Whenever I talk about diversity and inclusion it doesn’t take long for someone to say “But we only want the best person for the job don’t we?” This is often the opening salvo on a discussion that ends up saying we should pay no attention to gender or race and we should carry on with recruitment and selection in largely the same way as we always have.
It’s not a wholly unreasonable thing to say – surely we all want the best people in roles, but it is flawed on two levels.
The first one is the fantasy that we ever, actually hire the best person for the job. It just isn’t true, What we actually do is more something like this :
We hire the person that most closely fits the image of what we think we want, given the amount of time we have to spend looking, the amount of resources we have to spend on the search, limited by our ability to test for the skills we think we need and limited by the set of people who will be attracted to work for us given our reputation and job advert.
Just read that a couple of times. It’s full of caveats. And it is far, far away from this holy grail we have our heads of “the best person for the job“. The difficulty and compromise inherent in recruitment is the reason so many new recruits fail. Multiple studies put the failure rate for new management, professional or executive hires at c. 50% over 18 months.
Most recruitment processes are heavily compromised by time, resources and urgency
Recruitment very often starts out late. Either someone resigned unexpectedly or it took a while to get the budget for a new role approved. Either way, by the time you start looking, there is often already a manager who is desperate to fill the post.
No manager recklessly fills a post with someone underqualified – that just stores up problems for the future – but there is a tension between how long the search takes and the urgency to get someone in the post. It’s a tension that most often leads us to hire “good enough” which is something I want to simply be more honest about. When we accept that we often hire “good enough” it puts quite a different spin on building diversity into our companies.
Very often managers end up hiring the best of the four, five or six people that they interviewed. This handful of interviewees was selected from the tens or hundreds that responded to our job advert.
Which is very different from this absolute that we think of the best person we can find for the job – which is a much purer measure, but one of fantasy.
How many times do we go back to the market, re-run the advert – tweaked or optimised, or look in new areas, just to be absolutely certain we’ve seen everyone possible? Not many. Quite often we’re just in too much of a rush or have too few resources so we settle for “this candidate is the best I’ve seen and I think (hope) they’ll be great”.
And it’s not easy to even know, never mind assess, what “best” is.
An even bigger problem is that for very many jobs, it’s impossible to be truly objective and even know what “best” is. The more senior the position is, often the harder this is.
Worrying that a diversity strategy will make us hire something other than the best person we can find assumes that people can all be ranked on a simple, linear scoring system – Candidate A scores 76% and Candidate B scores 72% but because Candidate B improves the diversity of our team we’re going to choose Candidate B. People hate this because they think the organisation is dumbing down in favour of diversity. But this is never the real case.
Whenever you’re evaluating candidates, assuming that they all have the basic skills and experience to do the job, you end up comparing apples and oranges. There will be attributes of each candidate that are different, they will each have perceived strengths and weaknesses and they will each make you feel differently towards them in terms of risk -based on the past experiences of the person doing the recruiting.
And that’s where our own natural unconscious bias comes in.
When faced with a set of candidates that each have the basic skills and experience to do the role we naturally end up hiring the one that makes us feel more comfortable, more confident. We hire the one that is most like the person we imagined for the role – maybe based on a person we saw do the role successfully in the past.
Our brain defaults to what it thinks, incorrectly, is safety. This default impedes the creation of diverse teams. Without conscious consideration, we are less likely to choose the candidate who looks, sounds and feels different to what we’ve seen before, even when we’ve assessed that they can do the job.
This is important because when we’re hiring, we’re actually hiring for two things – task and team. But we very often forget about the latter.
Bringing someone into your company fulfills two needs.
- Firstly, you’re hiring for the role – you want someone who can do the job effectively and hopefully grow and develop in it.
- But secondly, you’re also hiring for the team – the team they will be in and the wider company team. You want someone who can add something new to that team, new perspective, new opinion, new thinking. And you get that by hiring people who have had different backgrounds, who have lived their life through a different context, a different struggle.
We’re all molded by our experience and background and when we build teams of people from diverse backgrounds we build stronger teams who can see more
And that’s something that too often we ignore – we become myopic on the idea of the role, like people exist in isolation. But they do not. It’s not individual people that build great companies, it is great teams that build great companies.
Diverse teams perform better than non-diverse teams. That’s why we can’t reduce recruitment to task and ignore team.
Extensive data shows us that diverse teams perform better than homogenous teams. This blows away that idea that you should ignore diversity and focus on getting the best individual into each role.
McKinsey have been examining diversity in the workplace for several years. In 2014 their Diversity Matters project studied financial data for 366 public companies across Canada, Latin America, UK and USA. This robust, multi year project had clear findings :
- Companies in the top quartile for racial and ethnic diversity are 35 per cent more likely to have financial returns above their respective national industry medians.
- In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 per cent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.
- In the United Kingdom, greater gender diversity on the senior-executive team corresponded to the highest performance uplift in our data set: for every 10 percent increase in gender diversity, EBIT rose by 3.5 per cent.
In 2017, McKinsey updated the report with the findings from a further three years. With more companies analysed, the bigger dataset was more dependable and confirmed or increased the 2014 findings. In particular:
- In the original 2014 research, McKinsey found that companies in the top quartile for gender diversity on their executive teams were 15 percent more likely to experience above-average profitability than companies in the fourth quartile. In the larger 2017 dataset this number rose to 21 percent.
- For ethnic and cultural diversity, the 2014 finding was a 35 percent likelihood of outperformance, comparable to the 2017 finding of a 33 percent likelihood of outperformance on EBIT margin
It’s not just McKinsey that found this either. In 2012, a report by the Credit Suisse Research Institute found that large-cap companies with at least one woman on the board outperformed their peer group with no women on the-board by 26% over the preceeding six years.
The reasons why diverse teams outperform homogenous teams are known.
In recent years a body of research has revealed why nonhomogenous teams are smarter. Working with people who are different from you challenges your brain to overcome its stale ways of thinking and sharpen its performance. Writing in the Harvard Business Review in 2016, David Rock and Heidi Grant found the following :
Diverse teams focus more on facts
People from diverse backgrounds actually alter the behaviour of a group’s social majority in ways that lead to improved and more accurate group thinking.
In a series of experiments conducted in Texas and Singapore, scientists put financially literate people in simulated markets and asked them to price stocks.
The participants were placed in either ethnically diverse or homogenous teams. Researchers found that people who were part of the diverse teams were 58% more likely to price stocks correctly, whereas those in homogenous groups were more prone to pricing errors.
Diverse teams process facts more carefully
Greater diversity also changes the way that entire teams digest information needed to make the best decisions.
In a 2008 study sorority or fraternity members divided into four-member groups, each of which had to read interviews conducted by a detective investigating a murder.
Three people in every group, referred to as “oldtimers”, came from the same sorority or fraternity, whereas the fourth, the so-called “newcomer,” was either a member of the same sorority or fraternity or a different one.
The three oldtimers in each group gathered to decide who was the most likely murder suspect. Five minutes into their discussion, the newcomer joined the deliberation and expressed their opinion as to who the suspect was.
Groups with out-of-group newcomers felt less confident about the accuracy of their joint decisions but were more likely to guess who the correct suspect was. Conversely, the homogenous groups with members all from the same sorority were more confident in their decision making but were more often wrong.
The scientists behind the study believe that diverse teams outperform homogenous ones in decision making because they process information more carefully.
Diverse teams are more innovative
Without question, it is easier and more comforting to work with like-minded people who have a shared context, shared experience and shared background. But this comfort creates a sense of safety where innovation dies. Hiring individuals who do not look, talk or think like you can allow you to dodge the pitfall of conformity, which discourages innovative thinking.
A 2011 study of gender diversity in research and development teams from 4,277 companies in Spain found that companies with more women were more likely to introduce radical new innovations into the market over a two-year period.
A 2015 study, pooled data on 7,615 firms that participated in the London Annual Business Survey. This questionnaire asks executives a number of questions about their companies’ performance. The results revealed that businesses run by culturally diverse leadership teams were more likely to develop new products than those with homogenous leadership.
So what do we need to do?
Recruitment is the lifeblood of our businesses and our cultures but too often it is seen as just a cost centre. We need to invest heavily in recruitment teams so that they can do bigger and deeper searches producing pools of suitably qualified and experienced talent for us to choose from, rather than ending a process with just one plausible candidate.
Then when faced with those pools of people – all of whom we believe can do the job we need to resist the natural urge to pretend one candidate has the edge over another just because they look like what we’ve seen before.
Instead, we need to accept that when it gets to the margins we can only guess, not tell, which candidate might have the edge on the others and we need to accept that they are actually equal players. Then we need to look to the composition of our teams and ask ourselves – which of these equally qualified candidates will add diversity, new perspective, new challenge and new colour to my team.
- Why diverse teams are smarter – David Rock & Heidi Grant in Harvard Business Review, November 2016
- Diverse teams feel less comfortable and that’s why they perform better – David Rock, Heidi Grant and Jacqui Grey in Harvard Business Review, September 2016
- Credit Suisse Research Institute July, 2012