This year, Salveson Stetson Group celebrates 25 years in business. As we reach this milestone, I reflect on the changes our business has witnessed over the past quarter-century.
Thanks to Sally Stetson and John Salveson, I began my executive search career in 1998. For the most part, executive search was still an analog industry. The internet was in its infancy as a business and personal communication tool, less than half of adults in the U.S. were signing on, and Tom Hanks and Meg Ryan were only just introducing us to the ups and downs of email. As an aside, Hanks’ character in that movie is an absolutely horrible human being. You could have done do so much better, Meg!
This piece could center on how technology has changed the way we interact with stakeholders in our business. How it has both brought us closer together and distanced us at the same time; how it has made people easier to find, but sometimes harder to engage; how it has relentlessly increased the pressure for speed in our process. Instead, I’d like to talk about something with a more fundamental impact to our business and all business, and one that has in some ways changed dramatically and in others is disappointingly the same: diversity.
So, what’s the same?
In 2000, over 96% of Fortune 500 CEOs were white men. According to a study by Richard L. Zweigenhaft of Guilford College, that percentage has changed little in 20 years, with more than 85% of those positions still held by white men in 2020. Some incremental progress is found in these numbers, but even the increases are starkly divided, with white women and South Asians making up most of the overall gains and African American and Latinx participation decreasing over the same period. These stats are a sobering reminder of how far business has to go toward improving diversity practices.
The executive search industry has been complicit in much of this stagnation. I found this to be particularly true during the first half of my tenure in the industry when “diversity” was considered simply a “nice to have.” I frequently heard fallacious proclamations from clients like, “I don’t want to give up candidate quality,” which often went unchallenged.
Given the outsized role that executive search plays in the selection of senior leaders, the industry missed an opportunity to be more influential in promoting diversity. Of course, it doesn’t help that the racial and ethnic demographics within executive search mirror the deficiencies of the Fortune 500. As an industry, we could and should have done better earlier.
But it’s not too late.
So, what’s different?
Undeniably, it took the horrific image of a black man being murdered by a police officer for those running corporate America to finally understand that business must be responsible for creating more equity in its people practices. In June 2020, leaders began to take more public and meaningful positions on the importance of diversity, equity, and inclusion (DE&I).
From my standpoint as an executive search professional, this meant being cognizant of increasing representation at all levels of hiring for organizations, but particularly in leadership ranks. Today, virtually all of our clients consider a search process successful only when diverse candidates are considered for the position. As a firm, we have taken this a step farther because the data suggests that only by including multiple diverse candidates on slates will we get demonstrable increases in representation amongst new hires. At SSG, we have by no means been perfect over the years, but I believe we have and are making a positive impact with our clients in these areas.
Progress, however, continues to be uneven. Latinx leaders still do not benefit from the increased emphasis on diversity. The recent talent shortage spurred by the pandemic has exposed the implications of historic underinvestment in the development of professionals who have traditionally been marginalized.
People of diverse backgrounds continue to be underrepresented among professional ranks and as such, make up a smaller than optimal part of the candidate pool when recruiting for the most senior-level positions. This is exacerbated by the fact that candidates are often still evaluated by outdated and arbitrary measures that are poor predictors of future success. Add to that the fact that most firms have primarily focused on the “D” in DE&I (i.e., representation) more than they have equity, inclusion and belonging, which shows just how much more work there is to be done.
What will the next 25 years look like?
For one thing, we must make professional development more inclusive. A recent survey conducted by SSG confirmed that, while overall CHROs are hiring meaningful numbers of diverse professionals into individual contributor roles, representation diminishes significantly at the management and executive levels, even in their own departments.
Organizations must work to create more early career opportunities for diverse professionals offering them the same access to development that white men have forever enjoyed in their professional lives. This means, among other things, creating accountability and tangible DE&I goals for senior managers to overcome biases that pervade American business today. For years, we have seen that companies with diverse senior management teams produce better results and are more innovative and profitable than their homogenous counterparts. The best of these organizations incorporate DE&I metrics into their annual incentive compensation programs. Generationally, this should go a very long way to building a more inclusive and equitable future for all.
In the interim, search firms like SSG continue to both refine our own recruitment practices and advise our clients on how to practice conscious inclusion throughout the search and selection processes. By continuing to invest heavily in nurturing relationships within underrepresented professional communities, we are able to cultivate diverse candidate pools and, more importantly, our access and networks can be used to help promote high-potential leaders for the long term.
Over the next 25 years and beyond, we will continue to impress upon our clients the need to change their sourcing and evaluation criteria to be more inclusive and push back when we see short-list decisions influenced by unconscious bias. We believe the executive search industry must also apply this same discipline when hiring and developing our own teams. Given that our work as search professionals provides us the opportunity to influence positive change, we should all heed John Lewis’ call: “If not us, then who? If not now, then when?”