The Business Case for Hiring a Diverse Leadership Team
Over the past several months, I have a heard a steady but clear call to action from my clients: we want to see more female candidates for this role.
Echoes of this request have reverberated in similar conversations since the beginning of my career in executive recruiting. My belief in the mission of gender parity in corporate leadership is how I ended up here today, launching Precita (formerly Tapped) a specialized search consultancy.
Experts agree: gender diversity among corporate executive leadership is strongly correlated with an improvement in corporate bottom line. There are many recent studies that highlight this correlation, below are a few that I find particularly compelling:
“Diversity is a source of competitive advantage, and a key enabler of growth,” according to the McKinsey Global Institute, 2018. (1) The report also noted that “The United States could add up to $4.3 trillion in annual GDP in 2025 if women attain full gender equality.”
Firms with more women in the C-suite are more profitable, according to a study published in the (Harvard Business Review). (2) “When we examined the profitable firms in our sample (average net margin of 6.4%), we found that going from having no women in corporate leadership (the CEO, the board, and other C-suite positions) to a 30% female share is associated with a one-percentage-point increase in net margin — which translates to a 15% increase in profitability for a typical firm.”
“Companies where women are 50% or more of the decision makers have outperformed” those with fewer women according to the Gender 3000 study from Credit Suisse. (3) “Looking at sales growth since 2008, we find [this to be true] in each and every subsequent year.” This includes years where most other companies experienced natural dips and downturns.
Gender-diverse tech companies outperformed by 5.4%. (Morgan Stanley Global Quantitative Research team, 2016). (4) “Highly gender-diverse tech companies returned on average 5.4% more on an annual basis than the average yearly returns of their peers with less gender diversity.”
“Gender diversity on executive teams is strongly correlated with profitability and value creation,” according to a 2017 study of more than 1,000 companies in twelve countries by McKinsey & Company (5), gender diversity on executive work teams led to a 27% increase in economic profit margins and a 21% increase in EBIT margins.
The problem that needs to be solved is not whether companies should prioritize diversity, it’s how they are going to change the status quo of inequality.
According to the 2018 Lean In/McKinsey Women in the Workplace report: “Since 2015, the first year of this study, corporate America has made almost no progress in improving women’s representation. From the outset, fewer women than men are hired at the entry level. And at every subsequent step, the representation of women further declines.” (6)
It’s not just a matter of interviewing a few women who happen to apply. Companies need to seek out qualified—and often untapped—female executive talent.
Tapping that talent is where my firm, Precita, comes in.
We are a specialized executive search consultancy. Our goal is to help our clients become more successful through adding outstanding female talent to the executive leadership team. This is what we offer:
Expertise at defining our clients’ problems and needs, and designing a process to find the best people. We don’t approach the market until we have a clear narrative and clear targets.
Access to our extensive portfolio and network. We have spent years curating a network of highly qualified female VPs and C-level executives, and we are constantly growing this portfolio of contacts.
A slate of strong candidates who precisely match our clients’ specifications, and just happen to be female. We also use a milestone pricing method as a display of confidence; if our clients aren’t satisfied, they aren’t beholden to a fee.
We know these results are possible.
In my former job at Trewstar (an executive recruiting firm focused on placing women on Fortune 1000 and pre-IPO boards of directors), I was inspired by the founder and my mentor, Beth Stewart. A former Goldman Sachs investment banker and public company board director, and a long-time advocate for women in leadership, Beth founded Trewstar in 2011. When I joined Beth’s team, Trewstar had completed one placement. By the time I left four years later, we had placed 45 women on corporate boards.
Precita specializes in placing women in the C-suite. Although we’ve had success with placing women on boards, up until now, there has been no search firm devoted entirely to placing women at the C-suite and VP level. This is why I'm launching Precita, a search consultancy aimed at achieving gender parity.
We work with our clients to solve their business problems through the placement of qualified executive talent. Are you ready to take the necessary steps to increase your company’s profitability? Let’s start the search for your future leaders today.