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Why recruiting a diverse workforce is critical for your business

One of the hottest topics in the business world today is workplace diversity. While some trends emerge and seem to take over, only to be eclipsed by the next great thing, investing in diversity is here to stay. Job seekers nowadays demand it—67% say it is an important factor when considering a prospective employer1. Diversity is good for business in other ways, too, driving innovation, revenue, and business growth.

What do we mean when we talk about workplace diversity? The most basic definition is that your team reflects the general makeup of the society around you. The concept is simple but achieving it typically requires intention and focus to overcome systemic and individual biases that have traditionally resulted in the marginalization of many segments of society.

The key to a truly diverse workforce is hiring practices that are free from bias against individuals or groups: diversity recruiting. Always merit-based, seeking to identify the best possible candidate, diversity recruiting is structured to ensure that every qualified applicant receives an equal opportunity to be selected, regardless of their background. As diversity recruiting becomes more widespread and more deeply rooted, it represents a substantial step toward establishing true equality in the workplace.

By reflecting the greater society, a diverse workforce signals that your organization understands, accepts, and values differences among people. It can pertain to age, race, ethnicity, gender, religion, disability, and sexual orientation as well as experience, personality, education, skill sets, and knowledge bases.

There are two types of diversity and both are equally important. Inherent diversity refers to demographic characteristics such as age, race, and sex. Acquired diversity refers to factors that are acquired or earned over time including education, experience, and skills.

A full 85% of CEOs say that having a diverse workforce has improved their bottom lines1. Forbes Insights has identified workforce diversity and inclusion as key drivers of internal innovation and business growth. Companies with diverse management teams have 19% higher revenues1. Diverse companies are 1.7 times more likely to be leaders in their market segments1. One study of more than 500 organizations found every 1% increase in gender and racial diversity correlated with increased sales revenue, 3% and 9%, respectively2.

When we think about it, the mechanisms that generate all those performance improvements make sense both intuitively and empirically. Any team that encompasses a broader range of skills and experiences will be better able to contend effectively with whatever business challenges they encounter. Greater variety in language and cultural awareness positions your organization to engage with more markets and with the entire community to which you belong, be it local, regional, national or global.

Diverse teams bring a wider range of information and perspectives to the table which results in better decision making and better overall outcomes. They are less likely to fall prey to confirmation bias, avoiding the “echo chamber” phenomenon that can obstruct problem solving and inhibit innovation. 

According to research, diverse teams provide the following benefits2

  • Social networks that are multicultural boost creativity.
  • Diversity drives higher performance in creating new markets and in product development.
  • Groups of diverse problem solvers consistently outperform groups of high-ability problem solvers.

These dynamics play out from the mailroom to the executive suite and every place in between, even reaching into the boardroom. According to an analysis by McKinsey, companies with diverse executive boards enjoy significantly higher earnings and returns on equity2.

Like other core initiatives, diversity recruiting is most successful when approached strategically. In fact, it is often part of a broader diversity, equity and inclusion (DEI) strategy aimed at ensuring an organization’s workforce reflects the community(s) where it does business as well as its customer base.

Approach your diversity recruiting strategy by defining your goals, developing action items, and determining accountability. Establish metrics that enable you to measure progress against goals and impact on business outcomes. Create mechanisms to reward behaviors that foster a diverse and inclusive culture.

Diversity recruitment is not simply a matter of fixing an HR function and it is not an end in and of itself. An overarching objective is to foster a sense of belonging in an organization for everyone who is a part of it and having a diverse roster is not enough. The bottom-line benefits discussed above are fully realized only when there is an authentic culture of diversity throughout the company. Approaching your diversity recruiting strategy with that in mind will help ensure the impact is real and durable.

Be prepared to overcome barriers. In fact, go looking for them. A full 70% of talent acquisition experts say the challenge of increasing workplace diversity lies in leaders’ unwillingness to try new approaches3.

One of your goals may be to increase diversity at every level and in every branch of the organization. To build action plans, you will need to examine which areas of the business need the most attention and determine specific goals and tactics accordingly. For example, you may set an objective to increase female representation in tech roles by 15% or expand racial diversity on the senior leadership team by 30%.

Naturally, you’ll create key performance indicators that measure progress in bringing diversity to your recruiting and onboarding programs, e.g., changes in the diversity of your talent pipeline. Don’t stop there. Be sure your metrics enable you to monitor downstream outcomes: employee satisfaction with the company’s delivery on diversity and inclusion; employee retention; management satisfaction with new hires; employee performance measures that link directly to key business results.

Unconscious bias—also called implicit bias—causes us to behave in ways that reinforce stereotypes despite our conscious rejection of them. Affinity bias makes people gravitate toward others who resemble themselves. Assume that unconscious bias and affinity bias both are present in your recruiting process to some degree and seize every opportunity to identify and account for them.

Learn about differences among people in terms of how they approach job searches, the language and messages to which they respond (and don’t). Become familiar with the nuances and “micro” signals that can telegraph to a candidate whether they would be genuinely welcome in the organization. Apply everything you learn to every stage of your process.

More diversity in hiring requires more diversity in your applicant pool. That likely means you need to make some changes to the way you source prospective talent. Once you begin examining your standard tools and techniques, you may be surprised at how many adjustments can be made that will enable you to reach segments of the talent pool that were escaping your net before.

You have probably seen the oft-quoted statistic that men will apply for a job if they meet 60% of the qualifications while women apply only if they meet 100% of them. So, a job description indicating candidates should have 5 years of experience will attract men who have somewhat less but are confident their overall capabilities will qualify them. For the same position, you will only see resumes from women who have at least 5 years of experience regardless of what else they bring to the table. If “5 years” is an arbitrary or ballpark number, meant to communicate a general base of knowledge and experience that could be found in someone with only 4 years in the role, then reconsider how you articulate what you are really looking for in terms of qualifications.

More generally, audit your job posts for any kind of arbitrary requirements which, taken literally, could screen out the very candidates you want to attract. And ensure neither your job posts nor any other outreach materials contain gender-themed or exclusionary language. For instance, instead of asking for a degree from a “top school” or an “Ivy League University”, either of which translates to an elite university, require a degree in a specific field.

Here are some more data points that can help you reorient how you are sourcing talent to access a more diverse candidate pool. When searching for a job2:

  • 31% of men and 26% of women use professional networks.
  • 12% of men and 17% of women use third-party websites or job boards.

When you keep doing the same thing in the same way, you will keep getting the same outcome. To reach candidates you have missed before, look for them in different places and in different ways. Build search parameters that include female names or ethnic surnames. Target professional organizations and networks where diverse members congregate. Give current employees who belong to demographic groups you want to target the tools to promote the company and encourage them to share your job ads with their networks. Look for opportunities to partner with schools and community groups in connecting with students. Offer internships or co-op positions to candidates who bring the diversity of backgrounds you are seeking.

One thing that helps attract—and retain—diverse candidates is creating an environment where they will thrive. Find ways to create flexibility that will support specific needs. Example: a long commute is a strong predictor of employee turnover and distance from downtown office locations often correlates with more diverse residential neighborhoods. By offering flexible work hours and/or options to work from home, you can remove the commute variable from the equation and make joining your company a more appealing opportunity for diverse candidates.

Review policies governing time off and consider including more religious holidays. Provide sufficient flexibility to support candidates’ involvement with their communities.

Make sure management teams encourage and are receptive to employees speaking up about any policy they feel hinders or undermines diversity and inclusion. Every individual experiences their workplace through the lens of their own experiences and biases, and open and candid dialogue is the single most powerful tool to make everyone feel they belong.

According to surveys, 83% of job seekers say an employer’s commitment to diversity factors into their decision about whether to accept a job3, and most job seekers believe companies that claim they are committed to diversity. How well is your company communicating its commitment? Is your employer brand up to date, clearly highlighting how diversity and inclusion figure into your employee value proposition? Are you investing adequately in recruitment marketing?

Attracting a diverse pool of qualified applicants is step one. Next, you want to be sure your screening process is free of bias. Otherwise, you risk undoing all the progress you made with your recruiting efforts.

The traditional criteria applied during pre-hire assessments—previous employers, schools attended, professional connections—can work as “anti-diversity” mechanisms in the candidate pipeline. As we noted before, when you do the same thing, you get the same outcome. The objective here is to reach beyond the usual parameters and assemble a broader pool of candidates who bring different backgrounds and experiences than you usually see.

There is a solution. Consider using a pre-hire personality assessment tool. Personality scores do not differ significantly for members of minority groups and companies using a pre-hire personality assessment have been shown to have more racially diverse workplaces.

No matter how careful and intentional we are, it remains challenging to implement screening processes that are 100% bias-free. We are all human, after all, and some of the most insidious forms of bias are unconscious. For this reason, more and more recruiters are anonymizing resumes prior to review. Software is available that removes information that can trigger bias on the part of reviewers such as names, schools, and addresses.

The same principle applies to the early stages of interviewing a candidate. It can be extremely difficult to avoid all bias when talking with candidates. A way around it is to use anonymized, text-based conversations in which candidates are requested not to share personal information. Both parties can focus on getting acquainted along the professional parameters that pertain to the job while keeping factors that potentially trigger bias out of the conversation at that stage.

Another way to eliminate bias from your screening process is by leveraging artificial intelligence (AI). Program your Applicant Tracking System (ATS) to filter and flag for specific skills and experience and let the technology produce an impartial analysis of your candidates.

The closer you get to making an offer, the more difficult it will be to keep bias out of the process as you develop a sense of who each candidate is. Unconscious bias will likely start to seep in but there are additional tools and techniques you can use to neutralize it.

It is well documented that diverse candidates are substantially less likely to be selected when they are the only ones representing their demographic on a shortlist. Too often, they are unconsciously perceived as tokens and fall prey to decision bias that eliminates them from final consideration despite having made the shortlist.

Remove this final hurdle to your diversity recruiting strategy by taking advantage of the “2 in the pool effect.” Seed your shortlist with a proportionate number of diverse candidates which avoids leaving one standing alone and at risk of serving as a token. If your recruiting and screening strategies have effectively brought diversity to your applicant pool and removed bias from the process, then it should not be problematic to produce a shortlist of candidates who are truly qualified and diverse.

Faced with the tightest labor market many people have experienced even during long careers, employers are bringing their A games to attract and retain the best talent they can. Candidates want to join organizations with authentically diverse teams and will hold out for offers from authentically committed companies. Happily, the companies that follow their lead and build real diversity into their workforces will see positive impacts not only in recruitment and retention but in a host of other key performance metrics including revenue, business growth and innovation.

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