereby naturally improving the diversity of all candidates.
Take as an example the board placements that Nurole has enabled over the last twelve months in financial services alone: 53 percent have gone to women, more than doubling the 24 percent industry average reported in a recent Corporate Women Directors International (CWDI) survey, which looked at the boards of directors of the world’s largest banks and financial services institutions. This was not a conscious effort, but a byproduct of the process.
HR leaders must take the lead
As Einstein once said, “doing the same thing and expecting different results is the definition of insanity.” If you want to see better, more diverse outcomes, you have to harness technology to reinvent your traditional search process. This is my call to HR leaders to start thinking differently about how they integrate technology to drive diversity. If not you, then who?