Why it Pays to Have a Diverse Workforce

For many employers, cultural fit is the fallback determinant when hiring from a pool of equally qualified candidates – but as businesses start to see the tangible return on diversity in the workplace, they’re beginning to reconsider their approach.

Why it Pays to Have a Diverse Workforce

For many employers, cultural fit is the fallback determinant when hiring from a pool of equally qualified candidates – but as businesses start to see the tangible return on diversity in the workplace, they’re beginning to reconsider their approach.

When faced with tough hiring choices, HR managers typically default to evaluating a candidate’s “fit” within the company’s culture to determine who ultimately receives the offer. Yet, studies show that prioritising familiar personas can inadvertently lead to a shortage of more than just racial and cultural diversity – intellectual diversity suffers as well.

Prioritising Persona

As employers have increasingly been focussing on developing and broadcasting strong brand identities, they’ve also placed an emphasis on cultural fit when sorting through potential new employees. On the surface, it seems like a reasonable proxy for assessing both commitment to the company and specialisation of soft skills.

Katie Bouton, a leading organisational development specialist writing for Harvard Business Review (HBR), explains that cultural fit hiring is is based upon the notion that this person “will reflect and/or be able to adapt to the core beliefs, attitudes and behaviors that make up your organisation.”

The persona is the hypothetical answer to the problem. International brand strategist Universum defines it as a “fictional representation of your ideal hire for a specific role,” the sort of person you can be happily stranded in an airport with. Some analysts assert that there are benefits to this kind of hiring – a recent study found that employees who “fit” well with their coworkers had significantly higher job satisfaction and long-term loyalty to their respective employers.

The Cons of Cultural Fit

Yet many others argue that this kind of hiring has serious drawbacks. In a seminal report, Lauren Rivera, a professor at Northwestern University, found a troubling tendency toward cultural uniformity:

Although HR managers emphasized that achieving gender and racial heterogeneity were recruiting priorities, and elite professional service firms devote significant resources to increasing the demographic diversity of applicant pools… Firms sought surface-level (i.e., demographic) diversity in applicant pools but deep-level (i.e., cultural) homogeneity in new hires.

She found that well-qualified candidates were rejected for seemingly trivial or irrelevant qualities. One firm in her study rejected a potential hire for being “too intellectual,” despite performing well on a test case. Another firm chose a pair of candidates based on their mutual interests in recreational sports: “With his lacrosse and her squash, they’d really get along… on the trading floor.”

Hiring managers confirm her findings anecdotally. “We are not inclined to hire those with a diversity of thought, or a greatly different level of curiosity than we ourselves have,” says Paul Rubenstein, a talent leader at Aon Hewitt. “Companies struggle, for example, with moving toward a growth culture. Yet, they hire in the same image as their current culture.”

The Value of Variety

In light of these findings, employers are becoming increasingly aware of the potential loss of talent and more open to pursuing intellectual as well as demographic diversity. In a 2015 survey conducted by the Korn Ferry Institute, 62% of respondents complained that their organisation lacked in cultural and intellectual diversity.

In 2014, HBR published an in-depth analysis of the determining factors of “collective genius.” Instead of imagined personas, they turned to successful tech companies to find innovative procedures – most notably among them, Google.

“You want an organisation that argues with you,” said Bill Coughran, senior VP of Engineering from 2003 to 2011. This kind of conflict, what HBR’s researchers termed creative abrasion, was far more effective at generating new ideas.

“Innovation,” they write, “usually emerges when diverse people collaborate to generate a wide-ranging portfolio of ideas, which they then refine and even evolve into new ideas through give-and-take and often-heated debates. Thus, collaboration should involve passionate disagreement.”

Of course, this entails more than just expanding the hiring pool. Finding a good fit without succumbing to unconscious biases is tricky. The change has to start with the initial screening processes, including resume selection and interviews.

While some firms have committed to name-blind and even university-blind applications to weed out demographic biases, other companies have turned to data-driven solutions like video recruitment software to mitigate discriminatory practices or inappropriate questions.

By presetting interview questions as a team, employers can simultaneously streamline the process, and make it more objective by cutting out the individual interviewer’s preferences – so there are more questions about aptitude, and less about whether or not the candidate plays squash. And supporting a gender neutral approach.

Mike Ruddle, Managing Director of Capita's Talent Consulting business puts his finger on the nub of the issue: "The big question to ask is, are we, as HR professionals, up to the challenge of changing our processes to support this requirement?”

​"​It is clear​," Ruddle explains, ”​that if we fail to take heed that we should place diversity and inclusion at the centre of our policies and strategies we are likely to fail in our ambitions. And we haven’t even mentioned the role of technology and big data in supporting collaborative, flexible working practices or personalising talent management."

For even more insight on this subject, read Mike's recent article on LinkedIn Pulse.

(Main image credit: unsplash.co/Pexels)