Why Attracting and Retaining Diverse Talent is a Strategic Priority
To tackle longstanding workplace discrimination, many future-focused organizations are adding diversity officers to their leadership teams.
Why? Because the Equal Employment Opportunity Commission didn’t solve the ethnic, racial and gender imbalances prominent in the U.S. workforce, and the issues aren’t going away on their own. For example, check out the following statistics about the dismal state of diversity in today’s workforce.
- American Progress reports that in nonprofits, 82% of employees are white, despite the fact that just 64% of the working-age population is non-Hispanic white.
- As of 2014, of the Fortune 500 CEOs, just over 4% were people of color, and only 24 (4.8%) were women. As Silvie Woolf said, fewer CEOs are named David than are women.
- Google reports that 3% of their employees are Hispanic and 2% are black.
- Apple’s employees are 70% male.
- LinkedIn has a global employee base that is 3% Hispanic and 1% black.
Diversity Roles Future-Proof Organizations
Diversity roles are not only relevant for today’s workforce, but for the future workforce as well. The Bureau of Labor Statistics reported in 2012 that by 2020 more women are expected to be working than men. And according to 2012 census data, by 2050 there will be no racial or ethnic majority in the U.S. This trend will continue, because 85% of the net workforce growth over the next two decades will come from immigrants and their children.
That means the talent pool will be a diverse one; and if organizations want the best talent, they need address any issues that are keeping diverse talent out of their ranks and out of their boardrooms. Beyond talent on an individual level, a diverse workforce as a whole is important for the bottom line. In fact, 96% of executives polled in a Korn/Ferry Institute study believe diversity can boost the bottom line.
Diversity and the Bottom Line
Here are four examples of the measurable, positive effects that employee diversity has on organizational success.
- Catalyst took a look at Fortune 500 companies with women on their board of directors and found that these companies had a higher return on equity by at least 53%, were superior in sales by at least 42%, and had a higher ROI, to the tune of 66%. Those are not small numbers.
- McKinsey quarterly reported that between 2008 and 2010, companies with more diverse top teams were also top financial performers.
- When 321 executives at large global enterprises ($500 million plus in annual revenues) were surveyed for the Fostering Innovation Through a Diverse Workforce study, diversity and inclusion were identified as the key driver of not only internal innovation, but also business growth.
Groups of diverse problem solvers outperformed groups of high-ability problem solvers, according to a study by Lu Hong and Scott E. Page.
The Course of Action is Clear
So if the workforce is becoming more and more diverse, and financial performance, business growth, innovation and problem solving can be attributed to diverse teams, the course of action is clear: make attracting and retaining diverse talent a strategic priority. That’s where diversity officers come in.
Unfortunately, many organizations don’t know how to incorporate this type of role into their current structure. They don’t know if they should add diversity responsibilities to current employees or create a new role. They aren’t clear what that role would really look like, and therefore have no idea who, or what department, would be the best fit.
Where Do Diversity Officers Fit In?
Diversity officers are often based in the human resources (HR) department. Yet HR can often be seen as more tactical rather than strategic in its thinking. Not to mention HR often doesn’t have a seat at the C-suite table. So who should claim this type of work? Who should look at trends, figure out a talent plan and advise the C-suite?
Next week we will take a look at the type of person, inside or outside the organization, that could successfully claim the important work of diversity. What qualities are most important? We’ll look at a hypothetical candidate and explore where this role might fit into the organizational structure. Stay tuned for a blueprint that can be used to build a diverse and inclusive workforce for any organization.
Have you had experience working in both diverse and not diverse teams? Were there any noticeable differences between the two? I’d love to hear your perspective.