Hiring at the C-suite and executive level typically involves considering many variables when evaluating candidates. To find the strongest “fit” for an executive role, candidates must undergo a gauntlet of interviews, assessments, and referencing. Along the way, they are vetted against key requirements such as their educational achievement, professional background, track record, industry-specific expertise, transaction experience, cultural fit, ability to meet the hiring company’s desired business objectives, and much more.
As an executive search firm, JM Search places hundreds of executives each year and assess thousands of candidates along the way. Recently, we examined over 100 search placements conducted since 2022 within the healthcare sector. This review included over 600 candidates for roles including CEO, CFO, COO/SVP Operations, and Chief Commercial Officer with the intent of gaining additional insight into who was being selected for specific roles and why.
We analyzed candidate pool vs. placement data related to education level, academy company experience (i.e., an organization well known as a place to start a career and is known for developing industry leaders), and demographics, including gender and racial background, to better understand how to best support clients with determining the exact executive profile faster and more effectively.
Our analysis uncovered variances that suggest there may be unintended bias taking place in the later stages of the search process that impacts who ultimately gets the job. The data demonstrated that final candidate selection was not representative of the presented candidate slate in terms of diversity – be it educational, ethnic, gender, or professional background. Restated, even if businesses are prioritizing a diverse slate of candidates for consideration, the ultimate placements demonstrate this is not necessarily yielding diverse outcomes.
While our findings are preliminary, they highlight some potential biases that if considered in the hiring process may improve how a company assesses and qualifies candidates against stakeholder needs and goals. Here are three notable trends that emerged from our analysis:
For women and people of color, having an advanced degree is advantageous to increase their likelihood of being selected for a role compared to their white male counterparts with similar backgrounds.
Though holding an advanced degree such as an MBA, MD, or other Master’s level degree is common at the executive level, it is even more so for candidates that are female and people of color. From the total data set we examined, 64% of selected/placed candidates held a Master’s degree. However, when further analyzing the data by gender, we found that of the candidates that landed the job – 62% of male placements and 72% of female placements held advanced degrees. The difference was even more stark among candidates of color who were selected for the roles – a staggering 92% of whom held Master’s degrees. Based on these findings, we suspect that companies may be placing a heavier weighting on the educational background on women and POC candidates when assessing their qualifications relative to white males.
Academy company experience is disproportionately valued in the CFO function.
Academy companies are typically large, brand name companies with varied functions and strong early career progression opportunities. According to our data, the impact that time at an academy company has on the hiring process varies widely based on job function. Overall, 65% of placements had spent time at an academy company earlier in their career, however for the CFO function this figure jumped to 79% of hires. Compared to CEO placements, where just 43% of placements had academy company early career training. Why this focus on training in the finance function? We believe that it reflects the nature of accounting firm hiring and the desire for Big 4 accounting experience among hiring companies.
Women are more likely than men to change jobs after entering into a job search process.
Controlling for other factors including race, a female candidate was more likely to change roles after engaging in a search process than her male counterparts. In other words, once a female candidate begins actively interviewing for her next opportunity, she is more likely to continue searching for her next role than stay with her current company when compared to male candidates. From the full data set of candidates we examined, after becoming an active candidate in one of our search processes, 34% of women changed jobs relative to 27% of men. The trend was even more pronounced in the CEO and commercial functions. Among CEOs, 38% of women vs. 25% of men changed roles, while 46% of women vs. 23% of men changed roles for commercial functions.
What can we learn from this?
We believe there is an opportunity for companies to evolve their hiring processes to ensure they are attracting the best, most qualified executive for each role without the limitations of potential unintended biases. Here are a few recommendations:
- Evaluate and adjust candidate messaging from the start. How you communicate, beginning with the position description, experience requirements, and preferences, can inadvertently exclude highly qualified candidates. Ensure your messaging aligns with truly required experience and promotes exposure to a broader pool of qualified executives from more diverse backgrounds.
- Increasingly focus on referrals and references. It’s common to unintentionally allow one positive or negative impression to influence an overall candidate assessment. Instead, move beyond common credentials and focus heavily on referrals and references. This real-world information is often a better predictor of what a candidate can do for the business in the future rather than on what they have done in the past. This approach also helps reduce potential “on paper biases” around things like advanced degrees and academy company experience.
- Remember that career progression and wins matter. An unintended bias for certain educational background, professional experience, or career pathway may disqualify the best true “fit.” Focus more on how the executive got where they are in their career. What hurdles and obstacles did they encounter? What wins have they had and how do those translate to future success within your organization?
- Consider their motivation. Is the candidate truly ready for a new challenge, role, and opportunity or are they just testing the waters? Unintended biases towards certain responses, rationale, or stories does not always signal a motivated candidate. Ensuring a deep dive into motivation – both professional and personal – can ensure you get a truly motivated candidate in the role.
It is not easy. Unlike work experience and education, many of these factors that point to future success can’t be measured directly. That being said, as we’ve seen firsthand, finding the right candidate, regardless of how they look on paper, will be most impactful for organizations over the long run. To find the executive able to lead the next phase of growth, companies must re-examine their criteria and be more open-minded toward candidates that might not check every box on the traditional hiring process. The payoff will be worth it.
We’ll take a deeper look at these findings in a subsequent post. Are hiring managers recycling the same requirements and expecting a different result? What unconscious biases are influencing the decision to move forward with one candidate versus another and make the offer? Is new thinking needed? Like “Moneyball” in baseball, is the data showing us a roadmap to a more analytical approach that may yield better outcomes in a tight labor market?