How to ensure inclusive hiring beyond senior management

Research co-authored by Lionel Paolella, Associate Professor in Strategy & Organisation at Cambridge Judge Business School, has some sobering conclusions – but also some rays of hope.

The research by Lionel finds that law firms that increase the number of women in the most senior positions inadvertently neglect the recruitment of women at lower levels – perhaps because the firm decides it has done enough rather than devote more resources to signal diversity to stakeholders.

“There are unintended consequences of a narrow focus on increasing gender diversity at the top, often in response to external pressure from clients and others concerned about public opinion,” says Lionel. “We find that this is most likely if diversity at the top is disconnected to what we believe should be a holistic approach to diversity throughout an organisation.”

Unintended consequences of diversity practices in male-oriented industries

An earlier version of the research focused on how law firms use ’organisational licensing’ through the hiring of some senior women to avoid hiring more women throughout the firm, which creates an illusion of fairness through a good deed. The focus has since evolved into a greater emphasis on how these consequences can be addressed through women’s representation on key committees.

While the research focuses on law firms, the authors say that the lessons extend to other male-oriented industries such as finance and accounting: how a firm’s relative success (compared to industry peers) in a highly visible diversity metric such as women senior managers, can unintentionally reduce the organisation’s attention to diversity issues at lower levels – with ’organisational attention’ defined in prior research as “the distinct focus of time and effort by the firm on a particular set of issues, problems, opportunities, and threats, and on a particular set of skills, routines, programmes, projects, and procedures”.

Looked at in another way: the inadvertent lack of job offers to women at lower levels is driven by reduced attention paid to internal diversity practices, which is in turn driven by complacency caused by a firm deciding that hiring a few women for top jobs shows satisfactory progress toward diversity.

“As such, they may allocate fewer resources and less time and effort to internal diversity practices,” says the research by Lionel and colleagues. “Firms allocating fewer resources and less time to diversity practices signal to their predominantly male managers that additional efforts to diversify the workforce are unnecessary.”

The research’s proposed substantive involvement of women on diversity and hiring committees is described as a ‘moderated mediation model’ that highlights an underlying mechanism – a firm’s engagement with its internal diversity practices – which the authors say is a “critical boundary condition” for the inadvertent consequences of hiring a few women for top roles.

Lionel’s research makes 3 key contributions to the academic literature in this area:

• the ‘attention-based’ view of firms through a practice lens of organisational attention
• the research on unintended consequences of diversity practices
• the limited body of literature on processes that disrupt gender inequality, through the research’s proposed “practical solution to the unintended adverse effect of changing demographics at the top”.

The authors say their findings have implications for other types of inequality such as lack of racial diversity, and suggest that further research could look at whether appointing to top posts some members of underrepresented communities also translates into a lack of organisation-wide diversity.

4 key reasons hiring top female executives doesn’t guarantee firm-wide diversity

One might think that women appointed to top roles at law firms could use those roles to achieve greater firm-wide diversity, but the research by Lionel points out why this often does not occur: managing clients and bringing in revenue are the measures by which such senior women are evaluated.

“Shaping the firm’s internal diversity practices would require senior women to engage in discretionary, effortful, and time-consuming extra-role behaviours that are typically neither specified in advance by formal role prescriptions nor recognised by the firm’s reward and compensation systems,” the research says. “To stay competitive, they cannot fully allocate their time and attention to engage in diversity-related tasks that are not valued for promotability.”

Boosting company inclusivity through female representation

The silver lining in Lionel’s research is that there are ways for law firms to mitigate this danger to firm-wide diversity: ensuring significant representation by women on committees charged with overseeing and monitoring the firm’s diversity practices and hiring-related processes, which are often handled by 2 different panels in law firms and other large organisations.

“These committees can play a critical role in ensuring that diversity is seen as a firm-wide priority at every level, and we conclude that having significant representation by women on these committees helps ensure that this message is heard and implemented throughout the firm,” says Lionel, whose previous research on law firms has looked at such issues as the competitive advantage for law firms that span various categories of speciality.

The research on law firm diversity, published in the Academy of Management Journal, draws on a dataset of the 250 largest US law firms over a 9-year period, using as the primary source the annual Vault/Minority Corporate Counsel Association Annual Law Firm Diversity Survey. The research finds that women comprise less than 20% of partners and less than 35% of senior positions at many firms.

The study is dedicated to “the memory of our co-author and cherished friend”, the late Professor Sucheta Nadkarni of Cambridge Judge, who worked with Lionel and others on the research prior to her untimely death in 2019.

Women are needed on both diversity and hiring committees

“Although these separate committees have slightly different core mandates and priorities, their goals and responsibilities toward hiring women are mostly intertwined and interrelated”, the research finds. “While the diversity committee oversees, monitors, and recommends the firm’s hiring and diversity programmes and promotes diversity through accountability, the hiring committee eventually makes the recruitment decisions that impact women’s representation within the firm. These 2 committees work in tandem to efficiently execute and implement the firm’s diversity and hiring practices and advance the recruitment and selection of women.”

3 insights on how women on diversity committees affect firms