Towards the end of 2020, Fortune Magazine announced that the publication would consider a new metric in their ranking of the 2021 Fortune 500 list: diversity and inclusion. This announcement follows on the heels of similar commitments by major companies to improve diversity by specific targets.
“Target said in September it will aim to increase the representation of Black employees in its workforce by 20% over three years; PepsiCo said it plans to increase Black representation in U.S. managerial roles by 30% and Hispanic representation by 10% by 2025,” reported HR Dive.
Companies of all sizes are realizing that diversity is no longer just a moral imperative. Employees favor diverse organizations over their homogenous competitors; innovation depends on the viewpoints of many; and higher profit follows where companies diversify their leadership teams.
Diversity hiring will become a priority for businesses in 2021 — here’s what that means, and how your organization can start to make a positive impact toward hiring underrepresented groups and building a culture of inclusivity.
What is diversity hiring?
Diversity hiring refers to a recruitment and hiring process that is unencumbered by biases related to a candidate’s age, race, gender, religion, sexual orientation, and other characteristics that have no bearing on their talent or job performance.
Hiring for diversity and inclusion sets out to overcome the unconscious biases –– learned stereotypes that are automatic, unintentional, and deeply ingrained within our beliefs –– that cause us to form an opinion about a candidate based exclusively on first impressions. Unconscious bias can be found in all aspects of the recruitment process and prevents companies from realizing the many benefits of building a diverse workforce.
Diversity is a broad term and encompasses a wide range of traits beyond race or gender. A diverse workforce has a range of origins, education, experience, personalities, physical abilities, lifestyles, and skills. When we talk about diversity hiring, we’re referring to a recruiting process that values merit and offers a fair assessment of all candidates.
What is the difference between diversity and inclusion?
The terms diversity and inclusion often appear together, but they are not the same thing. Diversity refers to the “what” and inclusion is the “how.” Diversity is all about creating a workforce of employees from different backgrounds. Inclusion is a measure of the culture that empowers this workforce to be successful.
Another way to think about diversity and inclusion is through the lifecycle of an employee at your company. Diversity particularly relates to the realm of recruitment, as it determines who gets a seat at the table –– who gets hired, who gets promoted, who contributes to the growth and success of your business.
Inclusion plays a significant role in talent retention. Inclusivity is manifested in the policies and procedures that your company creates to make everyone in the workplace feel valued. “Now that you have a diverse array of employees walking through your front door, what steps do you need to take to ensure they have an equal opportunity to impact your business?” wrote the experts at Capterra.
Diversity and inclusion work hand-in-hand to ensure your business is growing sustainably and profitably. And, it all starts with your hiring process.
Why is diversity hiring important?
Not only is building a diverse workforce the right thing to do, but it’s also a great way to improve your business results. “Diverse and inclusive businesses outperform their homogeneous competitors in innovation, employee retention, talent recruitment, profit, and many other business metrics that lead to long-term growth,” reported the US Chamber of Commerce.
Diversity and inclusion initiatives contribute to an overall better experience for your team — and your shareholders. Consider some of these metrics:
- Diverse teams outperform non-diverse ones by 35%.
- 57% of employees think their companies should be more diverse.
- 67% of job seekers factor in workplace diversity when considering applying to a company.
- Companies with greater than 30% female executives were more likely to outperform those with 10% – 30% women executives.
- Companies in the top 25% for ethnic and cultural diversity were 36% more profitable than those in the bottom 25%.
- Companies with above-average diversity achieved 19% higher innovation revenues.
- The national GDP would increase $25 billion if just 1% more disabled people were hired.
Greater diversity in the workplace benefits not only businesses, but society at large. Increasing diversity at your organization starts with understanding the legal parameters for intentionally hiring minorities and other underrepresented groups.
Is diversity hiring legal?
Yes, diversity hiring is legal –– when done properly. Legislation, including the Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and the Americans with Disabilities Act, safeguard the rights of people in protected classes from discriminatory hiring practices. Likewise, the Equal Employment Opportunity Commission was established to ensure that hiring is done without regard to race, color, religion, sex, national origin, age, or disability – but also to promote diversity in the workplace.
Many business owners and recruiters fear that ‘hiring for diversity’ is somehow racist or discriminatory. What they’re concerned with is usually reverse discrimination. So, where is the line between reverse discrimination and diversity hiring?
“All other things being equal between two candidates, a choice can be made to recruit, hire or promote a member of a protected class over one who is not,” said one law firm. “The issue of reverse discrimination arises when there is a difference in the qualities or qualifications of the candidates, and the protected member is favored solely (or primarily) based on that person’s status as a member of a protected class.”
As such, it is legal to set inclusion goals for your diversity hiring, according to the ACLU. Be careful with how you phrase these goals and avoid setting rigid quotas, such as “we need to hire ten women to our accounting department.”
Inclusion targets should be designed to remedy a protected group’s past barriers to opportunity. Reserving a certain number of places in an executive training program for minority employees until the senior leadership team is more representative of their customer base or local labor force is one example of a legal inclusion goal.
Is diversity more important than ability?
This question is common among business leaders, but sets up an unfortunate dichotomy between diversity and ability. The reality is that both diversity and ability are important, and these goals are not mutually exclusive.
“Most people assume that workplace diversity is about increasing racial, national, gender, or class representation—in other words, recruiting and retaining more people from traditionally underrepresented ‘identity groups,’” explained Harvard Business Review.
“Diversity should be understood as the varied perspectives and approaches to work that members of different identity groups bring….They bring different, important, and competitively relevant knowledge and perspectives about how to actually do work—how to design processes, reach goals, frame tasks, create effective teams, communicate ideas, and lead.”
Capturing the true benefit of a diverse workforce means not just hiring someone for their background, but also their experience, ability, and perspective. Diversity hiring allows you to bring a range of abilities and skill sets that may have previously been untapped in a homogeneous group of employees.
How to build a diversity and inclusion strategy
SHRM recommends four phases of building a diversity and inclusion strategy, starting with evaluating your current position. Through surveys and HR records, establish your baseline for what your current workforce looks like, demographically. Compare this data to the labor market to see if there are any inequities.
“Nontraditional differences such as personality traits or life experiences can also be measured,” says SHRM. “Employers can conduct personality testing of the workforce or include open-ended questions on employee surveys to collect information regarding life experiences or other information employees may want to share about themselves.”
From there, identify areas in which your hiring needs to improve. Go a step beyond demographic differences to see how employees rate the inclusivity of your company culture. Small things, like only celebrating Christmas and other Christian holidays, can unintentionally send your employees a message about how accepting or inclusive your workspace really is. You may need a third-party to help provide an unbiased assessment of your current culture.
Next, work on improving – or creating – your company’s diversity and inclusion statement. Much like a mission and values statement, a D&I statement goes beyond paying lip service to these important areas and guides your hiring, employee benefits, customer service, and workplace culture. Many businesses use their D&I statement to build an action plan for how they will embrace and improve diversity over 90-days, one year, three years, and beyond.
“Examples of DE&I initiatives are changes in policies and practices, staff training, targeted recruiting, and employer-sponsored DE&I awareness events for employees,” says SHRM
The US Chamber of Commerce also recommends setting up a Diversity Council or empowering a Diversity Champion to educate, celebrate, and audit your business practices. “Look into creating employee resource groups or affinity groups, or implement an inclusivity training curriculum. Start at the very foundation of your business and examine pay parity practices and diversity in leadership, which both may take time but are critical to long-term inclusivity,” said the US Chamber blog, CO– .
Every business will have a different strategy for improving diversity and setting diversity hiring goals, but examining your hiring practices is a great place to start.
How do you increase diversity?
There are opportunities to improve the diversity of your workforce at every stage of the hiring process. Starting with your employer branding and extending all the way to increasing your employee retention rates, there are multiple opportunities to reap the benefits of a more diverse, inclusive company. Start by getting buy-in from your senior executives.
Get commitment from leadership
Steadfast leadership is one of the most important factors in building an enduring culture of diversity and inclusion.
“Successful hiring for diversity goes beyond HR strategies or affirmative action plan goals. It has to be a leadership and cultural mindset that welcomes and leverages diverse viewpoints and experiences in candidates. The goal, in that case, is to broaden the horizons of organizational leadership to be aware of their own unconscious biases in hiring and inculcate respect for those not similar to them,” writes one expert in Forbes.
Leadership ensures diverse candidates join an organization –– but that they stay for years to come. A survey by Deloitte found that 23% of employees had left their job for companies with more inclusive work cultures.
Microaggressions, unconscious bias, exclusion, and outright discrimination can force diverse employees to leave. In addition to high turnover costs, that loss of talent also decreases morale and stifles innovation. It’s the responsibility of leadership to make sure once the recruiting and hiring practices are in place, the company culture encourages diverse employees to thrive.
Revamp your candidate sourcing
To find diverse candidates, you must look beyond the traditional sourcing methods your company typically utilizes. This means sourcing candidates from places outside your careers site and LinkedIn. Try collaborating with a university or affinity organization to shape your job search. Some other options:
- Reach out to diversity associations at universities
- Attend diversity-focused job fairs
- Use “terms like ‘employee resource group’ and ‘ERG’ in your Boolean search strings, along with phrases related to different types of diversity-focused networks”
- Partner with nonprofits like the Urban League, the National Council of La Raza, or a diversity-focused job site.
Google Hiring also recommends expanding “points of entry” at your company by offering more paid internships, rotational programs, and contract work opportunities. By providing more opportunities – and focusing on inclusivity as you hire for these new roles – you can foster a culture of diversity and grow your talent pool with intention.
Likewise, employee referrals remain one of the best ways to find and retain talent. Candidates who have been recommended by existing employees have high applicant-to-hire conversion rates and higher retention rates. Encourage your existing employees to become team ambassadors. Incentivize diverse employee referrals.
As the data shows, job seekers are paying close attention to the diversity of your workforce. Talk about what you’re doing to create an inclusive office environment in your employer branding. Highlight benefits like paid paternity leave, or flex time off, or executive training programs for underrepresented groups.
In the beginning, focus your diversity hiring on leadership roles. Talent attracts talent: when you bring in a high-profile leader, you also gain access to their network and can leverage their reputation.
Check your job descriptions
The way you write a job description sends certain signals that can unintentionally discourage diverse candidates from applying. For example, words like “strong” and “competitive” deter female candidates from applying. These words are perceived as male-specific. By the same token, terms like “sensitive” prevent male candidates from submitting an application.
Make your job descriptions gender-neutral to ensure you are recruiting a diverse candidate pool of talented applicants. The free sourcing tool The Gender Decoder can help you strip biased words from your job description.
Likewise, many companies send out job descriptions with an exhaustive list of “required” skills needed to fulfill the open role. A 2017 Allegis Group talent acquisition study revealed that only 28% of hiring managers expect candidates to meet every qualification listed. Listing every qualification under the sun may intimidate candidates who would be a good fit from applying.
The stat that men apply for a job when they meet only 60% of the qualifications, but women will only apply if they meet 100% of them is cited frequently. Bottom line: only list those required skills that are most necessary to do the job in order to attract a wider range of applicants.
Integrate merit-based skill-testing
Instead of hiring for “culture fit” – a nebulous term that often feeds into inherent bias in recruiting – focus your process on uncovering a candidate’s capabilities. Replace resume screening with an on-the-job simulation like Vervoe’s skills assessments software. Customize each skill test with questions and assessments that mimic the tasks required from the new hire. This assessment style allows candidates to perform tasks relevant to the job they’ve applied for and showcase their abilities in the process.
Take it a step further, and use an AI diversity recruiting software to screen the results of a skill test rather than having a recruiter rank candidates for the next round. A recruiter might see hundreds of resumes for a single open position. At that volume, there’s no way one person can give each application the careful consideration it deserves. This screening process leads many recruiters to simply select candidates whose backgrounds seem most familiar or similar to theirs.
Instead, feed a merit-based, automated ranking tool data from the skills test. Vervoe’s smart algorithm doesn’t eliminate anyone; candidates are ranked for the interview stage, so recruiters receive a list of the top candidates after their qualifications have been validated.
Be inclusive in your interviewing
As you shift the focus from a list of qualifications to a true assessment of a candidate’s skills, so should you reconsider who is overseeing the next phases of the hiring process. “Don’t leave interviewing to a single person. Instead, include other people from your company, especially your diverse employees. Listening to different perspectives from different people will improve the fairness and quality of your hiring process,” recommends TalentLyft.
Ask your employees for feedback on job descriptions, interview questions, and other application materials. Get leadership involved to make sure employees across the board recognize the value in a diverse workplace. When managers understand the benefits of inclusive hiring, they can devote time and resources to making sure the team is fully committed to bringing on the best talent.
How do you retain diverse talent?
It’s no secret that company culture is a critical factor in employee retention. One study found that staff turnover attributed to poor company culture costs the economy £23.6 billion per year. However, there’s a misconception that company culture relates to perks like free coffee and Casual Fridays. The reality is that employee retention depends on inclusivity — a workplace that makes employees of all backgrounds feel accepted.
“The key to inclusion is understanding who your employees really are,” reported Harvard Business Review. The goal should be to create an environment where your employees’ unique talents and perspectives are valued. Focus groups, one-on-one conversations, and qualitative surveys can all help you understand what minority groups need to feel included in your company culture.
Rare, a Google product, has found that tangible things like mentorship programs, Employee Resource Groups (ERGs), and pay equity also play a significant role in retaining employee diversity. Among their recommendations is to include “reverse mentoring” by employees from diverse groups, as well as gender-neutral parental leave policies and training for managers to spot obstacles like imposter syndrome. Ultimately, improving diverse employee retention involves holistically redesigning work processes to maximize the contribution of diverse employees and allow everyone to reap the benefits of a more inclusive perspective.
How to measure diversity hiring
Key performance indicators are vital to understanding your progress toward improving diversity and inclusion — particularly in your hiring process. Metrics help uproot hidden biases and mindsets that promote homogeneity and hinder diverse employee retention.
Part of your diversity and inclusion strategy should involve establishing a baseline against which to measure your initiatives’ progress. Here are a few metrics to help you assess your diversity hiring:
- Representation: compare the percentage of employees from specific identity groups to the labor market or industry benchmarks
- Retention: compare the average tenure of employees from specific identity groups to the average tenure across the workforce or to the average tenure of employees from the dominant group.
- Recruitment: how many applicants from target groups apply to your open positions compared to the size of the group in the overall labor market?
- Advancement: how many applicants from target groups successfully make it to each stage of the hiring process compared to all candidates?
- Selection: how many individuals from target groups are hired as compared to members from dominant groups?
- Promotion: track the number of promotions awarded to individuals in special identity groups compared with individuals from other groups who are advanced through the organization.
Hubspot offers a worksheet designed to help you keep track of hiring metrics on a regular cadence. With metrics such as “Diversity Breakdown of Job Applicants,” your team can start to spot unconscious biases as they crop up and address them quickly.
It’s also important to note that diversity metrics should be more meaningful than a series of boxes to check. These key performance indicators can show you if you’re moving the needle in the right direction but do not tell the full story of inclusion at your organization.
“When used with the right intentions, metrics are useful to measure results against intentions, but they can’t measure or replace what is in your heart,” said one expert in Human Resources Today. “When the use of quantitative data is in lockstep with the results you hope to see in qualitative data, the results of both are more valuable and trustworthy.”
Improving the diversity of your team won’t happen overnight. But, uncovering and remedying unconscious bias in your hiring process is a great place to start.