Talent Management

Diversity Drives Innovation—And How You Hire Is Step One

Many companies tout a desire to create a diverse work environment, but public proclamations that result in half-hearted efforts are a far cry from true, equitable diversity. To me, this begs the question of intention. Why are companies championing corporate diversity—is it for optics or value signaling, or for the betterment of business innovation?

Lack of diversity goes deeper than optics—it can dull your company’s competitive edge and chip away at your bottom line. A BCG study found a positive correlation between a diverse workforce and revenue attributed to innovation. In its survey of 1,700 companies, those with above average diversity scores produced a greater proportion of revenue from innovation.

It makes total sense. Diverse people with different perspectives, backgrounds and skillsets offer multifaceted problem solving. Diverse spaces foster collaboration and innovation at its finest.

I’ve said it before, and I’ll keep saying it: The data quite clearly shows that when you prioritize diversity and inclusion, your profits, innovation and productivity increase. If you know there is something that will improve the fundamentals of your business, why wouldn’t you do it?

Though diversity is often viewed in the context of HR and not business strategy, it’s really a strategic leadership issue at its core. It should concern your CEO and CFO as much as it does your Chief People Officer. Diversity should be woven into the fabric of your company’s culture and hiring practices, and be reflected top-down from your executive team to entry-level employees. With the Covid-19 pandemic and remote work becoming the new normal, creating a diverse workforce is more attainable than ever before. The opportunity for employees to work from anywhere and manage more flexible hours that are better suited to their schedules opens a wider array of candidates for positions across industries. Companies should embrace this new way of working and be willing to work with their employees on these more flexible work environments to encourage diversity.

So, what are the first steps you can take to create an inclusive environment that drives innovation? It all starts with how and who you hire.

1. Look at who you hired last quarter

 You can’t achieve your overarching diversity goals when you don’t know where you stand. If you feel like your organization isn’t making progress, starting with more targeted, attainable milestones can help get the ball rolling and sustain more forward momentum in the long run.

Analyze all the people you hired in your most recent quarter to start. What was the diversity in that group? What specific minority groups may have been left out? Does it appear that some departments are struggling with gender or racial diversity more than others? These questions will give you insight into where your pain points lie and how you can take action to tackle them.

2. Make your job descriptions inclusive

Language matters and a job offering’s wording can unintentionally foster exclusivity. For example, seeking a “digital native” might discourage candidates over a certain age to apply. Referring to developers as “hackers,” a traditionally male-coded word, can turn off other applicants.  Job descriptions can also highlight inclusive benefits such as ERGs, flexible work arrangements, mentorship programs for underrepresented groups, etc. 

Though it may seem small, these efforts help reaffirm your organization’s commitment to building an inclusive workplace and encourage a full range of talented applicants to apply for open positions.

3. Anonymize incoming resumes

People, unfortunately, often carry unconscious biases based on race, gender, geography, educational background, and more. Anonymizing candidates’ applications as much as possible can help eliminate these biases in the hiring process.

A study done on applications for time on the Hubble Space Telescope found that removing indications of gender (such as first name) from an application resulted in women being hired at a higher rate than when their gender was obvious.

There’s plenty of software on the market your company can invest in to anonymize effectively. Additionally, screening tests and job simulations that gauge candidates’ skillsets can also help offset factors like educational-background bias. 

4. Ensure there are 2+ diverse candidates on your shortlist

A Harvard Business Review study found that the chances of a minority candidate being selected for a job significantly decreases if they are the only one in the pool of candidates. This is because recruiters often subconsciously view straying from the “norm” as risky, and therefore end up choosing a candidate from the majority group. The “two in the pool” method helps prevent a qualified candidate from being tokenized as “the diversity candidate.”

Key Takeaways

Besides being the right thing to do, building a diverse team drives innovation and boosts revenue. Creating an inclusive work environment requires effort, training, and the willingness to listen and constantly improve. But for organizations ready to put in the effort, the ROI is proven and invaluable.


Christa Quarles

Christa Quarles is CEO of Alludo (formerly Corel) and the former CEO of OpenTable.

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Christa Quarles

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