Originally published in Bloomberg Tax.
A question soon to be asked to all is, “What did you do during the pandemic?” Individuals might comment on the number of puzzles they completed or drive-by COVID-19 birthdays they attended. Companies will regard transitioning to remote work and the high volume of incoming and outgoing Zoom calls. But what this question is really asking individuals and organizations to do is reflect upon how they made a change for the better in 2020.
Last year, companies were asked to be accountable and actionable about their diversity, equity and inclusion efforts or lack thereof. Improving diversity at an organization does not happen overnight. It will take both time and effort for companies to make progress and begin building a more diverse workplace.
The good news – it is both possible and pragmatic for organizations to invest in diversity. Entering a post-pandemic world, companies are given a golden opportunity to reflect on past errors, apply best practices to improve their hiring cycle and begin a new chapter.
THE ROI OF DIVERSITY
Creating a diverse workforce is about more than checking a box or meeting a quota. Diversity is good for business. Organizations should approach diversity with the same mindset as would to find efficiencies or new target markets. The business case for diverse teams is simple and compelling:
- Diverse teams are more profitable: Diversity is often lacking in boardrooms. A survey completed by the U.S. Census Bureau found that black women represent 7.4 percent of the population but only 1.6 percent of vice presidents and 1.4 percent of C-suite leaders. However, it has been proven that leadership that is more diverse improves the bottom line. A study
conducted by McKinsey found companies with higher rates of gender diversity on their executive teams were 15 percent more likely to experience above-average profitability.
- Diverse teams are more innovative: Coined by Author and Consultant Frans Johansson, the “Medici Effect” suggests to find innovative solutions one should solicit feedback from a diverse group of people from different backgrounds and cultures to gain multiple perspectives. Increasing diversity of thought will naturally bring more diverse ideas and find a better solution.
- Diverse teams are more productive: When companies create a culture that invites all employees to participate in creating new products, ideas or services, both output and the bottom line are improved. Great Places to Work research found diverse teams generated more high-quality ideas, had faster speed of implementation and increased revenue growth by 5.5 times.
HOW TO RECRUIT DIVERSE TALENT
Making the case for diverse talent is the easy part. Recruiting diverse talent to an organization might require the hiring team to stretch. First, recruiters must go beyond their normal channels to find diverse candidates. One way to do this is to expand recruitment to historically black colleges and universities as well as community colleges. Investing in these recruiting efforts will signal to current and prospective students that an organization is serious about improving their diversity efforts.
Another avenue for recruitment is local chapters of professional associations. These associations offer direct access to whatever group a company is trying to attract. The National Association of Black Accountants is an example of one organization that provides current and up-and-coming minorities with resources and opportunities to be successful in the accounting field. Building relationships with groups like the NABA will provide a direct channel to diverse talent with the qualifications needed to fill open and future positions.
Finally, partnering with job boards targeted to find, hire and promote diverse talent could offer more visibility to companies. One example is Jopwell, a platform designed to help advance the careers for Black, Latinx and Native American students and professionals. More than a job board, Jopwell scales services for diversity recruitment, marketing and retention efforts.
HIRING TEAM REFRESH
Organizations should take a fresh look at their hiring team and redesign hiring process to be more inclusive. The hiring team is often the gatekeeper to an organization. However, companies might be putting too much power in their hands. This begins by addressing unconscious bias that often appears during the interview processes.
When companies fail to address bias, it not only limits the potential of diversity in the workplace but also limits the company itself. Organizations should reframe hiring metrics like “culture fit” and position them as “culture add.” Hiring managers should also be challenged on “need to have” versus “nice to have” requirements.
A recent study conducted by Wharton and Stanford professors and economists found that even organizations looking to improve diversity often give female and minority candidates less credit for their achievements. The same prestigious internship on a white male’s resume improved their ranking by more than 50 percent than that of a female or minority candidate.
Strategies like blind hiring and utilizing a scorecard are powerful tools to combat the biases that kneecap diversity efforts. Furthermore, companies should explore the job design to accommodate the varying needs and preferences of diverse candidates.
Every company should make inclusion a core value.
Employee retention and inclusion go hand-in-hand, and the steps to create a more inclusive workplace are not grandiose. It starts with connecting with employees and being open minded. Making an effort to listen to employees’ concerns is more than half of the equation to an inclusive workplace.
Another key piece is speaking up about inclusion. CalCPA and the IMA research found that diverse talent often leaves because of a lack of inclusion and equitable treatment. When employees feel heard and understood, they will be more likely to stay at a company.
Responses collected from CNBC and Survey Monkey’s Workplace Happiness Survey make a strong case for mentorship programs. Organizations that invest in these programs find mentoring to be a powerful tool that allows mentees to benefit from someone senior taking interest in their career and offers opportunities for minorities to be promoted and climb the ladder.
The efforts of diversity, equity and inclusion need to go beyond statements and speeches. Organizations must become allies to diverse employees and advocate for their success. To better understand how to support diverse employees, companies should solicit feedback through surveys, assessments and even focus groups. Barrier analysis and research will also help companies unpack obstacles to inclusion.
With genuine dedication and resolve, organizations can build a more diverse workplace. It will not always be easy, and there will be mistakes, but if companies stay the course, they will create a better organization for all.