Hire for Diversity, You Know, Like Prince

Chief executives say inclusion initiatives reduce turnover, help recruitment efforts

Aliah D. Wright By Aliah D. Wright April 27, 2018
LIKE SAVE
Hire for Diversity, You Know, Like Prince

​Some of the employees at Badger Maps, based in Silicon Valley, mark their holiday party last year. Fifty percent of the staff, including the engineering team, are women and come from across the world.

Want to improve your company's bottom line by hiring more diverse talent?

Be more like Prince.

"Prince is a prime example of inclusion," said Margaret Groves, CEO of Engineered Process Improvement, of the deceased singer.

One of his last backing bands, 3rdEyeGirl, "was mainly women. That didn't happen accidentally," said Groves, who runs a consultancy for technology startups in Seattle and deliberately hires diverse talent. "He made a point of finding the best bass player, guitar player and percussionist—and he made a point of finding the best women for the job."

Not only should more companies be like Prince and hire the best employees—no matter their race, ethnicity, sexual orientation, age or gender, savvy CEOs should realize that working with HR to integrate diversity and inclusion in the hiring and training process is a proven driver of business success.

Chief executives tell SHRM Online that their diversity and inclusion efforts have saved them money by reducing turnover. It also helped recruitment efforts.

Hiring for diversity and inclusion—which also includes white males—should no longer be a warm and fuzzy checkbox for companies to fill just to avoid lawsuits. It can also mean the difference between improving the bottom line and destroying it.

For example, the recent incident in which two black men were asked to leave a Starbucks "is an example of how unconscious bias can affect a company's [profits]," said Susan Gordon, CEO of Inclusion Excellence LLC, a Washington, D.C.-based diversity and inclusion consulting and training firm. A similar incident happened days later at an LA Fitness in Secaucus, N.J. Thousands took to social media calling for a boycott of the coffee chain, "potentially affecting Starbucks' profitability and their ability to attract the best and the brightest talent."

Which is likely why Starbucks CEO Kevin Johnson swiftly announced that the chain was closing 8,000 stores for racial-bias training on May 29 and why the company tapped big names to help create the new curriculum for employees.

Although experts, research and media reports now reveal that employing diverse  individuals makes sound economic sense, diversity and inclusion at most companies is still lagging due to ageism, unconscious bias and racism.

"People need to hire other people that don't look like them, and it just doesn't happen" often enough, Groves said.

Census data reveals that, by 2045, "due to shifting demographics, [racial] minorities will be the majority in the United States," Gordon pointed out. "As a result, many diversity and inclusion best practice organizations are currently and proactively preparing for this shift in demographics to utilize it as a competitive advantage."

Some organizations, like HP, Sodexo, SAP, Freddie Mac, Accenture, Salesforce, Microsoft and others, understand and value differences and are "integrating inclusion into their hiring, retention, [training], development and other talent management processes so that inclusion is a way of life in their organizations," Gordon told SHRM Online. Yet many organizations have yet to make inclusion a priority, she said.

This can be to their detriment.

Diverse Companies Are More Profitable

In Delivering Through Diversity, a study released in January by researchers at McKinsey & Company, "companies in the top-quartile for gender diversity on executive teams were 21 percent more likely to outperform on profitability and 27 percent more likely to have superior value creation," the study reported.

"The highest-performing companies on both profitability and diversity had more women in roles that generated revenue than in staff roles on their executive teams," according to the study.

But being diverse means more than just paying attention to gender.

"Companies in the top-quartile for ethnic and cultural diversity on executive teams were 33 percent more likely to have industry-leading profitability," the study authors wrote.

As McKinsey points out, "the myriad ways in which diversity exists beyond gender—for example [LGBTQ], generational, international experience—can be a key differentiator among companies."

Just as diverse companies see their bottom lines increase, those that refuse to embrace diversity see a decline in profits.

"Overall, companies in the bottom quartile for both gender and ethnic and cultural diversity were 29 percent less likely to achieve above-average profitability than were all other companies in our data set," McKinsey reported. "In short, not only were they not leading, they were lagging."

Gender Diversity Pays Off for Tech Industry

Research reveals that one of the fastest growing industries in the United States is the technology industry, yet, despite years of lip service, diversity in this industry continues to flag.

According to the ISACA 2017 Women in Technology survey, The Future of Tech Workforce: Breaking Gender Barriers, women occupy only about 1 in 4 tech positions overall—and only about 1 in 5 management jobs. What's worse, their participation in the technology industry has declined in recent years. As SHRM Online reported, not only do many face isolation and hostility at work, they also lack mentoring and support.

But there are ways chief executives can encourage their HR departments to aid the recruitment and retention of a more inclusive talent pool. For instance, they can follow tech-based recruitment company Hireology's lead.

Since 2015, Julie Rodgers, Hireology's chief operations officer, and its CEO, Adam Robinson, along with their management team have established the Chicago-based business as an attractive place for female candidates and underrepresented employees. At every level—including senior management—the company is now nearly 50 percent women, up from 25 percent three years ago. As Forbes reports, Hireology changed the HR policies that weren't favorable to women by:

  • Offering more work/life balance options for new parents, including options for remote work as well as 12 weeks of paid maternity leave and four weeks of paid paternity leave.
  • Eliminating gender bias in job descriptions before posting
  • Developing sensitivity training to address unconscious bias in the language male employees might use toward their female colleagues.


Hireology's commitment to inclusion has led the company to nearly double its clients—from 2,000 in 2015 to nearly 3,800 today.

Yet, Tech Diversity Continues to Wane

Statistics from the U.S. Government Accountability Office last year revealed that "the estimated percentage of minority technology workers increased from 2005 to 2015, but GAO found that no growth occurred for female and Black workers, whereas Asian and Hispanic workers made statistically significant increases. Further, female, Black, and Hispanic workers remain a smaller proportion of the technology workforce—mathematics, computing, and engineering occupations—compared to their representation in the general workforce."

How companies recruit must change, experts said.

"To foster diversity, we approach recruiting differently at Badger Maps than most tech startups in Silicon Valley," the company's founder and chief executive officer, Steven Benson, told SHRM Online of the small, six-year-old company that employs 40 people in San Francisco, Salt Lake City, Spain and the Philippines. "A lot of companies in the Bay Area corner themselves by hiring [only] from Ivy League and upper echelon schools," he said. "This may seem like a strong move. However, it prevents companies from building a strong and diverse culture."

Benson said that when his company recruits from colleges, it does so "where the student body is rich in diversity and reflects the community of the Bay Area, which gives us great and very talented candidates. Fifty percent of our employees are women—including the engineering team—and we have people from across the world, such as France, Italy, Germany and India."

Benson said Badger's turnover rate is less than 1 percent this year. And "almost everyone who has joined the team since 2012 is still with the company to this day, holding leadership roles in their areas of expertise."

Some Companies Continue to See Success

Meanwhile, German-based software company SAP's chief diversity and inclusion officer, Anka Wittenberg, said "SAP believes that to truly be successful and prepare ourselves for challenges and opportunities ahead, we need to incorporate different ways of thinking and aim to accommodate the abilities and working styles of colleagues in our organization. To do so, we strive to promote an inclusive work environment that considers the special needs and skills of each employee. The diversity of our employees helps us to get a better understanding of our customers, develop innovative solutions, and stay competitive in a global economy."

As HR Magazine reported, SAP began its Autism at Work program in 2013. It aims to have 1 percent of its workforce by 2020 be made up of employees who have been diagnosed with autism.

 

[SHRM members-only toolkit: Employing Persons with Cognitive Disabilities]

 

At HP, "Advancing diversity is a business imperative. It fuels our reinvention journey, helping drive transformation in marketing and beyond," stated HP Global Chief Marketing & Communication Officer Antonio Lucio in a release. "HP is a stronger brand and better company because of it."

For many companies, being diverse has also saved them millions.

Groves said, "one of my teams [which was comprised of one-third women and two people of color] saved Boeing $10 million in three months by helping them build planes more efficiently."

She added, "I hire for diversity and inclusion because my experience at Boeing and in the startup world has proved to me that a team consisting of diverse backgrounds improves all areas of the business process: the ideation stage produces more numerous and higher potential value suggestions; designs are more thoroughly researched; and strategies for content delivery are more targeted and more impactful."

 

Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter


LIKE SAVE

SHRM HR JOBS

Hire the best HR talent or advance your own career.

SPONSOR OFFERS

HR Daily Newsletter

News, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day.