Hiring a diverse team may not be as hard or expensive as we think

Referral programs are responsible for 1 of 3 hires — and can be the key to an organic diverse workforce

This week’s news brought yet another cautionary tale about what happens when companies deprioritize diversity. While we all claim that diversity matters, we put it on the backburner while we focus on revenue growth and product innovation.

However, a new report from Lightspeed Ventures about startup recruiting trends suggests that with a few simple recruiting practices, hiring for diversity might be easier than you think.

Unlocking the mystery of diversity hiring starts with a program that you’ll find at almost every startup, across all growth stages: the referral program.

The reality of startup recruiting: one third of hires come from referral programs

Referral programs are the second most common of all human resource programs, only after new hire onboarding, according to a new Lightspeed Venture Partners report on startup recruiting trends. 79% of all startups invest in referral programs, and 1 out of every 3 hires come from a referral.

Referral programs are the most pivotal element of a startup recruiting effort — if executed well.

At their best, referral programs are magical. One day a position opens and the next day the perfect candidate appears, because networks act like matchmakers to help candidates and companies find the best fit.

At their worst, referral programs end up in a mess of untracked data, with candidates slipping through the cracks, and a whole lot of room for subconscious biases.

At a diverse company, referrals will be diverse, but if a company isn’t diverse, the referrals aren’t likely to be. Diversity has to start on day one.

The reality of diversity: most diverse candidates come from outbound sourcing and employee referrals

The same Lightspeed Ventures report also found that startups across all growth stages source the majority of their diverse hires through a combination of employee referral programs, and good, old-fashioned cold outreach.

The report also reveals that only 4 percent of early stage and 6 percent of expansion stage startups have a recruiter dedicated to diversity hiring, while late stage startups do much better, with 44 percent having a dedicated diversity recruiter. This means that the number one source of diverse candidates is also incredibly unlikely to receive the investment and resources it requires to be successful.

Referral programs, on the other hand, receive significant attention and investment, and do a great job identifying diverse candidates. As the popularity of referral programs increases (LinkedIn, 2016), companies have an opportunity to rely on them as a source of diversity.

Four tactics to expand your diversity hiring program today

Hiring a diverse team requires a commitment, and in the long run it deserves investment and attention. But there are things every startup leader can do right now to take the first step toward growing a diverse team — and none of them are time-consuming or expensive.

1. Set a diversity hiring goal

As we learned from Pinterest last year, setting a diversity goal doesn’t mean we will hit it, but it does send an important signal to employees that diversity matters.

2. Find the Non-Homogenous Referrals

When we think of who to refer for a role, most of us scan our brains on the drive home or think about it while waiting in line for coffee. We end up identifying people that are top of mind, but we rarely find people that might have a unique background for the role. This is one of the problems we’re tackling at Drafted. Our community referral suggestion algorithms do the heavy lifting of scanning your collective networks and helping you shortlist people that are right for the role. Objective, technology-powered suggestions can surface people we may not think about off the top of our heads, and make us more conscious about biases we have.

3. Don’t let culture be a safe haven for unconscious bias

Culture is often seen as a way to reinforce our values. But, we can also use it as an opportunity to expand our networks. Instructing employees to grade candidates on culture fit can often equate to prioritizing people who fit our current mold, rather than expanding our mold to fit diverse people. If you have a process that grades culture fit, grade on clear, objective values so unconscious biases don’t creep in under the culture umbrella. You might be surprised at the proportion of people in your network that may not look like you but still grade highly on your core values.

4. Expand your referral program to your social and professional networks to build a community referral program

According to the LinkedIn 2016 report, Social and Professional networks account for about as many hires as employee referrals. In addition, 40% of referrals originate from sources outside your company. If you want more diverse referrals, you can get them by asking people who aren’t on your team but are still rooting for your company: your community.

It’s about values, not image

Hiring a diverse team isn’t just about avoiding media backlash…

It’s about taking a stand for what you believe in, and it’s about building a lasting and sustainable business that can outlast its founders’ lifetimes. Hiring people from different backgrounds and perspectives brings a wealth of varying ideas, expands the potential pool of candidates for recruitment, and empowers all teammates to understand a variety of employees, investors, customers, and partners.

Let’s all commit to making our teams more diverse.

To learn more about recruiting and HR trends in 2017, read the full report from Lightspeed Ventures: Startup Recruiting Trends.