4 Steps to Improve Percentage of Diverse Employees in Leadership Positions - Senior Executive

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4 Steps to Improve Percentage of Diverse Employees in Leadership Positions

The steps companies can take to improve the diversity of their leadership.

by Dawit Habtemariam on May 14, 2022

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  • Break down workforce demographic data to find gaps and where the barriers are

  • Establish leadership training, upskilling content and other development programs to support talented diverse employees

  • Appoint diverse employees to interview panels and give them hiring authority

Organizations need to rethink their approach to diversifying leadership. Among boards of directors of publicly traded companies, only 2.7% were Hispanic, 6.2% were Black and 5% were Asian or Pacific, according to executive data firm Equilar. Among all U.S. companies, about 37% and 39% of C-suite executives and senior vice presidents are not White men, respectively, according to McKinsey’s 2021 Women in the Workplace report.

“Many public and private companies are facing what has been a systemic issue across the board and corporate executive leadership, which is low numbers of people of color, low numbers of people from the LGBTQ-plus population, lower numbers of women,” says Amy Hull, director and head of DE&I at Paycor, which provides human resources software. “Essentially, marginalized communities are in lower numbers at the top level.”

As demand for talent at higher levels intensifies, companies will need to do more to elevate their existing diverse talent. “Because there is a high demand for the talent pipeline to increase at the top, it means that many businesses and executive level teams should be including the expansion and investment into their existing talent,” says Hull.

To get to those leadership positions, however, diverse talent has to be successfully retained by the company. This means companies must seriously commit to diversifying their leadership. Honestly, I think people think of diversity leadership in the same ways that they’re thinking about disabilities, and that we need to make concessions, we need to make accommodations,” says Myra Briggs, managing director of Audeliss, an executive search firm for diverse talent.

Here are four steps you can take:

1. Scrutinize your workforce demographic data at various leadership levels.

Determine where diversity is most lacking in your company – among your management team, among senior leaders, in the C-suite and/or among your board of directors. Credit-card company Discover, for example, found there was not enough diverse representation at its higher management levels after scrutinizing its workforce demographic data.

“When we looked at all of our levels and we segmented it out by group— all of our directors, all of our officers, people managers, and so forth— it gives you clear visibility into where there might be something broken, wrong, right, where our representation started to clip off,” says Jonita Wilson, Discover’s chief diversity officer. “By doing that, then it gave us the chance to see where we had some of the biggest gaps.”

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2. Establish a growth path for existing employees from diverse backgrounds

Very often these needs can be met through a variety of development programs, according to says Vaishali Shah, VP of Workforce  Diversity and Inclusion at international HR consulting firm Randstad Sourceright. “Look at their progress, look at where they’re falling short in their development. What type of education, learning, coaching, mentoring do they need, and really tailor outreach and initiatives to that population,” she says.

Companies can uplift their diverse employees. “As part of Advancing Women in Tech, we focus on mid-career, because if you’re giving them the proper support, and you’re giving them the proper upskilling content, well, you know, what they might become the next generation of senior woman talent that you’re looking for,” says Nancy Wang, founder and CEO of Advancing Women in Tech, a non-profit which provided skill-based training, mentorship, and advocacy for women in tech.

At Discover, to achieve the company’s goal of increasing representation of women and people of color at all management levels to 50% and 40%, respectively, by 2025, Wilson has been building a pipeline of diverse talent that starts from within. “We’re being intentional about how we are developing that pipeline,” says Wilson. The company has been investing in leadership development and training programs as well as actively promoting and recruiting people of color and women. The results thus far: In 2021, among corporate officers (EVP, SVP, and VP), 36% were women and 30% were people of color – up from 29% and 26% in 2018, according to Discover’s Diversity, Equity and Inclusion Report.

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3. Expand your recruitment pipelines

Many people find jobs through their professional and social networks. “Most companies build their talent acquisition off of talent referrals, which works because you have quality people working in your company who know other quality people,” says Hull. “[It’s] a very easy and fast way to get people in seats, especially for a growing company.”

This often leads to individuals hiring individuals who are similar to themselves. “If you’re relying on existing networks to staff your open executive roles, then it’s not going to be a surprise when the folks that you’re getting in the candidate pool resemble each other,” says Nancy Wang, founder and CEO of Advancing Women in Tech, a non-profit which provided skill-based training, mentorship, and advocacy for women in tech.

“One of the things that we have decided to do as a company is focus on diversifying at particular levels to start and using some external help from diverse sourcing sites,” says Hull. Paycor parnters with Circa Works, which scrapes jobs off company websites and posts them on multiple jobs sites that target minority and underrepresented populations. Other example sites  the include Gaingels LGBTQIA+/Allies jobs board and Inhersight, which helps women find jobs in female-friendly companies.

Heads-up: Casting a wider net and being more deliberate in your hiring practices is likely to extend the traditional hiring timeline.  “Usually, executive searches take upwards of 18 months to find the right role, interview, and get to know the executive team,” says Wang. Be ready for your diverse executive searches to extend for a longer period.

4. Give diverse employees authority in hiring decisions.

Interview panels often can be biased or not prioritize diversity goals in their hiring decisions.

Walgreens Boots Alliance, for example, concluded that diversity (or the lack thereof) among its interview panels was a weakness.

As part of its efforts to increase the number of women in leadership positions, Walgreens Boots Alliance appointed diverse employees to its interview panels in early 2020. ”I found myself as an African American male sitting on a lot of interview panels, so that we can diversify that slate, and it wasn’t just performative,” says senior vice president and global chief diversity, equity and inclusion officer Carlos Cubia. “These individuals had to have decision-making authority to advance that candidate or to not advance that candidate.”

Diversifying interview panels has helped Walgreen Boots Alliance increase its women in leadership by 2 percentage points, according to Cubia.

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