Supporting diversity, equity, and inclusion will always be important to long-term business success and innovation. And building a diverse workforce starts at the top by placing an emphasis on hiring diverse executives and other leaders.
According to research from McKinsey & Company, companies in the top quartile of gender-diverse executive teams are 39% more likely to have better-than-average profitability than companies in the bottom quartile. The same trend was uncovered for ethnic and culturally diverse executive teams.
Despite the importance of Hiring diverse leaders organizations continue to fall short with building diverse executive teams, with only 13 of the top 50 Fortune 500 CEO positions held by gender or racially diverse leaders in 2023.
Creating and maintaining a diverse talent pipeline — especially at the leadership level — requires intentional effort, strategic planning, and long-term commitment. We’ve developed a guide to building and nurturing a diverse talent pipeline that will drive your organization’s success.
Hiring a diverse leadership team offers a range of benefits, from improved decision-making to stronger employee retention.
Hiring diverse leaders enables organizations to benefit from varied perspectives, experiences, and approaches, which can lead better problem-solving and decision-making. Research from Cloverpop measured the decision-making capabilities of teams based on the gender, age range and geographic location of team members. According to the research, the most diverse teams make better decisions than teams with limited diversity 87% of the time.
Similar to decision-making, diversity in executive and leadership teams can help support a work environment in which new and innovative ideas are encouraged. Leaders from different backgrounds bring unique insights that can help uncover innovative solutions for product development, market strategies, and operational processes. According to research from Boston Consulting Group, companies with more diverse management teams have 19% higher revenues due to innovation
When employees see diversity represented in leadership positions and across team members, this sends a strong message about the company’s commitment to supporting inclusivity and equal opportunities, which can help boost morale and drive engagement.
The Josh Bersin Company found that organizations that prioritize DEI initiatives are 2.6 times more likely to engage and retain their workforce and 4.3 times more likely to create a sense of belonging among workers. On the other hand, research from GoodHire found that 81% of respondents would consider leaving their job due to an employer’s lack of commitment regarding DEI.
Leaders with a variety of backgrounds, experiences, and perspectives can provide invaluable insights into different cultural nuances, consumer behaviors, and market trends. This deeper, diverse understanding enables companies to tailor products, services, and messaging more effectively to diverse customers, which can help businesses expand into new markets and revenue streams.
According to the Josh Bersin research highlighted earlier, companies that prioritize DEI are also 8.5 times more likely to satisfy and retain customers. Research from Korn Ferry also found that diverse-by-design teams are 70% more likely to capture new markets than homogenous teams.
Given the benefits of building a diverse talent pipeline — especially for your leadership, identifying and implementing proactive strategies can help you identify and engage diverse, qualified candidates.
Consider the following strategies as part of your broader recruitment efforts.
Many organizations rely on traditional executive search firms for their leadership recruitment efforts. However, these firms operate primarily offline and have limited candidate pools, with the same candidates often being circulated across several companies.
Instead of relying on a traditional executive search agency, diversify your talent sourcing channels and expand your reach by:
Manually reviewing candidates and lacking a standardized hiring process can introduce both conscious and unconscious bias into the hiring process. Some ways your organization can reduce bias when hiring for both leadership roles and other positions across the country include:
In addition to identifying and evaluating external candidates, also focus on helping diverse talent within your organization grow in their careers and be promoted into leadership roles. Some ways to do so include:
Continually tracking progress can help your organization identify improvements over time and ensure you’re reaching your diversity goals. Ways to measure progress of your diverse talent pipelining efforts include
Hiring diverse team members will always be essential to business growth and success. Prioritizing diversity at your organization starts with recruiting and hiring a diverse leadership team. And this doesn’t only mean Hiring diverse leaders for your immediate openings, but also taking a proactive approach to building a diverse pipeline for future executive and leadership openings.
At SucceedSmart, our powerful blend of AI-led technology and human expertise can help you quickly build a pipeline of qualified diverse executive and other leadership candidates.
SucceedSmart’s patented, accomplishment-based matching algorithm minimizes conscious and unconscious bias in the executive hiring process by focusing on specific achievements, rather than demographics or other personally-identifiable information. Additionally, our super-aggregated dataset of millions of executive profiles ensures all relevant candidates are identified and equally considered, not only those known to people and recirculated often across companies — as is often the case with traditional executive search.
Whether you have an immediate hiring need for a diverse leader or are looking to build a pipeline of qualified diverse executive candidates for future opportunities, SucceedSmart executive search software can help you quickly hire the most qualified candidates. Learn more — request a demo today.
