Perspectives on the State of Diversity and Inclusion in the Private Equity Industry - Part Seven
Revamping the interview process - a hiring checklist
Disclaimer: Please, note that the content of the below document does not constitute legal advice. Any positive action needs to be based on an assessment by your business, based on reasonable evidence, that a certain group (eg. women, members of certain ethnic groups, sexual orientation) is either underrepresented or at a particular disadvantage in that industry. This is clearly recognised as being the case so far as women, ethnic minorities and professionals coming from a low socio-economic background in private equity.
How can you maximise the talent pool to meet and recruit more diverse candidates?
1. Consider engaging with schools, colleges and universities to conduct initiatives such as work experience and internship programs targeted at specific demographics. This will help expand the pool of people who first consider financial services and then private equity or venture capital as a prospective career. This covers not just gender and ethnicity since you can also reach out to individuals from different socioeconomic backgrounds, or from different parts of the regions/countries.
2. Consider reaching out to LGBT+ resource groups on campuses to identify and recruit the best LGBT+ talent.
3. Consider holding breakfast and other networking events to meet diverse candidates.
4. Proactively meet talented female candidates and other under-represented individuals, regardless of whether there is a current role i.e. build a diverse candidate pipeline for the future.
5. Consider hiring candidates at earlier or later stages in their careers e.g. under 18 months/over 4 years’ experience.
6. Consider widening the pool of applicants to include non-traditional sources for open positions. Look wider to attract a broader spectrum of talented people to the industry (smaller M&A boutique firms, more experienced investment banking/strategy consulting professionals, corporate development, public company management, lawyers) and consider being more flexible on academic provenance.
7. Distribute recruitment adverts in diverse and wide ways, not just through usual channels. More targeted recruitment strategies are required including: direct advertising, working with specific organisations that work with diverse candidates, more proactive outreach through networks, and looking at diversity and ethnicity (on a perceived basis, as certain questions cannot be asked legally).
8. Review the language used in your outreach in the context of the imposter syndrome, as well as the network and approachability of the firm.
9. Take positive action to enable diverse lateral hires to increase the diversity of talent considered for promotion to senior levels.
10. Re-recruiting experienced industry leavers constitutes a key short-term measure to increase diversity at the mid to senior levels. New resources such as The Return Hub seek to enable experienced individuals to re-enter the private equity or venture capital workplace after a sabbatical. These individuals would typically enter at a similar or slightly more junior level than their most recent role but can then be supported to develop and grow into more senior roles.
11. Establish a Returner Programme to help experienced women return to the industry when they are ready. There is a great untapped talent pool out there.
12. Consider partnering with specialist organisations and community networks, as well as programmes helping people return to work after extended leave.
How can you remove bias from interview processes?
- Review your hiring and assessment process. How? Review job advertisements to ensure they are clear and inclusive, and provide training for employees that leads to consistent approaches to interviews.
- Apply systems and training that remove bias and clarify criteria for evaluating candidates to avoid reliance on shared traits or backgrounds and more closely match candidates with the company or position that is best suited to them. How? Structure tone, outreach and interviews to maximise opportunity for top, diverse talent.
- Set clear, consistent evaluation criteria before the process begins to ensure that there is no space for personal biases in the hiring process.
- Consider making some of the hiring process blind e.g. ask your recruiter to fully anonymise CVs.
- Consciously invite diverse candidates to interview in person rather than dismissing them at the CV stage.
- Consider offering coffee chats to diverse candidates before a formal interview process, to ease them into the interview process.
- Where possible, pair this with gender and ethnicity balanced interview panels for best results.
- Ensure hiring panels themselves are as diverse as possible and interview diverse candidates 1:1 rather than as a panel.
- Offer to pair each diverse candidate with a female / diverse mentor to advise them throughout the interview process.
- Structure interviews to ensure fairness and reduce the opportunity for bias/unconscious bias.
- Consider universities outside of top institutions and look at the relevance of work experiences.
How can you convey inclusiveness during the interview process?
- 1:1 interactions should be used to convey the firm's culture and commitment to D&I. Similarly, it is good practice to use the coffee chats to convey D&I values. Rather than addressing it formally, interviewers/mentors can share details about their own lifestyle.
- The UK government introduced shared parental leave in 2015 to enable the sharing of maternity/adoption leave between both parents. As many female applicants may want to confirm whether a pregnancy is a situation the firm can handle, encourage interviewers to share their experience of these leaves and their experience in settling back into their role. This can go a long way in giving reassurance to female candidates that they will not be compromised by a future pregnancy and can thrive in the firm in the long term.
- Do you have an up-to-date maternity and paternity policy in place? Many firms have yet to experience their first case of pregnancy or parental leave and end up rushing out a policy when it’s suddenly needed. It is important to already have thought this through if you want to promote diversity and create inclusiveness within your firm.
How can you set Interview and hiring targets?
- Establish organisational guidelines to interview or hire a target number of diverse candidates. Please, note that while business targets may be fine in a context where a specific population is underrepresented and put at a disadvantage, quotas are illegal.
How can you maximise D&I within your firm, to appeal to a diverse candidate population and help retain diversity within your workforce by fostering inclusion?
- Make a public commitment. Firms can, for example, establish an internal council on DE&I for themselves and their portfolio, with a C-level chair to signal that this matters. The council can develop metrics, set goals, and monitor progress on targets for both the firm and the portfolio.
- Make an organisational D&I statement and set a D&I strategy.
- Consider appointing a Chief Diversity Officer, or an internal champion within your leadership/management team.
- Set specific gender targets at leadership level. How? Define success outcome measures; create a multi-year plan to achieve outcomes.
- Develop an action plan to achieve targets, or achieve gender equality, in senior management and leadership teams.
- Conduct Diversity and Inclusion data tracking and set targets. Having diversity targets is clearly beneficial and will drive change.
- Consider establishing a Diverse Training and Mentoring program for hires from different backgrounds. How? Institute organisational mentoring programs which focus on pairing diverse role models at the senior level with emerging, up-and-coming professionals. Aim? Support them in securing roles that will challenge them, advance their careers and provide the visibility and remuneration they deserve.
- Consider initiatives such as employee focus groups, reverse mentoring, D&I steering groups and explicitly including diversity and inclusion in individuals and business objectives are all ways firms can encourage ideas and participation beyond senior management.
- Consider launching organisational culture surveys and progress trackers.
- Consider reviewing the opportunities/transactions different people were given, challenging resource allocations, as well as set appropriate policies and procedures.
- Consider reviewing your firm’s culture and whether affinity bias and familiarity prevails over performance. Bias causes gatekeepers to be significantly more likely to give opportunities to ‘people like them’. For example, some reasons that cause a male colleague to receive opportunities to grow instead of a female colleague include themes of ‘drinks after work’, ‘golf’ and ‘ability to banter’.
- Consider taking action to gain an understanding of differential gender norms, in areas such as the attribution of accolades and the treatment of mistakes which may be the root cause of outcomes such as promotions, decisions to quit and pay increments.
- Measure and analyse promotions and attrition by gender, ethnicity and other areas.
- Review your leadership training and consider including unconscious bias training and anti-harassment training.
- Publish a clear harassment reporting system.
- Consider incorporating or reviewing your harassment and discrimination policies.
- Review your use of language. The language used by leaders and people throughout the organisation is very important in creating an inclusive environment, particularly around ethnicity. Descriptions such as ‘non-white’, ‘BAME’ or ‘minority’ may emphasise the ‘other’-ness of underrepresented groups, excluding them rather than being inclusive. A better approach would be to have an open conversation with individuals around this subject. This has the advantage of recognising the individual experience of employees and promotes empathy. Also, these employees get a platform to express themselves in an authentic way.
- Communicate why the firms need to collect D&I data and how it will be used, to gain the trust of all colleagues, in particular those who may perceive this data as sensitive.
- Have a family leave policy and prioritise actions on hiring practice; training, development and access, flexible working, back-up care, maternity and returner policies.
- Consider establishing family-friendly policies, for example offering enhanced shared parental pay, so this is consistent with the maternity pay packages on offer. Anecdotally however, the take up of shared parental leave remains relatively low, with cultural factors such as lack of role models and fear of missing out influencing behaviour. Other related industries, such as accounting and consulting, appear to be further along on this journey. It is important for this to become normalised over time, with men taking shared parental leave to be discussed in the same way as a woman taking maternity leave.
- As previously stated, long working hours, excessive travel or lack of support are issues which affect the retention of women in the industry. Consider whether your firm fosters an ‘up or out’ culture where people who need to take a period of leave or work less intensively (for example when they have young children) may feel it is not the right place for them on their return. For example, there is a (probably mistaken) perception that people may not want to stay in a particular role if their peers/cohort have progressed into more senior roles.
- Consider conducting a pay gap analysis. Please, note that organisations with 250 or more employees in England, Scotland and Wales must publish their gender pay gap figures annually.
- Promote or launch employee resource groups, whenever relevant.
If you would like to discuss any of these points further or if you have questions about the support Walker Hamill offers, please contact Joelle Badiabo on firstname.lastname@example.org.
For more information on our Diversity and Inclusion policy, please read our D&I Statement below.
At Walker Hamill, we recognise that diversity is a real value and have put diversity and inclusion at the centre of our identity, fostering an inclusive culture for everyone in our firm. While we seek to advance diversity within our ranks, we are also working to support and promote diversity & inclusion within the industries we serve.
In 2021, we created a dedicated D&I function and since then have worked to educate all of our teams on critical D&I topics as well as identifying key hiring best practices to remove unconscious bias, encourage diversity and ensure fairness and inclusion during interview processes.
As a firm, we spend a significant amount of time conducting candidate research and building quality relationships with candidates. Consultants and researchers alike are encouraged to develop empathetic skills so that they can best understand the lived experiences of all candidates, regardless of their gender, gender identity, marital status, sexual orientation, ethnicity, colour, nationality, religion, age, socio-economic background, disability – or any other grounds.
We recognise the pivotal role that executive search firms play in helping to bridge the diversity gap in the corporate world. That role is crucial in challenging industries such as private equity, where large groups of the wider community have been historically under-represented. Our engagement is authentic and we want to be a force for positive change, with diversity & inclusion at the core of our vision, mission and values.