This informal CPD article ‘Nurturing Diverse Talent Pipelines for Sustainable Success’ was provided by Hanover Search Group, an organisation with deep functional knowledge of asset and wealth management, banking, fintech, healthcare & wellness, insurance, private equity, technology and professional services.
The Diversity Drop-Off: Where Organisations Are Losing Talent
Many businesses acknowledge the importance of diverse leadership but continue to struggle with retaining and progressing underrepresented talent. While recruitment efforts may be improving, research shows that diverse talent enters organisations at a strong rate but tends to drop off as you go up the hierarchical ladder (1). And despite concerted efforts to address diverse representation at the most senior levels, there’s still some work to be done (2). This means organisations are not fully leveraging the potential of their internal talent.
Additionally, diverse employees often face more systemic headwinds, such as bias in performance evaluations, limited access to sponsorship, and cultural barriers, that can stall or derail their career progression (3). Without intentional support, these challenges can reinforce disparities in leadership representation.
Key headwinds also include:
- Lack of Sponsorship & Visibility: Underrepresented talent often lacks access to influential networks and senior sponsorship, limiting progression opportunities.
- Bias in Promotion & Performance Evaluations: Traditional leadership assessments may favour those who ‘fit the mould’ rather than those with high potential from different backgrounds.
- Non-Inclusive Leadership Development: Development initiatives may not be designed with diverse career journeys in mind, unintentionally disadvantaging certain groups.
- Workplace Culture & Psychological Safety: Employees who do not feel included or valued are less likely to stay and thrive within an organisation.
To create meaningful change, businesses must move beyond traditional approaches and rethink how leadership potential is developed and supported.
Rethinking How We Develop Leaders
Organisations need to shift from passive encouragement to active investment in their diverse talent pipeline. Traditional leadership models often reward those who demonstrate confidence and self-promotion - qualities that may be influenced by cultural or systemic factors - rather than focusing on true capability and potential. A sustainable approach requires a shift towards:
- Skills-Based Leadership Development: Moving beyond rigid career trajectories to a more dynamic, capability-driven model of leadership.
- Bias-Free Assessment & Progression Criteria: Reviewing and redesigning performance evaluations to ensure fairness and inclusivity.
- Embedding Inclusion into Leadership Training: Ensuring that leadership development programmes equip all managers and leaders with the skills to create inclusive teams and sponsor diverse talent.
