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Diversity and Inclusion: Trends
According to a study by Mercer, 64% of workers in entry-level positions are white and 85% of top executive positions are held by white people. These numbers show a large disparity between the representation of people of color in the nation compared to the workplace. Because of recent social justice movements and issues, companies have been a lot more aggressive in changing their Diversity & Inclusion policies. Two trends that show what companies have been doing recently are seeing Diversity & Inclusion as business models and investing in inclusion technology.
1. Diversity and Inclusion as Business Models
- Diversity was long seen as a way to be in compliance with rules and regulations. However, current trends show that businesses are moving to embrace diversity as part of their business model.
- According to experts, there’s a financial downside to having a lack of diversity in the workplace. A lack of diversity stifles innovation and diversity of thought. These companies also struggle to retain top talent.
- Also, companies are prioritizing ESG (environmental, social, and governance) investing. The pandemic and recent racial justice movements are forcing companies to put more emphasis on the social element.
- These recent issues have caused companies to be more vocal about social issues. Top executives at large companies like JPMorgan Chase, BlackRock, Ulta Beauty, and others, have raised their voices at the height of racial justice marches and protests during the summer.
- As diversity is fast becoming a business model, companies have started to pledge not to work with any firm or organization that doesn’t meet specific diversity metrics. One company that embraced this new model is Intel. They pledged that by 2021, they will refuse to work with any law firm that does not meet their diversity requirements.
- Another company that has embraced this new model is Goldman Sachs. Since July 1st, they demanded that all companies in the U.S. and Europe that are planning to go public with them must have at least one “diverse” member on the board.
2. Companies Investing in Inclusion Technology
- As awareness of social issues become more widely spread, startups that offer tools for diversity and inclusion have increased exponentially. In a RedThread-Mercer study of 105 of these inclusion technology vendors, most of them appeared in the last five years.
- A current trend is using artificial intelligence and software to remove biases from the recruitment process.
- Often, during the recruitment process, candidates get excluded from the talent pool due to their name or the length of their tenure at previous organizations. With AI, human judgment is taken out of the equation as machines screen applicants.
- AI ensures that qualified candidates have equal access to job opportunities and that human resource analysts and managers are fair in their assessments.
- However, experts warn that solely relying on AI to root out bias could perpetuate the problem. It is entirely possible for AI to have the biases of its creator hard-baked into its code. Amazon recently had to stop using one of their AI recruiting tools because of this problem.
- The recruitment process isn’t the only area where software comes in handy. Other software helps employees and managers to handle issues that may arise from a growing and diverse workplace. An example of this is the Inclusion Virtual Coach App and the company that has been the main investor, user, and proponent of this app is Microsoft.
- Microsoft has a wide range of programs and products that reach people of different genders, races, abilities, ages, etc. They go in-depth into how they use Inclusive Design, and how they go about making Inclusive AI.
Diversity and Inclusion: Best Practices
Best practices around diversity and inclusion in the workplace include implementing a scorecard with metrics around women and people of color/underrepresented minorities and diverse interview panels. Companies that have published scorecards with data around women and people of color/underrepresented minorities include Salesforce and Comcast. Companies that are using diverse interview panels include Netflix and Intel.
1. Scorecard with Metrics around Women and People of Color/Underrepresented Minorities
- A diversity and inclusion (D&I) scorecard could include data that cover “all levels and types of diversity, including age, gender, ethnicity, nationality, and religion.” Collecting and analyzing these data are useful for helping senior leaders achieve the company’s D&I goals.
- The most common metrics on D&I scorecards include the number and percentage of women and people of color/underrepresented minorities. United States-based companies typically focus on ethnicities such as African American, Hispanic, American Indian/Native Alaskan, Hawaiian/Pacific Islander, Asian American, and multiracial. Other types of data collected by various companies for these demographics include hires in the previous month, promotions, and voluntary termination.
- Companies are also increasingly measuring data related to the mentorship of people with different backgrounds, attendance at D&I events, employee resource groups, and others.
- Implementing a scorecard that covers data around women and people of color/underrepresented minorities is considered a best practice as it is recommended by organizations/publications that cover human resources best practices such as Human Resource Director magazine, LinkedIn, and Diversity Best Practices.
- Additionally, companies recognized as one of the best workplaces/employers in the United States for diversity such as Salesforce and Comcast have published scorecards that feature metrics surrounding women and people of color/underrepresented minorities. Forbes has ranked Salesforce and Comcast 14th and 20th respectively on the 2020 America’s Best Employers for Diversity list.
- Only the success metrics for Salesforce is available. Salesforce began submitting monthly scorecards to its leaders in 2018. The percentage of women in the company’s global workforce increased from 30.9% in 2018 to 33.0% in 2020.
2. Diverse Interview Panel
- Implementing a diverse interview panel could help show that the company is “committed to different points of view.”
- It is also useful for eliminating bias in the hiring decisions and “putting checks and balances on in-group favoritism.”
- The practice of having “candidates interviewed by people who are similar to them” could make them feel more comfortable and welcomed. According to a global study published by BCG in 2019, employees of color reported that they view diverse interview panels as “one of the most effective measures to bolster diversity and inclusion.”
- Implementing a diverse interview panel is considered a best practice as it is recommended by organizations/publications that cover human resources best practices such as LinkedIn, HRO Today, and Monster.
- Additionally, companies recognized as one of the best workplaces/employers in the United States for diversity such as Netflix and Intel have implemented diverse interview panels. Forbes has ranked Netflix 12th on the 2020 America’s Best Employers for Diversity list, while Diversity Best Practices has listed Intel on its 2020 Inclusion Index.
- Only the success metrics for Intel is available. Since 2014, Intel has required that interview panels for all new hires include “at least two members of underrepresented communities.” The percentage of new hires that were either women or people of color increased from 31% in 2014 to 45% in 2016 (latest data available).