Building diverse teams from scratch in order to scale your business
This guide explains the benefits of how to hire diverse teams and how this can help to scale your business. Startup founders have the chance to make it part of their strategy early on, by approaching it as a business opportunity and not as a box to check. When you foster a culture of openness and inclusivity with your first few hires, you will benefit from it in the long-term. This guide will incorporate:
- What does diversity means
- Why hiring diverse is a promise for the future
- How to improve your diversity strategy
What is diversity
Diversity describes the similarities and differences that people have. This can be conceptualised in categories, such as gender, race, economic class, age, philosophy, religion etc. Some diversity is inherent, and some is acquired through experience. This means that some types of diversity are harder to address than others. We should not only tolerate the differences, but make is as an asset to improve our business. All employees should get an opportunity for involvement.
Some tech companies took the first step creating awareness on diversity by being transparent on the current levels of diversity in their company. These discussions are often on gender and age divides. Women are generally underrepresented in technical positions and at the managerial level. There are initiatives from the industry to change this, such as meetups, only-woman conferences, and positive discrimination. Diversity on age is also a key topic. Startups usually have young founding teams and also young employees, two examples being Google and Facebook, where employees are on average 30 years old. The iconic book ‘Disrupted: My Misadventure in the Start-Up Bubble’, a 50-year old ex-employee describes his frustrations when a 24-year old graduate becomes head of the department in the startup he works at. It is said that, young employees bring in a lean and flexible mindset and older employees bring in knowledge and experience. Finding a balance between the two in your company is key.
But diversity is also about different backgrounds in the professional environment: combining people with diverse skill-sets and who come from different places. Recognizing your bias in hiring can help you to have an open mind, question your process, and avoid hiring mistakes. The earlier you think about inclusion in the workplace, the better chance you will have for true innovation and success.
Why hiring diverse is a promise for the future
Diversity can sometimes be seen as the “right thing to do” or as to political correctness. Instead, it should become a business priority. A report by McKinsey shows that companies with high levels of diversity have greater financial returns. It states, "More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns." This results in teams with a variety of perspectives, which create conflict. In the end, having unique perspectives will help companies to refine their unique selling propositions and pivot when necessary. A group of diverse problem-solvers can outperform groups of high-ability problem solvers, showing that diversity is a key driver of internal innovation and business growth. Also, companies with inclusive boards have higher return on equity than companies who lack diversity and inclusion on boards.
So why is it a promise for the future? “If you build a diverse team at the start, it gets easier and easier to be diverse as you grow, and you get to reap the benefits of that diversity along the way”, states Mike Arauz, an entrepreneur who made diversity the foundation of his company article.
How to improve your diversity strategy
At ACELR8, we often think about the right 'fit' when considering a potential hire. We learned that 'fit' does not mean hiring someone who is the same as your existing staff. Instead, the concept of 'fit' might be better understood by thinking of a puzzle, where the pieces mesh together, but with a focus on every piece being unique and contributes something that is otherwise missing.
Diverse hiring means taking special care to ensure procedures are free from biases related to a candidate's age, race, gender, religion, sexual orientation, and other personal characteristics that are unrelated to their job performance. And using these insights to hire a diverse team. Solutions can be found in sourcing, use of channels, setting goals, altering the interview process, eliminating unconscious bias, and by promoting diverse leadership and culture.
Start with sourcing. Use your Boolean search string to your advantage. For finding woman you can use common female names in the string. This also works when you are sourcing for specific languages; for example, a Boolean search of German surnames will lead you to German-speaking people. Also, look into specific meetups and user groups (e.g. ‘Woman on Rails’) and use social media groups on LinkedIn and Facebook to find talent. Furthermore, talent mapping can be a good method to proactively identify diverse talent. Creating talent maps can ensure that you have a strong pipeline of candidates.
Expand your network. By networking continuously, you can build relationships that will serve as a feeder for underrepresented talent across disciplines and interests, and will give you an advantage when you are ready to hire. Examples are to be present on social networks, at referral programs, alumni networks, community agencies and organizations, as well as using relevant websites, webcasts and podcasts to your advantage. If you want to find people who are different to you, then you need to make a deliberate effort to seek out networks and communities beyond those you are already a part of.
Set diverse hiring goals. Discuss beforehand with your team what your goal is, so that everybody is on board. An example is that of Google’s “three-thirds” hiring model, where you give three measurements on how to shape your team. For example, one-third of their employees has a background in the role they will take on, one-third in consultancy and one-third in other fields. All of them bring something different to the table and have a different approach to problem-solving. Make sure not just to put more policies in place, but to make diversity a long-term goal for improving your business performance.
Create a diverse interview process. Create a neutral language in your job postings. Make sure that your interview panel is diverse, and be creative with who you put into the panel. Make your recruiters accountable for adding diverse talent into the pipeline. Or use an AI Chatbot that does the first hiring steps, to remove human unconscious biases.
Create a diverse leadership team. Use a top-down strategy and create a diverse leadership within your company. The executive team should be a mirror of the employees in the company. This results in all employees feeling that their presence and contributions are valued, that somebody in the management team can relate to them, and that there are opportunities for them to progress in the company.
Create a diverse culture. Diversity starts and ends with the culture of a company. It needs to be a part of who you are as a company. One strategy is to ensure that you give equal salaries to employees performing the same roles roles. Other strategies are investing in onboarding and mentorship and integrating processes that encourage diversity into feedback. Be open about it: promote events about diversity, create a slack channel for your employees to discuss the topic, or sponsor third-party diversity events. Make sure to promote diversity beyond your own company by writing content on the topic and speaking at conferences with a focus on diversity. Also offering a flexible work-life balance is key, as you attract people of a varierity of ages and employees with young families.
Be aware of the unconscious bias. This is an automatic tendency or inclination to have a favorable or unfavorable attitude or belief about a particular category of people. The goal is to teach ourselves how unconscious bias can affect our perceptions, decisions, and interactions. Discuss the topic, define target criteria upfront and use it to structure interview processes to consistently evaluate candidates on these criteria. Avoid doing interviews when you are stressed, as this reinforces biases. Include a diverse interview panel and create an interview guide for your candidates, in order for the candidates to get a equal head start (e.g. Stripe did this).
Make diversity unremarkable. People should feel included no matter their background. Mike Aruz states in his article, “(Our diveristy policies are...) that inside our company it will be unremarkable to be a woman, to be a person of color, to be queer, to have a different nationality, to have a disability, to come from an economically disadvantaged background, to have served in the military, or any number of other things that make us different. Within a team no one will feel more “other” than anyone else.” This creates the opportunity for each person to be more than their difference. That each team member can be themselves – their true selves. This is when you start to realize the full promise of diversity.
You, as a founder, have the possibility to make a difference in your company and space at an early stage. Diversity fosters creativity and innovation. You can build diverse teams by implementing diversity into your hiring and culture, and by ruling out the unconscious bias. Making people aware of diversity and implementing this in your company, lays the foundation of long-term success.
Written by Isabel Strijland
Need help? At ACELR8 we have a track record of building diverse team and advising on diverse hiring strategies. Get in touch to find out more.