Diverse leadership can help you recruit and retain higher-quality talent for your company. Many corporate “About” pages in years past featured mostly White men. But leading companies today are increasingly making diversity in leadership and all company levels a priority. Consider:
- All S&P 500 companies have at least 1 female on the board.
- Of the 432 new independent directors added to S&P 500 boards in 2019, 59% were women or minority men.
Still, in June 2020, White people held 85% of top executive positions. Consider making diversity a focus in your hiring strategy — learn about the benefits and how to make your leadership team more diverse.
What are the benefits of having a diverse team?
There are significant business benefits of diverse leadership teams. Our “People Operations Guide and Checklist for Employee Well-Being” found companies that focus on DEI:
- See a 2.3x higher cash flow per employee
- Are 1.7x more innovative
- Achieve 19% more revenue than less-diverse management teams
What’s driving these business results? Seeing diversity in leadership can make employees feel like they belong. TechRepublic reports employees who feel a strong sense of belonging, compared to a weak one, experience a:
- 56% increase in job performance
- 50% reduction in turnover risk
- 75% decrease in sick days
Plus, employees who feel like they belong are 167% more likely to recommend their employer to others as a positive place to work.
Diversity in leadership can have other benefits. These include a more supportive workplace culture and a variety of perspectives. As we covered in our post on recruiting for diversity in the workplace, diverse teams are 35% more likely to have financial returns. Diversity can lead to increased innovation.
McKinsey and Company’s 2020 report on diversity in executive teams found diversity has become more influential in business results. In 2019, businesses in the top quartile for executive team gender diversity were 25% more likely to achieve above-average profits as opposed to businesses in the lower quartile. That’s up from 21% in 2017 and 15% in 2014.
Today’s candidates are seeking out diversity in workplaces. Glassdoor’s 2020 “Diversity and Inclusion Workplace Survey” found 76% of job seekers and employees report that working in a diverse workforce matters to them. Plus, 32% of people would avoid applying for a job at a company that lacks diversity. In other words, a lack of diversity in leadership puts businesses at risk of losing top talent.
How can you increase diversity in leadership roles?
Creating a diverse workforce starts at the top. You can prioritize hiring executives, directors, managers, and other senior leaders from diverse backgrounds.
Creating a diverse workforce starts at the top. You can prioritize hiring executives, directors, managers, and other senior leaders from diverse backgrounds.
Diversity includes different:
- Genders and gender identities
- Ages
- Abilities and special needs
- Races
- Sexual orientations
- Religious backgrounds and beliefs
- Cultures and nationalities
Some companies will hire a DEI consultant or establish a permanent position dedicated to DEI on their leadership teams. Small businesses, at the very least, can train leaders on how to be inclusive with their teams and promote a DEI-focused culture.
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Prioritize diversity in the hiring process
You can prioritize diversity in the hiring process by ensuring your human resources and interview panel teams include diverse employees. They’re integral to the hiring process and are often the first point of contact for job candidates. You can make a better impression by showcasing diversity during hiring.
Look for diverse talent
Many companies look for employees who will “fit in” with their current company culture. Instead, we recommend looking for talent who can add value to your business.
You can find more diverse talent when you expand your recruiting to be more inclusive of diverse skill sets, education, and experience. You might also open up the candidate search to remote candidates in different states and countries.
Consider also asking your diverse employees for referrals. If your workforce is lacking in diversity, focus on finding candidates outside of referrals to increase the diversity in your candidate pool. You might partner with local colleges and universities or veteran-focused organizations, for example, to source talent. If you’re working with a recruiter, communicate your diversity goals so they can focus on bringing diverse candidates to you.
Also, participate in diversity initiatives in your community. You might attend a women-based technology conference or host a diverse leaders roundtable, for example. Events like these provide you with opportunities to recruit diverse leadership and show your support for diverse professionals.
You might partner with local colleges and universities or veteran-focused organizations, for example, to source talent. If you’re working with a recruiter, communicate your diversity goals so they can focus on bringing diverse candidates to you.
Promote diverse team members
Integrate diversity in your leadership team and your business operations
As we detail in our “Diversity, Equity and Inclusion for HR Leaders” eBook, diversity is increasingly important for today’s workforce — especially among younger generations. Gen Z says the top factor they look for in a future employer is an inclusive workplace.
Diverse leadership can lead to higher profits, more innovation, and a higher cash flow. As you hire leaders at your business, use a DEI strategy to inform your hiring decisions, diversify your workforce, and strengthen the viewpoints at your company.
