September 4 is Global TA Day — “a worldwide day to celebrate the recruiters, hiring managers, staffers, sourcers, employer brand managers” and others involved in the process of bringing the best talent to their organization.
What does “the best talent” look like? A recent report from McKinsey & Co. reports that high performers are 400% more productive than average ones. And that gap widens as jobs become more complex.
Throughout my time in corporate America, I was constantly surprised to see how much management underestimates the critical nature of hiring, developing and retaining the best talent.
That lack of urgency is felt at the highest level of organizations. In fact, “a whopping 82% of Fortune 500 executives don’t believe that their companies recruit highly talented people,” according to McKinsey.
Meanwhile, research from Morgan Stanley connects greater gender diversity of talent with higher stock performance over time:
Another McKinsey study, “Why Diversity Matters,” found that “there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.”
Lack of diversity costs organizations millions — and as a TA professional, you have a real opportunity to fix that problem through diversity hiring.
As every good TA professional knows, the best talent is scarce. It can be intensely difficult to attract and hire the highest performers — and harder still to hire those that bring diversity to the organization. In our nearly zero-unemployment environment, competition for talent has never been more fierce. According to that same McKinsey report, “almost one-third of senior leaders cite finding talent as their most significant managerial challenge.”
So, as we take this time to celebrate and thank TA leaders for their essential contributions to the company, it’s a good time to think about how their work can help make their companies more diverse — and therefore more productive, more innovative and more profitable.
This past June, a Civil Right Attorney named Cyrus Mehri published a piece in Politico that helps us understand why diverse slates are one of the most essential contributors to successful diverse hiring practices.
“A single diverse candidate faces an enormous headwind — and a tiny chance of being picked for the job in the end. In contrast, when interviewers take the time to interview multiple diverse candidates in a fair and competitive process, the dynamic shifts norms and expectations, and creates a situation in which a diverse candidate is much more likely to end up winning the position.”
Mehri continues: “Companies were 79 times more likely to hire a woman and 194 times more likely to hire a person of color when the finalist pool included more than one woman or minority.”
So, as you think about your hiring plans for 2020, remember that thoroughly diverse slates — with more than one token diverse candidate — are table stakes. This may be one of the most competitive markets for talent ever, and the optimal results will only be achieved if you take the extra time and money to build diverse slates. If you can’t assemble diverse slates, you can’t achieve the desired outcome of driving diverse hiring efforts.
Most often, TA professionals are measured on cost-per-hire. That’s a bit like evaluating my husband’s birthday gift to me on how cost-conscious his purchase was — it’s missing the point. As that same husband has been known to say, there are certain things you don’t want to save money on — like sushi. I think it’s time we realized that hiring the best talent fits into that same category. If finding the best talent is really the key driver of exceptional corporate performance, we shouldn’t be trying to spend as little as possible to find it.
Now’s the time to re-think how TA professionals and departments are evaluated. Instead of looking at CPH, we should be looking at how new hires perform against expectations and consider their long-term contributions. Further, in this day and age, every TA department should be incentivized to deliver diverse hires.
Furthermore, we have to remember that when we recruit truly exceptional and diverse talent into key roles, it creates a virtuous cycle. After all, it’s that new talent that will be responsible for hiring and engaging other new hires. In a 2018 study, Accenture showed that on average, in organizations with at least one senior female leader, 23% of women are on the “fast-track” compared to organizations with all male leadership, where only 8% of women are on the fast-track. The implication is that strategically placed female and diverse leaders will help attract other similar high-performing and/or diverse talent — and pave the way to employing stronger performers throughout the organization.
According to research from HireVue, organizations that implement more diverse hiring panels see a 41% increase in the percentage of new hires that are women or minorities. Sadly, the reverse of this finding must also be true. Panels that are predominantly white and male are more likely to hire other candidates that are white and male.
If you, as the TA leader, have made it a priority to drive diversity at your organization, then you must insist that your candidates be interviewed by diverse panels. As reported by Working Mother magazine, diverse panels have two major benefits. First, they demonstrate to candidates that they will have other diverse coworkers to connect with, and second, they show the candidate that they will not be a token, or the first diverse employee that the team has experienced.
The results can be dramatic: At Cisco, diverse interview panels increased the odds of making it through the interview process by 50% for Hispanic women and 70% for African-American women.
Even if you are 100% committed to being a catalyst for diversity in your organization, there is only so much you can do alone as the TA leader. Even if you consistently attract and source a highly-talented, highly-diverse group of candidates for your company, your work won’t matter unless your hiring managers are equally committed to excellence.
For that reason, you must make the case for best-in-class talent acquisition practices — which may often not be the most expedient or the most cost-efficient. Presenting the statistics and findings above are a first good step. But moreover, it’s key to remember that sources estimate the cost to a company of a bad hire at $80,000. In addition, every bad hire is a missed opportunity to enhance the skills and capability of the organization.
Take it from me, because I worked at a newspaper for seven years: The skills that companies require for success have never been changing more rapidly. And job tenure is lower than ever. According to the BLS, the average job tenure for an employee between 25-34 is just 3.2 years.
On this Global TA Day, I invite and encourage you to raise your voice to the organization — and remind them just how essential your job is. You are in a position to make or break the future of the company. In order to have the most success, you need support, cooperation and shared goals — which must focus on hiring the best talent and the most diverse talent.
The good news is that when you are able to successfully find common ground, the results will be extraordinary. You will do good, and you will do better for your company.