Investing in your people is one of the the most effective way to increase your productivity and grow your bottom line. Find out more from Iversofts' very own CEO, Graeme Barlow.
What is the best investment you can make in your business? Expensive, high performance software? Cutting-edge technology? There may be rational behind these additions, but more often than not, these investments are superficial in compassion to the highest return investment you can make: Investing in your people.
More specifically, invest in diversity by actively seeking it in the people you hire. Just like with a business portfolio, diversity pays dividends. The investor who puts all their eggs in one basket risks everything. The same is true when it comes to hiring. Failing to invest in diversity sets up your business for failure.
Benefits of Investing in Diversity
Having diverse perspectives is hugely beneficial to every business.
Diverse teams encourage innovation and creativity. According to a recent BCG report, companies with diverse management teams reported that nearly half their revenue comes from products and services launched in the past three years. These organizations also had better financial performance overall.
Research shows that financial performance is 95% correlated with decision-making effectiveness. Diverse teams make better, more efficient decisions. Diverse, inclusive teams make decisions twice as fast and with half the meetings
When confronted with a challenging business decision, teams that include a mix of genders, ages, and geographical backgrounds make better decisions 87% of the time compared to individual decision-makers. Gender-diverse teams make better decisions nearly 75% of the time, while all-male teams only do so about half the time.
It’s effectively a coin flip as to whether an all-male team or an individual will make a better decision. Increase the diversity and you’re almost guaranteed to have better decisions.
Further, investing in diversity changes your reputation among prospective hires. About 64% of job candidates research a company online before applying and 1 in 3 will not apply if the company lacks diversity.
There are countless benefits to investing in diversity, yet even with the best intentions, many companies struggle to build diverse teams. Hiring practices and traditional recruitment tactics are often biased. So how does a business — or hiring team — avoid falling victim to unconscious bias, nepotism, and blindspots?
How to Invest in Diversity Through Hiring Practices
Hire People, Not Resumes
Life experience is undervalued in job candidates. The content of human character says a lot about what a person will bring to a team. When hiring, look at your candidates holistically.
What unique circumstances have allowed them to foster critical skills? Pay attention to their history — where they volunteer, their hobbies and passions, what they value, and where they find community. All of this offers insight into their strengths as people.
Your company is built out of departments or teams — and those are built from individual people. Everyone’s life experience will shape the way they interact and relate to each other. Research from the Society for Human Resource Management shows that diverse and inclusive teams increase employee engagement and improve communication, which results in higher job satisfaction and better performance.
Look at who’s missing from your team and build a relationship with them.
Be Wary of Emotional Decisions
What makes us choose the people we hire?
When it comes to hiring the right people, employers use lots of different criteria. Often, it comes down to a feeling that a person is the right fit. However, we must be careful to assess what compels us to arrive at that conclusion.
Without getting too deep into human psychology, we are all at risk of falling victim to unconscious bias and inaccurate assumptions. Yes, the energy of an interview and the attitude of an applicant are factors in hiring decisions. but they shouldn’t be the primary criteria. First impressions can be deceptive, especially in a staged setting like an interview.
Instead, try thinking outside the box. Ask for prospective employees to answer complex questions in advance in writing. That way, you can remove any identifying information and analyse their thought process without being biased by age, gender, race, etc. It also allows quieter candidates to shine.
Sometimes the best person for a role isn’t the most charismatic or doesn’t have the glossiest resume.
See the Value in Diverse Educational & Professional Experience
When considering possible candidates, transferable skills that enable them to think dynamically and creatively are more important than outdated certifications. What has a person’s unique professional background armed them with that will serve them in their new role? Work in a seemingly unrelated field could have developed their keen team management skills or given them an eye for how clients will interact with a product.
As a real life Iversoft example, our own Director of People & Culture, Steph Barlow, began her career pursuing Roman history and archeology. Only after completing her Master’s degree did she realize that her real love is people. She found her calling in HR and her unique background helps her understand how people work–on a small and large scale.
Moreover, industries change. As the CEO of Iversoft, I’ve seen how rapidly the tech industry evolves. Most industries look vastly different today than they did 20, 15, 10, or even 5 years ago. Does your industry look the same as it did (or would have) in the early 2000s? What about before everyone had a smartphone? To get a sense of just how much an industry can change in a considerably short period of time, look how much different the labour force has become since the start of the pandemic.
Industries are complex ecosystems with constantly evolving needs. We need to get away from relying on academic records as the main predictor of corporate success.
Think Global, Act Local
When it comes to hiring, try to think globally. The world is full of people with different educational backgrounds, cultures, ages, genders, and perspectives. The people who make up your business must reflect that. diverse teams make better decisions – and better decisions make more successful companies.
You don’t need to outsource to access global talent; we’ve got a plethora of it here in Canada. As one of the most diverse countries in the world your business needs to reflect that, you’re leaving opportunities and resources on the table. Canadian immigrants and other newcomers to Canada bring the world to your doorstep.
Having even 1.5% of your management team originate from countries other than your own can improve innovation revenue by a full percentage point. Innovation revenue is what keeps your business current and relevant. Failing to include diverse ethnic backgrounds in your management team is leaving money on the table.
With local and Canada-wide resources, like job boards, community centres, and social media, it’s never been easier to connect with the people your business needs. We’ve seen the benefits of hiring diversity at Iversoft firsthand and while we appreciate the recognition of our approach, it shouldn’t be noteworthy.
Plan to Build Long-Term Relationships with Employees
There’s a saying in investment: Time in the market always beats timing the market. When it comes to hiring, it’s better to choose wisely and invest in the long game. It can cost 33% of an employee’s salary to replace them. And that doesn’t include the costs of lost productivity and revenue. To calculate the financial cost of employee turnover, check out Adecco’s turnover calculator.
If you fill positions with hastily-hired new grads that you view as temporary, (or worse, disposable) you are actively harming your goals in both the short and long term – and not just financially. The churn-and-burn mentality also harms your company’s reputation, particularly with prospective new hires.
Who would want to work for a company that can’t retain employees? Do you think your employees will give you their best work when it’s obvious that you don’t care about them? How will your clients feel when they’re bumped from one point of contact to another?
People have limitless potential when coached, mentored, and guided towards success. Allow your people to outgrow the role they were assigned to and then reposition them. People are not static. With proper mentorship, they will diversify their skill set and create additional growth. This kind of long-term relationship development is beneficial to the employee and the business.
Businesses often fear investing in their people in case they leave. But what if you don’t and then they stay? It’s far worse to hire someone and watch them go stale and stagnant. Turnover is the cost of doing business, but investing in people will always pay in the end.
The success of your business is dependent on the people who comprise it. Diversity improves communication, engagement, creativity, innovation, and job satisfaction. Additionally, homogeneous teams make worse decisions and take longer to reach them.
If you’re not actively increasing diversity at all levels of your business, you’re leaving a lot on the table.
Treat your people as an investment. Look for people with unique backgrounds, experiences, and strengths and then foster them into everything they can be. Some employee turnover is inevitable, but investing in quality people always pays off.
At Iversoft, one of our company values is that a good idea can come from anywhere. In over a decade, we’ve found that introducing diverse experience and even inexperience is one of the greatest sources of new ideas. Challenging the status quo is one of our biggest assets. If you are looking for innovative ideas for your custom software or mobile technology, Iversoft can help. After all, we know we’ve got the right people for the job.