The Business Case for Diverse Bench Strength

Companies with the highest proportion of women on executive committees achieve ROEs 47 percent higher than companies with no women at the executive level.

Companies where Millennials fill 30 percent or more of the leadership positions are 2.3 times more likely to be in the top 20 percent of financial performers. More Millennials in leadership roles also correlates to increased innovation and growth.

These numbers make a strong business case for diverse leadership. But progress toward increased diversity at the leadership level has been slow. Current leadership pipelines are producing white male leaders nearly seven out of 10 times.

As a result, women represent 47 percent of the U.S. workforce but hold only 22 percent of senior vice president positions. In the C-suite, only one in five leaders is a woman; one in 25 is a woman of color.

In the U.S., while African Americans represent 10 percent of college graduates, they hold only four percent of senior executive positions. Similarly, Hispanics and Latinos, who make up eight percent of college graduates, hold four percent of senior-level positions.

How to turn the tide

While current diversity initiatives aren’t driving significant changes in leadership ranks, companies can shift the tide with a few process adjustments. For example, if companies start filling manager positions equally between men and women, 48 percent of managers would be women within ten years.

Accelerating leadership diversity and deepening bench strength doesn’t require most companies to re-engineer their recruiting and talent management processes. Rather, success comes from a holistic, integrated approach that leverages evidence-based tools, some of which may already be in use.

Whether it’s identifying emerging leaders for development or ensuring existing senior managers are in a position to succeed as leaders, objective tools remove the belief-based practices that are part of many corporate processes. Recruiters, HR leaders, and managers gain assessments and tools that increase accuracy, predictability, and scalability.

In my practice, I help clients incorporate strategic, objective tools into their current processes to neutralize unconscious bias, tackle leadership bench challenges, and accelerate the impact of diversity on their business. Contact me to talk about how the right tools can help your company build a more diverse leadership bench, and click here to request my white paper, Where are Tomorrow’s Business Leaders?