Over the last 12 months in particular there has been an increase in the number of hiring managers asking questions about the diversity of an executive search shortlist. This has even occurred when the search has been successfully completed and the shortlist of three or four candidates represent an exceptional opportunity for hiring organisation.
It’s not surprising that this is happening. With an increased level of corporate social responsibility towards diversity, it’s the kind of thing that now just appears on job briefs and checklists routinely. If it doesn’t, arguably it should be included by the search consultant.
Almost 2 years ago McKinsey and Co produce research that identified companies with high levels of diversity often outperformed their competitors. AESC recently quoted McKinsey:
“McKinsey’s research showed that companies with ethnically diverse leadership are 33% more likely to outperform on profitability and 21% more likely to have above-average profitability with gender diverse leadership teams.
BCG and the Technical University of Munich found a direct correlation between innovation, diversity in leadership teams and profitability of new product releases. They discovered that four types of diversity—industry background, country of origin, career path, and gender—positively correlate with innovation. “
McKinsey, ‘Delivering Through Diversity’ 2018.
For us, the four types of diversity identified do not appear to be new items.
Industry Background: While it may be important for executive search consultants to identify candidates with relevant industry background, quite often this involves moving a hiring manager away from a perception that this means the same industry.
Country of Origin: At an executive level, any country of origin considerations tend to be based on where one is likely to find the best talent given the international mobility of senior executives. Domestically within Australia the only consideration around country of origin should be the legal rights of the candidate to work here permanently. Even then, we have seen cases of clients accepting candidates on contract who have only medium term residency entitlements.
Career Path: Career path cuts to the heart of experience and simply has to be relevant to the employer’s challenge.
Gender: Despite ongoing public debate about remuneration equality, we are not aware of search firms who would pass over a candidate of one gender in favour of another. Search consultants can help clients overcome any unconscious bias by “blinding” any reference to gender or ethnicity within a CV and supporting documents. However, for many, it seems that firm policies around broader issues of gender diversity and even disability, are still in the early stages.
Overriding all of this is a general principle that a good executive search consultant needs to be aware of the environment that they are seeking to place candidates into.
Organisations considering change through the development of superior diversity practices may wish to consider applying our Change Success Diagnostic, which can be found here.