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Chris Coe is Head of Executive Search at Talentmark.
Diversity and inclusion shouldn’t be something that companies have to work hard at, writes Chris Coe.
The pharma and life sciences sectors have been heavily focused on improving diversity in recent years and the BIO recently published its first “state of the industry” report Measuring Diversity in the Biotech Industry1- with some mixed results. The report is based on data gathered from 98 companies based in the United States, Canada, Europe, Asia and Australia. Sixty-four percent of these have less than 100 employees while 10% have more than 10,000 employees.
While the findings show that there are areas of marked improvement, certain factors are still falling short. One statistic that immediately jumped out at me is that 84% of the CEOs of companies responding to the survey are male and 88% are white. Similarly, it is particularly disappointing to see that people of color only make up 15% of executive teams and 14% of boards.
Furthermore, only 16% of companies have goals to promote or develop women and 12% of companies have goals to promote or develop people of color. In terms of recruitment, only 11% have incorporated diversity targets for women into their hiring processes, and only 10% for people of color.
There is also a trend emerging whereby start-up businesses are generally better at recognizing the value of diversity, versus their larger counterparts. In the report, pre-revenue, smaller, and private companies all showed positive outcomes for representation:
• Pre-revenue organizations are more likely than profitable organizations to have executive levels that are at least 25% people of color (29% of pre-revenue organizations vs. 12% of profitable organizations), and are also more likely to have a female CEO (22% for pre-revenue vs. 9% for profitable).
• Small businesses are more than twice as likely to have a female CEO compared with larger companies (20% small vs 9% large).
• Privately held organizations are more than three times as likely to have a person of color as CEO (19% private vs. 6% public).
These results may seem unfairly skewed for big pharma, as I know from my work with these types of businesses that they are all acknowledging the need to do more and in many cases, diversity is rightfully high on the agenda. However, for reasons I shall explain shortly, it can be far easier for fledgling businesses to establish a culture of inclusiveness and attract a more diverse workforce.
I think it’s important to reiterate that diversity and inclusion should never be about paying lip service or keeping up with appearances. It has been proven that diverse businesses are more successful. To recall an earlier report from McKinsey last year, it was revealed that companies in the top quartile for gender diversity are 15% more likely to generate financial returns above the industry average and those in the top quartile for racial and ethnic diversity are 35% more likely to do so.
Ensuring a broad blend of experience, ethnicity and perspectives can also improve what we are all ultimately striving for – improved patient outcomes. More businesses are realizing that a diverse workforce can ensure a deeper understanding of different patient groups and how to best reach those audiences and meet their needs, whether it’s looking at different ways of marketing a product or choosing the right endpoint for a future therapy. In other words, diversity is great for shareholders and even greater for patients.
However, it has to start at the top. Companies with diverse boards are far more likely to attract a mixed workforce at every level. Over the past two years, 60% of the life science board placements Talentmark has made were female, and these were predominantly within biotech start-ups – a far higher average than stated in the BIO report. At the same time there are encouraging signs that female parity is making great strides in more progressive environments.
Then there is the matter of age and background. I have always maintained that the most successful boards combine experienced industry veterans with younger, entrepreneurial spirit. Likewise, broad educational backgrounds can only be seen as a good thing in this day and age where classic science and computing collide. The rise of artificial intelligence, gene and other novel therapies is changing the way that we recruit.
So we know why it is important to attract a diverse workforce, but this leads us to the next key question, which is howdo these companies go about making it a reality?
Firstly, employer branding is crucial. If a business clearly articulates its image as innovative, inclusive and exciting then it is far more likely to attract people with those same attributes. It can be hard, particularly for a newly-established business, to make time for what is seen as a “nice to have,” but a strong brand will ultimately pay dividends in the hiring process.
Innovation itself is certainly a big factor in attracting diversity and this is one of the main drivers for us setting up the Talentmark Innovation Award,2 where we will be offering our services free of charge to a business which we believe has the potential to transform healthcare. Innovative companies tend to have open minds and be less risk-averse and this mindset naturally feeds into their hiring approach.
As mentioned earlier, the culture of diversity and inclusion has to start at the top and it rests with the CEO to lead by example and set the tone and mantra which the rest of the organization will buy into. If the CEO genuinely cares about hiring the very best team, then it will be embedded in the company culture. The CEO must maintain a close working relationship with their HR department and devote time to reviewing talent acquisition strategies to ensure they can attract a diverse workforce.
Diversity and inclusion shouldn’t be something that companies have to work hard at. If a business espouses those values, then they should live up to them through a strong employer brand, an executive team and board which lead by example and an open-minded approach to talent acquisition which focuses on what positive differences someone can bring to the table, rather than looking for more of the same.
Chris Coe, EVP Executive Search, Talentmark.