Socio-economic diversity in executive search: unlocking business potential
In the ever-evolving landscape of business leadership, a new dimension of diversity is gaining prominence: socio-economic diversity. This shift, while still nascent in the executive search community, is beginning to reshape how organisations approach talent acquisition and leadership development.
The demand for socio-economically diverse candidates in executive roles is not just a matter of ticking a box in diversity quotas; it represents a strategic move towards a more innovative, resilient, and dynamic business environment. Research by McKinsey underlines this, indicating that organisations with greater socio-economic diversity representation are more likely to outperform their less diverse counterparts in terms of innovation and financial performance. These findings are echoed by a Thomson Reuters Regulatory Intelligence study, referenced here by Oliver Wyman, which points out that the Bank of England and regulatory authorities all link greater socio-economic diversity to improved decision-making and long-term risk mitigation.
Challenges and opportunities in executive search
Julia Fearn, Partner within the financial services practice at Warren Partners, acknowledges the challenges and opportunities in this area: “Focusing on socio-economic diversity is a relatively new initiative for the executive search community. To an extent, we are still educating ourselves; and are fortunate to have established a strategic partnership with Progress Together to guide us on this journey. Those from this background are not hugely visible but, by asking the right questions of candidates, we can ensure we are championing and supporting social mobility.”
Fearn reveals that Warren Partners currently gathers data from candidates in processes using the Social Mobility Commission’s one key question to define social economic diversity: ‘What was the occupation of your main household earner when you were about aged 14?’
In other words, Warren Partners’ approach to enhancing socio-economic diversity begins with understanding and identifying candidates’ backgrounds. Fearn also notes the receptiveness of candidates to such inquiries: “What’s encouraging is that generally people are increasingly prepared to share this kind of information about their individual circumstance. They see the importance and the purpose behind the question.” This openness is pivotal in identifying and nurturing talent from diverse socio-economic backgrounds.
Warren Partners’ ambition in this area is helped by its long-standing strong regional networks, with access to a high proportion of individuals from lower economic groups. The most successful approach, says Fearn is to use a mix of traditional and non-traditional recruitment channels, from professional networks to community-based organisations. Fearn points to collaborations with organisations such as the Aleto Foundation and Smart Works which have helped them to drive engagement with underrepresented groups.
Real-world impact and client demands
The absence of socio-economic diversity in leadership can lead to decisions that fail to consider the realities of a less privileged workforce. For example, Fearn highlights a financial institution, whose Board made the decision around a pandemic-influenced staff bonus payment which unwittingly caused some members of staff to see their family credit allowance cut by the government. It’s an example that shows the need for leaders who can empathise and connect with social- economic diverse employee bases.
However, there are many success stories from the world of executive search too. Fearn is aware of a leading higher education institution that wanted to appoint a younger non-graduate Non-Executive Director to its Board to gain a better understanding of the perspective of those individuals choosing a vocational route in the job market rather than via university.
Elsewhere, a national workplace pensions provider looking to appoint a new CEO wanted evidence as part of the tender process that Warren Partners could identify and access candidates from lower social-economic background. Says Fearn: “It was especially important to the Board, as their members are typically from a lower to mid income background and see the importance of this being reflected in their senior management team”.
Warren Partners’ initiatives in promoting diversity
The firm’s commitment to diversity is not limited to external searches. Internally, Warren Partners fosters an inclusive culture where diverse voices are heard and valued. This involves continuous learning and development programs to educate and sensitise its team on the nuances and importance of socio-economic diversity.
As the corporate world increasingly recognises the value of diverse leadership, the role of executive search firms becomes crucial. By actively seeking out and advocating for candidates from diverse socio-economic backgrounds, these firms play a pivotal role in shaping the leadership landscape of tomorrow.
Because the integration of socio-economic diversity into executive search is more than a trend; it’s a necessary evolution in the pursuit of equitable and effective leadership. Through dedicated efforts and strategic collaborations forward-thinking search firms can lead the charge in this vital aspect of diversity, inclusion and, crucially, business growth.