6 Signs Your Organization Needs a Chief Diversity Officer

In 2023, 53% of Fortune 500 companies have a Chief Diversity Officer (CDO). 

However, the hiring rate for CDOs fell by 4.5% in 2022 and appears to have continued this downward trend in 2023. 

There are several reasons for this. The primary one is that Diversity, Equity, Inclusion, and Belonging (DEIB) and Environmental, Social, and Governance (ESG) departments are typically the first to suffer when companies need to cut funding or, in this case, reduce executive positions.  

But organizations need to consider more than just immediate costs if they aim for long-term profitability, employee engagement, ease of acquiring and retaining top talent, and increased innovation.  

Your Company Needs a Chief Diversity Officer If...

1. Your leadership is not diverse

The lack of diversity in the C-suite is an ongoing issue. Only 26% of C-suite executives are women. Companies that are not diverse essentially accept lower profitability than their more diversified rivals. In fact, companies with more than 30% female leaders outperform those with a less diversified C-suite. 

Ethnic diversity is rare in far too many C-suites, too. In 2022, only six of the Fortune 500 companies had a Black Chief Executive Officer (CEO) – that’s only 1.2% of Fortune 500 companies. And to make matters worse, in most C-suites, only 5% of executives are women of color. 

In terms of profit, companies in the top quartile for ethnic diversity in their C-suites beat those in the fourth quartile by 36%.  

So, take a good look at your executive team. You’ve got a problem if everyone in it looks the same. This is exactly the type of problem that a CDO can help solve. 

2. Your HR department regularly has to deal with discrimination or harassment issues

Over half of employees report experiencing discrimination from their current employer. And sadly, almost 23% of workers have experienced violence or harassment at work.  

Discrimination and harassment often result from conscious or unconscious biases. 

If your human resources department is routinely dealing with discrimination or harassment complaints, it may be time for some introspection. A CDO can help you address both issues effectively. 

3. You’re struggling to attract a diverse range of new hires and promotions

It should come as no surprise that a company’s lack of diversity might discourage candidates from applying for available opportunities. In fact, more than three-quarters of job seekers say they take the company’s diversity into account when evaluating a job offer. 

Given the disparities in the C-suite, it is not unreasonable to assume that minorities and women are disproportionately passed over for promotions too. 

The impression you send by not actively assisting the minority members of your team with career advancement and development is one of apathy toward minority groups. This, in turn, affects your capacity to attract talent for entry-level positions up to the C-level. 

If you’re encountering difficulty in recruitment or if you’ve observed a certain homogeneity in promotions within your company, it might be time to consider appointing a CDO. 

4. Your turnover rate is high

It should come as no surprise that workers are more inclined to remain with a company over the long term if they have a feeling of belonging and can see themselves progressing professionally. 

It doesn’t take a rocket scientist to anticipate an employee’s next step when they feel excluded, mistreated, discriminated against, or that they have no possibility of advancement: they’ll leave for greener pastures. 

As a result, if your business struggles with a high staff turnover rate and you’re not sure why, it might be because of a lack of DEIB.  

If your business is experiencing this, it’s time to hire a CDO. They can get to the bottom of the matter and help ensure your company becomes an employer of choice once again. 

5. Your attempts at innovation have stalled or failed 

If you’re trying to enhance your offerings, restructure your organization, streamline your processes or procedures, or improve your client experience through innovation, but you’re falling short, it could be due to a lack of diversity of thought within your team. Diversity of thought is essential for genuine innovation.  

Companies with above-average diversity generate 19% more revenue from innovation compared to those with below-average diversity.  

Therefore, if your goal is to be a trailblazer, disruptor, and innovator, it might be time to bring a CDO on board. 

6. Your competitors are outperforming you

Take a good look at your competitors. Are they raking in more profits while you’re left wondering why? It might be as a result of their commitment to DEIB.  

The likelihood of outperforming the industry average is 15% higher for businesses in the top quartile for gender diversity. 

Plus, diversity has advantages for everyone, from the bottom up to the C-suite. For instance, in the US, earnings before interest and tax (EBIT) increase by 0.8% for every 10% increase in the diversity of the C-level team. Similarly, in the UK, EBIT increases by 3.5% for every 10% increase in the diversity of the C-level staff.  

It may be time to collaborate with a CDO if you want to surpass your competitors. 

Where to Find a Top Chief Diversity Officer

If you’ve realized that your company is being left behind because it’s not diverse, inclusive, or equitable enough, you may want to start the executive search process to find a CDO.  

You need a CDO with the qualifications, experience, and skills to make the investment worthwhile; someone who can start bringing value to your organization from day one. 

You need a CDO with the qualifications, experience, and skills to make the investment worthwhile; someone who can start bringing value to your organization from day one.

That’s where global executive search firms and executive recruiters like Stanton Chase come in handy.  

We’ve been recruiting top global talent for decades. We know exactly the capabilities and skills that signal success. And with a reach of more than 70 offices worldwide, we can search the globe for your ideal CDO. 

So, if you want to ramp up your profitability, increase your innovation, create a happier and healthier workplace, retain your top talent, and attract the best of the best, it’s time to get in touch. Click here to reach out to one of our consultants. 

About the Authors 

Mala Chawla is Stanton Chase’s Global Leader for Diversity, Equity, Inclusion, and Belonging. She is a trained Civil Engineer, and she puts her engineering degree to good use by understanding and resolving leadership challenges for her clients. 

In 2004, Mala transitioned into recruiting and joined Adecco India, which is part of one of the world’s largest recruitment firms. 

Later, she had a 12-year stint at the ABC Consultants group, where she worked at their offices in Delhi, Kolkata, and Mumbai. She was a founding member of their headhunting arm called CHC. 

When CHC merged with Stanton Chase, she became a part of the Stanton Chase network and was later handpicked by the global board to become a Partner and shareholder first in India, and then in Singapore. 

Iris Drayton-Spann serves as a Managing Director at Stanton Chase Washington, D.C.  

Prior to joining Stanton Chase, Iris was the Vice President of Human Resources and Chief Diversity Officer at WETA-TV, one of the largest producers of new content for public television in the United States. At WETA, Iris also led the Diversity, Equity, and Inclusion (DEI) Council. 

Iris holds a master’s in education from George Washington University and a bachelor’s in communication from Howard University. In 2019 and 2021, she was voted one of DCA Live’s 25 HR Leaders of the Year in Washington, D.C. In 2021, she was recognized as one of Mogul’s Top 100 DEI Leaders, and in 2022, she was named one of CIO Views Magazine’s Top 10 Most Influential D&I Leaders.