Don’t Let Chief Diversity Officer Be a Dead-End Job

The events of the last 12 months have triggered something of a roller-coaster effect for diversity leadership in corporations across the country — a sudden plunge followed by an even sharper, equally sudden spike.

When the Covid-19 pandemic first set in, businesses started shedding jobs focused on diversity and inclusion (D&I). Data from Glassdoor found that U.S. job postings in the space dropped by a whopping 60% from March to June — about double the drop of overall job openings, and more than other HR jobs.

But the summer’s racial justice protests turned that around. Job postings for diversity and inclusion shot up well past their previous levels. By August, they were more than 40% higher than where they’d been in January. 

That increase is more in line with longer-term trends. LinkedIn shows the number of people holding the title “head of diversity” in the U.S. has doubled since 2015, while positions titled “director of diversity” and “chief diversity officer” have gone up 75% and 68% respectively. And in the UK, D&I roles have jumped 58%, one fifth of them leadership positions.

On the surface, this is welcome news. C-suites have gotten the message that long-standing inequalities need to be addressed, and that people are watching. There can be tremendous benefits to a company having a point person whose role it is to champion diversity and inclusion initiatives. 

Of course, that point person can only bring about change when the company provides resources and buy-in to support those initiatives. Far too often, that doesn’t happen. 

But while the problem of resource-starved D&I initiatives has gotten a fair amount of attention, there’s another problem that’s been largely ignored: When leaders take jobs overseeing diversity efforts, they step away from potential pathways to higher positions in the company — and they become much more likely to leave within just a few years. The company loses a potential future CEO.

Since many heads of diversity are people of color, the result is damaging: A person of color who might have become chief executive loses their place in the talent pipeline.

An analysis of chief diversity officers by the executive recruiting firm Russell Reynold Associates sheds light on this problem. In hiring for these posts, companies often turn to people with experience in Human Resources, but many also have backgrounds in marketing, sales, learning and development, organizational development and more. (While the analysis does not show how many CDOs are people of color, a glance through LinkedIn shows that they very often are. In fact, the phenomenon is so widespread it prompted a satirical article headlined, “Company Names Only Black Employee ‘Chief Diversity Officer’ Without Asking Him.”)

Turnover in these roles is especially high. The average tenure is only three years — compared to nearly  5 years for chief financial officers. Without the resources to fulfill their goals and too often siloed away from the company’s business strategy, diversity leaders often hit a dead end. I’ve worked with some who’ve been blamed for the company’s failures to achieve D&I goals, and others who find the job so stressful they end up leaving the company.

With such short tenure, they lose the chance to achieve higher roles. People who become CEOs first hold a single director role for an average of six years, a LinkedIn analysis found. Also, D&I is generally lumped in with HR — and when choosing a CEO, boards tend not to consider HR leaders, studies have found.

To solve this, businesses need to do more than just provide adequate funding and resources to help diversity leaders succeed. They need to change how they judge and treat people who hold these positions.

First, ensure that D&I is central to the overall business strategy. To help make this happen, some companies have the CDO report directly to the CEO and board chairman rather than to the CHRO.

Structure the role to ensure multi-party accountability. One person cannot push this boulder up the hill alone. D&I goals need to be integral to how leaders across the company are judged. This could include hiring quotas for recruiters and HR; promotion and retention targets for managers; and lower bonuses for senior executives if the company falls short.

Every unit should have part of its budget dedicated to D&I efforts. At the end of the year, make each unit demonstrate the ROI of that portion of its funding in order to justify receiving it again for the next year. The CDO should help guide and set parameters for all these initiatives through coordination, but the units themselves have to show their own successes in spending wisely and strategically.

Be sure diversity leaders get to share the credit for corporate successes. When D&I leaders succeed, revenues go up — but it’s usually the sales directors, COOs and CFOs who get the recognition. At some companies I’ve worked with, diversity leaders are publicly praised for their contributions to financial metrics in annual reports, shareholder updates and corporate events. Those diversity leaders are much more likely to stay.

When it’s time to hire a new CEO, be sure to consider the CDO for the top spot. We’ve already seen a corporate CEO “become” the chief diversity officer, with Nielsen’s David Kelly taking on the title in addition to his other duties. Now we need to see corporations do the opposite: put their existing, successful CDO in charge of the company. When this happens, everyone will see that it’s possible.

Businesses also need to think twice about whom they choose for these positions. The chief diversity officer post may seem like a terrific promotion for a promising person of color who has shown great leadership skills. But promoting them within their field of established expertise, rather than tossing them into a different discipline, may be a better move all around. 

If corporations do this right, they’ll create stronger, more successful diversity initiatives led by experts who last — and create change that lasts, too.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Denise Hamilton is the CEO and founder of WatchHerWork. She is the author of "Do Something: An Ally’s Guide to Changing Themselves So They Can Change the World."

©2021 Bloomberg L.P.

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