The corporate world has been primarily male for generations. Today, companies are striving to hire more female executives in an attempt to even the playing field and have more diversity. Data shows that 71% of companies focus on gender diversity within their organization, according to LinkedIn’s 2018 Global Recruiting Trends report, but why then are companies still struggling to close the gender gap?
Companies are feeling the pressure now more than ever to recruit female executives in an attempt to remedy their internal gender unbalance. The issue is companies are setting a mandate for recruiters to only hire a female executive, with executive experience. While there are many outstanding women who can meet those qualifications, unfortunately, hiring one will only shuffle these women around, and does nothing to address the larger issue of gender imbalance. If we want to make real change, then we need to make more room.
You may be surprised to know, female executives have advantages over their male counterparts in many areas. For example, women consistently outpace men in terms of higher-education degrees. Women over age 25 make up more than half of the college-educated labor force today. And in a recent piece from Crunchbase.com, it’s been found that more female-founded ‘unicorns’ were born in 2019 than before, according to the data.
Slowly but surely, women are climbing to the top of the corporate ladder. A study from Deloitte Insights found that the number of women in some C-suite roles increased in recent years.
The study determined that the proportion of women in the C-suite rose to 27.9% in 2019. That’s an increase of almost 10% from 2010. However, hiring female executives is often easier said than done. The workforce is increasingly competitive, and many companies fail to meet women’s specific needs, particularly around maternity benefits and culture. If you want to hire a female executive, don’t expect it to happen overnight.
What many companies don’t realize is that a woman is going to have different concerns when assessing a potential C-suite position, and this is especially true for a woman who is already established at another company. Some women spend years making their voice heard and solidifying their seat at the table, and this is often taken into consideration when weighing the risk of changing companies. Today, we’re going to discuss some of the key challenges of putting women in the C-suite, such as how women assess jobs compared to men, and how your organization can appeal to more female executives.
The Benefits of Women in the C-suite
More women in management has been a step in the right direction, but it’s 2020, and we need to start talking about why it’s crucial to have women in the C-suite through changes in HR norms and development within the organization. It’s a practice that many companies are putting into place—and for good reason. Multiple studies have shown that women have a positive impact on corporate organizations.
McKinsey’s 2020 Women in the Workplace report found that women have a profound impact on organizational and cultural change, particularly around diversity. More than 50% of female executives say they consistently stand up for racial and gender diversity in the workplace, compared to just 40% of senior-level men.
Additionally, companies that hire female executives are more likely to boost revenue. The McKinsey study found that company profits and share performance can increase by as much as 50% when women fill top leadership roles. That means hiring and retaining female employees should be a key priority for businesses today.
Understanding the hidden obstacles to hire women is the first step toward making your company more female-friendly. When we say “female-friendly”, some people believe this means that women aren’t as hard-working, but that’s not the case. Female executives often work just as hard or harder, but they require more flexibility due to additional responsibilities such as childcare.
Why Many Companies Struggle to Successfully Hire Women
For some, the benefits of women in the workplace still aren’t clear. But for those who realize how women can help a company thrive, most companies still struggle to hire women in executive roles. And once a woman is hired, it’s even more difficult to keep her on board. If your company doesn’t offer the benefits a woman is looking for, another company surely does.
Oftentimes, companies have a hard time hiring female leaders because they don’t really know what to look for. While it’s excellent to find women with years of experience, there are some other opportunities when it comes to hiring female executives. In reality, women who serve in upper-level management positions or VP roles could be better poised to take on a C-suite role, even if they aren’t already there.
Another obstacle is that companies want to hire women for the wrong reasons. Maybe their board of directors wants to see more gender diversity in the company but doesn’t understand the actual benefits. Hiring women for optics alone is not an effective strategy. The most important thing you can understand when hiring a female executive is that they want to be assured that they’ll have the opportunity to make an impact. Far too many companies hire female executives purely for optics.
One of the biggest reasons why companies have a hard time hiring women is that their workplace doesn’t take into consideration that female executives are going to assess the position differently than men by asking questions like, “Are there currently women in leadership roles who are respected?” and, “What have female employees said about their experience working at the company?”. Remember that many women have kids at home. They’re hard-working, but they also need some flexibility. There are plenty of companies out there that offer perks specifically for women, and those are the businesses that usually have the most success with hiring.
3 Ways to Bring More Women into Your Company
Hiring a female executive isn’t impossible, but it does take some careful consideration. Start by taking a look at your company culture and policies. Be ready to make some changes and revise your hiring strategy. Here are some effective ways to attract more female talent:
1. Be transparent with salaries
Make sure you’re offering a competitive salary and compensation package. A report from Glassdoor found that 48% of women prefer employers that are upfront with pay and benefits, compared to just 40% of men. Unfortunately, some organizations think they can get away with low-balling a female hire. While many men are willing to negotiate compensation further into the interview process, women prefer to have a full view of compensation earlier on.
2. Make your workplace flexible
Organizations hear that the workplace needs to be “female-friendly”, and it makes them believe that women aren’t hard-working or that they’re going to be bouncing a toddler on their lap at their desk. This isn’t the case. Women will work long, hard hours, and will often go above and beyond, but they want to know the organization has flexibility. This can include compensation for daycare, quality family and maternity leave policies, and an option to work from home when necessary.
3. Promote from within
One of the easiest ways to put more women in C-suite positions is to promote from within, but this isn’t just about giving women the opportunity to move up. This is about changing the overall culture. When you have an organization that makes HR strategies and career development a norm for women to have a track to the C-suite, you’ll no longer be scrambling for diversity hires. Instead, you’ll be known as an inclusive organization that provides women with opportunities as part of your company culture.
Hiring a female executive poses some unique challenges. However, the benefits far outweigh the struggle. Having women in leadership roles can impact everything from revenue to culture to inclusion. If you’re looking to hire more female executives, consider what women want in a company and make some improvements to attract more female talent.
What I notice most about Founding CEOs at startups is that they don’t know what they don’t know, and they’re either aware of that or they aren’t. Since they’ve had to rely on themselves to get things done, figure it out and make it happen, they tend to trust themselves more than anyone else. When working with a Founding CEO on an executive hire, here are the three things that prove to be the biggest obstacles to completing the search quickly:
Let’s look at each of these in turn.
1. Availability of the CEO.
If you aren’t able to fit a 20-minute call into your schedule once a week to go over the search, then finding this person isn’t a priority for you. I understand that you have a million balls in the air, I know that the company you are building is weighing on your shoulders. But, I need you to be invested in this search in order to ensure a successful outcome. Searches where the CEO participates regularly close more quickly than those that don’t. We need you to hear the feedback we get from the market, and we need to hear your thoughts on the candidates we are speaking with. We also need your real-time updates on what's happening with the business that could impact the interactions we have with candidates.
In addition to being available for weekly update calls, you need to be available to interview candidates. This is always a huge challenge because most Founding CEOs are on the road quite a bit and every meeting is a priority. The travel piece is always the biggest challenge, especially if you are raising money. But this is what you need to keep in mind, in executive search we are looking at passive candidates meaning they are either employed or they have just exited a company and they are “on the beach” evaluating opportunities. It’s a candidate market and they cannot disappear from work repeatedly to meet with you when you have availability. You have to be flexible, and you must consider off-hour meetings. It’s important that you work with the candidate’s schedule instead of trying to force them to accommodate yours. Not in this market.
2. Access and transparency with the interview team.
Oftentimes, CEOs will tell us that they will gather feedback from the people on their team who have interviewed the candidate. This rarely happens. More often, the CEO will gather piecemeal feedback via one-line text messages or passing conversations in hallways. And typically the feedback is broad and basically boils down to, did you like this person. As part of our process, we meet anyone who is on the interview panel when we kick off a search so that we have a relationship with them, and so that we can learn how they are viewing the role. This gives us an opportunity upfront to let you know if there are people on your team who aren’t seeing this position the same way you are and who might be looking for a different profile.
Now that we know each interviewer, we can prep them pre-interview on what to focus on when they meet the candidate. The focus is determined by you and me on our update call, and then after the interview, we email the interviewer with specific questions that they’re prepared for. That way we get comprehensive feedback and gather that into one document which we can review together.
3. Unrealistic compensation expectations.
This is complicated. Every founder thinks their baby is beautiful, and they want to hire executives who share their perspective and are interested in a higher equity ratio because that means they believe that the company will be worth a lot of money. There is wisdom in that. Of course, in a startup, you need people to be invested in the long-term growth of the business, and they should be willing to sacrifice some cash in exchange for equity.
At the same time, the cost of living is high. If you are looking for executives with a proven track record of success, and you want the years of experience necessary to prove they have a pattern of winning, then you are looking at people in a time of their lives where they likely have bigger expenses, mortgages, cars, kids, schools, etc. They aren’t able to pay the bills with a low cash compensation. When it comes to compensation, it won’t matter how great your business model is.
The people willing to really take that risk and work for a lot less cash are either going to be less experienced or this is their thing and they will have jumped from startup to startup hoping to land on a Unicorn. But in those cases, you will likely be annoyed that someone doesn’t have more than five years of experience or that they haven’t been in a role for longer than two years. So, if you want people to work for less than the market, and take a chance on you, then you have to take a chance on people that aren’t as senior as you wanted or who haven’t hit a big win yet.
There is a lot more to be said about the nuances of these three points and there is more to discuss in terms of what can be done to make better hires faster for startups. But for now, let's keep it more simple and stay focused on the three points I’ve highlighted. Here is the thing, as a search partner, I want to help you find the best person to take your company to the next level. I’m personally invested in your success. It makes me feel good to know that I’ve helped. I’ve always been a good support person, and I like to work with talented people who are doing something great and help them to make their dream a reality.
I’m the same outside of work. I surround myself with people who have big rearms, who are making a big impact on an international scale and I like being there to help out. This isn’t just a contract, it’s not just business. I really want you to succeed. I wish that Founders viewed our relationship that way more regularly. Usually, it takes time and then they understand. They get it when they can call me at 10 pm every night and talk about an offer they are putting together. They get it when I answer a text on the weekend. They start to understand that I am available because I want to be. As a team, we can get it done more quickly. And when we develop faith in each other, we take the chances that are sometimes needed.
What kinds of chances? Chances on candidates. The better we know each other and better the relationship is, the more likely it is that I will say, “Hey this person isn’t at all the profile you wanted, but here is what they have done that makes them compelling, and trust me when I say that this person is incredible. You have to meet them.” Then you say, “Well okay.” And then you fall in love and it is perfect. Years later when that Chief Product Officer you hired out of a totally different industry has made headlines for the work they’ve done in your business, and a journalist asks you about how you came to hire that person- you will recall how you to a chance on meeting them because the recruiter you worked with understood the business so well that she was able to suggest someone who wouldn’t have normally been on the radar.
So, invest the time, let your search partner run point in the interview process, let what you can afford in compensation guide you to the experience level of the candidate, and build a relationship with your search partner. This isn’t transactional; this is a process. One that is usually three to five months long and you will have a better experience and a great outcome if you have a relationship with the person or persons who are leading this search effort. And come on, everyone works harder and more diligently when there is a sense of camaraderie when there is a relationship.