Changing the Talent Pipeline to Improve Diversity

16 February 2018

There is a growing body of research telling us that more diverse boards and leadership teams lead to more profitable business. When interviewing candidates either for board roles or senior leadership positions, diversity in thinking and a commitment to a sustainable business practice now features more prominently in discussions.

So, how committed are we to these in New Zealand and can we make a shift?

In an ideal world, the answer is simple, just be more open in your recruitment for such roles. Realistically though there’s more that needs to be considered. In reviewing the composition of boards and executive teams in New Zealand, there appears to be a gradual trend towards more diversity from a gender perspective; particularly in publicly listed companies and public sector organisations, which have seen a mere 1% yearly increase over the last ten years. Some of the SMEs who have boards still tend to be strongly one-dimensional and very finance or risk-focused, as their first or only board member is often their Accountant or Lawyer, generally resulting in the CEO being driven by a primarily one-dimensional measure - the bottom line. But that’s not enough anymore and this can, in fact, inhibit a company’s performance and attractiveness to talent.

It is an interesting exercise to review boards across the marketplace and while there is a growing number of female appointments, most boards are comprised of European, middle-aged men who have been CEOs or have finance or legal backgrounds, or as one young, female graduate commented: “male, pale and stale.” While this may seem a bit harsh, it is a view held by many. Attitudes must also be mentioned as an issue impeding diversity; there is tension in the market around what some feel is happening, particularly in relation to female appointments. In completing a search for a non-executive Director recently we came up against comments like: “Why are you calling me and not appointing a token female?” So, there is an element of frustration from all parties.

Given both millennials and women should be represented in the talent pool that boards and senior leadership teams reach into when they need to fill a role, it seems only natural that boosting the quality coming through the talent pipeline, will go some way towards paving the way for more diversity in boards and leadership teams.

Encouraging more young women to step into male-dominated disciplines such as IT, Engineering, Finance and Accounting and allowing the flexibility some millennials crave for in their working lives, are just two back-to-basics steps that could be taken to boost the quality of talent in the pipeline. More training/development for millennials coming up through the ranks or perhaps better preparation of senior talent sitting in the pool are options also. These avenues will take time and money, but a company always also has the option to ‘step up’ and be more flexible or open to different options when sourcing for board and/or leadership roles. Many companies have diversity ‘targets’ in place and we are often asked to provide the numbers of female candidates considered for a role, but I feel this is often still a ‘tick the box’ exercise.

Two factors need to be considered if we are to make a real impact particularly in the diversity space: millennials and an openness to considering the way they expect to work, so they remain in the pipeline; along with women and their shift in focus, between home and work, at different life stages. We lose much talent in the 30-40 year decade, when home life is busy and demanding.

Prime Minister Jacinda Ardern’s pregnancy is an interesting one to consider here. Her announcement has caused much debate among different parts of the workforce on how they would feel if they appointed someone and hadn’t been told that this person was ‘expecting’ in the not-too- distant future. Half commented that it shouldn’t make a difference and the other half wanted to know, so they could plan for the future. No one said they would not go ahead and appoint, but in the real world, bias does exist and very few have a husband, willing or able to stay at home. Regardless of what may or may not happen in Jacinda’s world, there’s no denying that the attitude of a new mother often shifts once they have had a baby, to the point that many don’t have the same interest in climbing the corporate ladder, at least for a period of time, taking them out of the marketplace a time when their peers are making some of their biggest career moves and also depleting the talent pool for boards and senior leadership teams. The same can be said for millennials and their penchant for packing up and travelling for months at a time, having a more flexible attitude towards re-entering the workforce and the opportunities that may or may not be available when they return.

Diversity is a complex issue and changing and developing the talent pool that feeds into leadership roles is essential, while a courageousness to make appointments that perhaps open the door for a different perspective is the place to try and start effecting change. Observers of the marketplace and those within it are impatient for change, but quick fixes won’t alleviate what is a long-term situation requiring a change in thinking from those who have perpetuated the situation and often don’t see a problem.

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