Since the Civil Rights Act passed in 1964 — which criminalized discriminatory hiring (and firing) practices — there have been roughly 14,500 studies determining that a diverse workforce drives organizational success. One would think, by now, we would be in the advanced stages of attracting, growing, and retaining diverse talent.
Unfortunately, that is still far from reality.
Organizations of all sizes, operating in all industries, are struggling to achieve strong, diverse workplaces. Only 11% of executives in S&P 500 companies are from ethnic and racial minority groups, which is a mere 2% increase from the same numbers reported back in 2003. Furthermore, that percentage is 35 points less than the representation of the diverse ethnicities and races within the general population (The Alliance for Board Diversity, 2016; US Census Report, 2015).
Only 11% of executives in S&P 500 companies are from ethnic and racial minority groups, which is a mere 2% increase from the same numbers reported back in 2003. Women hold a meager 19% of senior corporate leadership positions, which is almost 32 points below equal representation, considering women make up more than half of the general population.
We see the same disparity when it comes to gender diversity in the workplace. Women hold a meager 19% of senior corporate leadership positions, which is almost 32 points below equal representation, considering women make up more than half of the general population. According to the World Economic Forum, if organizations continue with current rates of progress, it will be another 170 years before we bridge this workplace gender gap (WEF, 2016).
Not surprisingly, these low figures for women and racial minorities in leadership positions at America’s top companies are strikingly similar to the low rates seen in our own elected government officials. Our current U.S. Congress, which is the most diverse in history, is still barely half as diverse as it should be if we are looking for equal representation between leaders and the constituents they represent.
It is puzzling that there has been such slow progress, especially with the abundance of evidence on how improving workforce diversity – particularly at executive levels – can lead to enhanced innovation and a better overall financial performance for organizations.
In other words, companies with more diverse leadership teams had 73% higher revenue from new sources stemming from innovation.
In their 2017 study, Boston Consulting Group (BCG) found a significant correlation between the diversity of management teams and ‘innovation revenue’, which is defined as revenue from new products and services launched within the past three years. Specifically, companies with above-average diversity scores among their management teams reported a 45% average innovation revenue, whereas companies with below-average diversity scores averaged just 26% in innovation revenue. In other words, companies with more diverse leadership teams had 73% higher revenue from new sources stemming from innovation.
The same study concluded that organizations would see immediate value with even minor changes in the composition of their senior teams. BCG argued that every 2.5% increase of women in the leadership team could increase innovation revenue by 1 full percent. Also, a 1.5% increase in managers and executives whose country of origin is different from where the organization’s HQ is based would have the same impact. This projection is not additional headcount, but rather a change in the diversity makeup, so more diversity among just a few members of the leadership team could have a dramatic positive influence.
So, how can organizations accelerate the diversification of their workforce?
Driving an organizational diversity agenda is a collaborative effort, not a one function/leader responsibility. For an organization to successfully diversify its workforce, CEOs should ensure that diversity is an integral part of the companies’ vision. Functional leaders should also buy-in and sponsor effective diversity programs, while Human Resources teams orchestrate and execute efforts that bring these goals to life.
Within HR, the Talent Acquisition team plays a vital role in attracting, engaging, and hiring diverse talent to help the organization achieve what Deloitte referred to in their 2018 report as “integrated” levels of maturity. Deloitte argued that organizations are still at the “compliance” and “programmatic” levels, viewing diversity as a problem usually triggered by external pressure or mandates, and the outcomes do not usually go beyond awareness-building events and activities.
Fig 1. The Deloitte Diversity and Inclusion Maturity Model
In this article, we will focus on the Talent Acquisition professionals’ role in evolving the organization to the stage of real inclusion.
Even though they are the “talent gatekeepers”, most organizations are not actively engaging talent acquisition teams in driving the diversity agenda, according to Gartner (2010). Less than 50% of the surveyed organizations are viewing themselves as “good” at building a culture of diversity within the recruiting team. This was found to be partly due to the absence of recruiters’ accountability for achieving diversity goals, with no repercussions on recruiters’ performance when they miss their diversity goals. In the same study, Gartner found that when organizations held recruiters accountable for providing diverse shortlists and diversity hiring, the organizational effectiveness in achieving their diversity goals increased between 21% to 37%.
These realizations led Sodexo, a large French food services and facilities management company, to address the awareness and accountability issues by embedding diversity in day-to-day team conversations, dedicating time in weekly meetings to review diversity scorecards, providing updates on diversity hiring and shortlist outcomes, and sharing best practices in recruiting diverse talents (CLC, 2010).
Sodexo’s Talent Acquisition leaders managed to build their teams’ awareness about diversity and craft action plans to address areas of opportunities through addressing simple questions: Which groups/traits are not well-represented in the workforce? How can the recruiting team contribute to achieving the company’s diversity strategy? What are the key barriers that we are facing? Who are the most effective diversity champions in our organization, and what sets them apart?
Building recruiters’ awareness is a crucial starting point; however, with no real accountability, companies would not see a significant change in behavior. Accordingly, Sodexo tied 10-25% of the Talent Acquisition leaders’ bonus to the broader organizational diversity outcomes and linked the recruiter’s bonus to the diversity shortlisting goals. These actions pushed the talent acquisition team to become creative in how to attract diversity talents, and in a short period, they started to build a robust diversity pipeline through engaging with candidates as early as high school and throughout their education and professional careers.
Once the Talent Acquisition team establishes awareness and accountability, members should become the diversity hiring champions. Recruiters, through their daily interactions with various stakeholders, have a tremendous opportunity to drive the diversity agenda by reinforcing the case for diversity hiring and update business leaders through data and analytics on how their functions are progressing toward the organizational diversity goals. These insights can influence hiring managers to seek diverse candidates and allowing extra time to ensure that the shortlist is an accurate representation of most, if not, all potential minority groups.
Furthermore, sourcing and shortlisting individuals who appreciate differences and can work with diverse teams is as vital as hiring diverse talent — this what will lead to and sustain a healthy, inclusive workplace.
Does the organization have enough supply of diverse talents? Do the organizations’ interviewing practices eliminate unconscious bias? Does the organization have a strong reputation for being a diverse workplace? Those are some of the critical questions that Talent Acquisition leaders should track while they are trying to deliver on the company’s diversity agenda.
In the following section, we will discuss some of the tactics that Talent Acquisition leaders can adopt to overcome potential diversity sourcing, selection, and conversion challenges.
Refining inputs to the sourcing strategy can help increase the available supply of diversity prospects. For example, the largest national bank in South Africa found that by just adjusting job requirements to reflect “real” needs vs. hiring managers’ “perceived” needs, significantly improved the size of the diverse talent pool they can attract (CEB, 2016). Similarly, a study by the Harvard Business Review (2005) found that relaxing tenure requirements can improve gender diversity, given that 34-45% of qualified women in the workforce experience an extended interruption in their career compared to just 24% of qualified men. Relaxing degree requirements, on the other hand, can boost racial and ethnic diversity in the candidate pool based on the data from the US Bureau of Labor Statistics (2014).
Another strategy Talent Acquisition professionals can adopt is to influence hiring managers to consider adjacent degrees/experiences and non-traditional backgrounds. This approach has proven to help with gender diversity since STEM graduation rates for females are disproportionally low compared to non-STEM graduates, according to the National Center for Education Statistics report of 2015-16. Also, the more recruiters become knowledgeable about adjacent skills and how some technical skills feed into more extensive skill taxonomies, can help them recognize talent pools that are not initially obvious. If considering adjacent skills, the critical talent differentiator will then be the candidates’ ‘learnability’ versus whether they have experience with a specific process or task.
Additionally, talent acquisition professionals should start engaging with talent on social media through channels most frequently used by their target candidate, not merely by channel popularity. For example, research by Gartner in 2016 states that only 13% of candidates maintain a profile on CareerBuilder (number 9 in the top 10 career platforms). By looking at the user mix, one will find out that 27% of CareerBuilder’s active users are African Americans, making it rational to leverage if a company is looking to attract more people of color. Local social channels like WeChat in China, 1Job in the UK, and Cadremploi in France should not be overlooked, given the amount of talent who actively use these platforms. It’s typically beneficial to engage sources where the job-seeking candidates are more diverse than the general population.
One example of unconscious bias we routinely see is how a candidate’s last name, which implies their ethnic background, can…reduce the possibility of receiving a call back by…50% in the U.S.
One of the key reasons why companies lose out on diverse talent is ‘unconscious bias’, which can have detrimental effects on the diversity hiring process. According to Dr. Agarwal of Forbes, Unconscious Bias or Implicit Bias was first introduced in 2006 as “the new science of unconscious mental processes that has a substantial bearing on discrimination law.” This challenged the longstanding credence that we are guided only by explicit beliefs and by our conscious intentions (Forbes, 2019).
One example we routinely see is how a candidate’s last name, which implies their ethnic background, can adversely affect their chances of landing a job. Studies show that the last name appearing on a candidate’s resume can reduce the possibility of receiving a call back by 25% in Germany, 29% in Sweden and UK, and 50% in the U.S. (Wood, 2009; Carlsson & Rooth, 2007; Bertrand, & Mullainathan, 2004).
In order to address unconscious biases, some companies started to mask candidate demographics while presenting them to the hiring team to shift the focus from ethnicity to experience and skills. A large Utility company in the US started exposing candidates to a broader range of interviewers through multiple, short interviews instead of more extended interviews with fewer leaders. By doing so, they decreased the chances of a single, biased assessor exerting such a significant influence over a hiring decision. Moreover, the added benefit was the organization being able to showcase a more diverse selection team to all new hires (CEB, 2016).
Winning over diverse candidates goes beyond locating them and ensuring they are treated fairly during the hiring process. Such candidates have unique values and expectations of their future employers, as highlighted in CEB’s global labor market survey in 2016. While white candidates are more attracted to organizations that provide job-interest alignment and more generous compensation schemes, diversity job seekers, on the other hand, look for career opportunities in an inclusive environment. Around 25% of ethnically diverse candidates seek information about workforce demographics and diversity role models within the organizations they are considering.
To win diversity talent, companies should demonstrate the authenticity of their employer brand by leveraging their career site and social media channels and by showing how diverse and inclusive they are through their employees and resource groups.
Around 25% of ethnically diverse candidates seek information about workforce demographics and diversity role models within the organizations they are considering.
Additionally, recruiters can play a role in reinforcing these messages through:
Having a diverse workplace is integral to the success of any company, and while diversity is the responsibility of everyone within the organization, HR and Talent Acquisition teams play a particularly critical role by sourcing, engaging, and eventually hiring diverse candidates. Engaged recruiters have the opportunity to champion diversity and make it an everyday dialogue with hiring managers. They are responsible for ensuring all candidates are treated fairly and equally in a bias-free process, and they are the first step in demonstrating how the organization appreciates and celebrates its diverse employees.
Talent Acquisition brings to life how diversity and inclusion is not just a program, but rather a set of values integral to the organization.
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