Diversity Improvement: Measuring & Managing For Long-Term Success

August 27, 2015 Lee Hecht Harrison

Faced with headlines about their poor diversity numbers, the leaders of the biggest tech companies respond, saying they are committed to improving their workforce diversity. The CEO of a Fortune 500 company gives a mandate to the division head with the worst diversity metrics in the company: “Fix this!”

Unfortunately, “Fix this” is nearly always interpreted as: Hire some women and people of color ASAP. Check the box. Move on.

The problem is in no way limited to the tech sector. Across industries, this short-term transactional approach ends poorly among diverse talent — with high attrition rates and poor career trajectory among those who stick around, and possibly a weakened brand for the employer.

The corporate diversity problem is not dissimilar to the widespread problems at for-profit colleges. Less than one third of students graduate from these schools within six years. Such poor performance is a consequence of misaligned, transactional measures and incentives. These colleges receive federal funds based on admissions numbers rather than for achieving long-term outcomes, like graduating students in a reasonable amount of time with marketable skills.

The Problem

For more than three decades as an executive recruiter, I have observed that hiring managers — business unit heads and other leaders who make the ultimate hiring decisions — are often the primary obstacles to improving workforce diversity. In fact, when a recent Glassdoor study asked respondents who at their company is in the best position to increase the diversity of their workforce, the top responses were: hiring managers (45%), the CEO (42%), and HR departments (40%).

Hiring managers often don’t know how to effectively attract, recruit, onboard, develop or retain people in general, and especially those who don’t “look like” them. They’ve rarely received training in competency-based assessment to interview and evaluate any candidate objectively. The issue is exacerbated with diverse candidates, as hiring managers often have unconscious biases and hire and promote in their own image. Well-intentioned leaders are not being held accountable for learning and practicing effective talent management — a critical leadership competency.

“There are no diverse candidates out there” is the common refrain of hiring managers —and not just in Silicon Valley, but across sectors and geographies. When I headed Diversity Recruiting at one of the top global executive search firms, we built a database of tens of thousands of diverse candidates with tremendous competencies. In short, the claim that there is a lack of candidates is false. While there might not be an abundance, the issue is a lack of hiring managers with the skills and commitment to actively recruit and develop these candidates.

The Solution

If leaders genuinely want sustainable improvement in diversity, they need to adopt a mindset of accountability and inclusion, and implement a comprehensive strategy to embed the right behaviors and processes.

Such an approach requires strong, enduring commitment from the top; an organization’s senior-most leader must do more than provide lip service. He or she must insist on diverse pipelines and slates of talent and measure the outcomes of those recruitment efforts. There must be consequences, such as financial demerits or deductions, when objectives (not quotas) are not met. For organizations that are fully committed to increasing the diversity of their workforce, here’s a step-by-step guide:

  1. Convey to hiring managers that they’ll be held accountable for hiring and retention outcomes for all talent, especially women and people of color.
  2. Develop a pipeline of qualified, diverse candidates for current and future job openings, and introduce them to hiring managers to build relationships for possible future hire, and to dispel the myth that “diverse talent just isn’t out there.”
  3. Revisit or create a new protocol to manage “passive candidates” (people not actively looking for a new job) identified through the pipeline above. Don’t rely exclusively on the pool of “active” applicants (jobseekers), or the Applicant Tracking System (ATS).
  4. Provide hiring managers with targeted coaching and training to ensure they have the skills to evaluate talent objectively – based on competencies rather than just experience.
  5. Provide onboarding and career management support to diverse hires, so they can develop and advocate for themselves in support of their career pathways within the organization.

For example, I was once retained by a large insurance company to recruit a senior executive. I identified an African-American man working in London for a U.S. financial services organization. He had formerly been an investment banker and a management consultant at top-shelf companies. He had an impeccable educational pedigree. While he lacked insurance experience, the skills and competencies he had developed by working in other financial services organizations were relevant, though they didn’t exactly match the job specifications. The company was so impressed with his accomplishments, competencies, raw intellect and professional style that they created an in-house consulting role for him until the right position within the organization opened up six months later. He stayed with the company for eight years, moving up in the ranks.

At a top-10 retailer, leaders were considering several candidates for promotion to the next level of management. An Hispanic man was eliminated from consideration because his manager, a Caucasian male, believed he lacked the confidence and authority to lead. When the manager was questioned about this evaluation, he revealed that he based his conclusion on the candidate’s behavior during the evaluation itself. The head of diversity proceeded to explain to the manager that the candidate had in fact demonstrated leadership among his peers and subordinates. However, because of his cultural background, the candidate believed it would be inappropriate and boastful to communicate this competency to superiors. With this understanding of cultural differences, the hiring manager reconsidered and promoted the employee, who has thrived in his new, elevated role.

While these examples illustrate the impact of sporadic and/or partial interventions, real improvement requires establishing a comprehensive approach to identify, recruit, onboard and develop quality diverse talent. This involves setting new expectations on hiring managers to improve long-term diversity outcomes and providing them with the critical tools and support to succeed in hiring and promoting diverse talent over time.

Near-term placement data can be misleading. Instead, leaders should focus on long-term outcomes: retention and promotion data at Year 2 and beyond — and that’s not all. If the leadership team fully accepts that diversity helps drives business growth — that diversity is a “need to have,” not just “a nice to have” — then progress should be measured in part by looking at the causal and correlated impact of improved diversity in Years 3 and beyond on business outcomes such as revenue and profitability, and contributing factors such as productivity, innovation and customer-centricity.  

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