Diversity hiring is broken at most companies. Here’s how to fix it.
May 29, 2023
Most companies know by now that diversity, equity, inclusion, and belonging (DE&I) aren’t issues they can ignore. There’s a big target audience that won’t allow it: the 57% of consumers who feel increased loyalty to brands that address social inequity in an authentic and meaningful way. Businesses have responded with record investments in racial equity initiatives since 2020 and internal programs to increase the number of underrepresented workers they employ. Diversity hiring programs have taken off…or have they?
Despite stated commitments to diversity, the recent economic slowdown has started to show the cracks in corporate DE&I efforts, including diversity hiring. Here are the most significant problems preventing socially-conscious recruiting teams from making lasting differences… and the steps you can take to bypass them.
Companies treat diversity as an afterthought
Big brands and small businesses alike made bold promises to support DE&I efforts in 2020, but haven’t taken the steps to make meaningful changes to their workforces. That’s because many of these companies treat diversity initiatives as a secondary concern. Deloitte’s 2023 Global Human Capital Trends report found that only a fraction of companies include diversity and inclusion efforts among their business outcomes. Most treat progress in these areas as less important than improvements in profitability and productivity.
This has very real consequences for leaders trying to do important diversity work. CultureAmp’s 2022 study of HR and DE&I practitioners found that only half had a DE&I mission statement and strategic diversity plan—despite these being two of the greatest drivers of DE&I progress. When Gartner surveyed DE&I leaders in 2023 to learn about their biggest challenges, two of the most common complaints were staffing limitations and business leaders’ lack of ownership. These major shortcomings are a result of companies prioritizing other goals over DE&I.
“Our organization has done a great job of talking publicly about diversity. We have site pages dedicated to equity, diversity, and inclusion—including quotes from our CEO and our global leader in the ED&I space on our commitments. And that’s really powerful. We report on our goals as well. We made a public commitment to ensuring that 5% of the workforce is made up of people with disabilities by the year 2025. There are public commitments about increasing representation in our advertising, about spend with diverse businesses. And we made a very public commitment to diverse representation at levels of leadership. All of this gets rolled up and put in our annual reporting.”
- Global Head of Talent Acquisition & Talent Partnership @ multinational consumer good corporation
Diversity hiring programs don't go deep enough
Most companies recognize successful diversity efforts hinge on good hiring decisions, but implementing meaningful changes is still a challenge across the board. Gem asked over 600 talent acquisition professionals about their diversity recruiting efforts and learned that 84% are having trouble meeting their company’s goals. Sourcing underrepresented talent was a struggle for 53% of our respondents.
Candidates notice when interviewers look at diversity hiring as a numbers problem rather than an initiative to find the best workers. Jobvite and Employ’s 2023 Diversity, Equity, and Inclusion Spotlight found that 62% of candidates (including 71% of Hispanic and Black respondents) believed they had been interviewed because the company needed to bring in diverse candidates. And 66% of employers admitted to doing just this. Interviewing underrepresented candidates to meet a department-wide quota won’t result in more diverse hires. It will hurt your talent brand when these people tell others you wasted their time.
DE&I programs and progress are lost during recessions
Tough economic conditions over the past year have exposed companies’ lack of genuine commitment to their DE&I programs. After a considerable jump in diversity-related hires and programs in 2020 and 2021, America’s businesses slowed their efforts.
A Glassdoor DE&I survey found that while 43% of employer benefit reviews included DE&I-related programs in 2021, that number decreased to 41% in 2022. Employees have noticed the change: in 2021, a majority of U.S. workers across every census region said they had access to a workplace diversity program. The same was not the case just a year later.
This isn’t just due to slowing investment; it’s due to DE&I budgets being trimmed. Monster’s Work Watch report found these programs are first on the chopping block at 11% of companies when cuts become necessary. Reduced funding for DE&I efforts often means their internal champions are let go. Just look to the tech field, where cutbacks have been rampant over the past year. 365 Data Science analyzed laid-off workers’ LinkedIn profiles and found 28% of the newly unemployed were HR and talent sourcing professionals. These are the individuals most likely to “own” DE&I initiatives—especially hiring-related ones.
Layoffs also tend to reduce the number of underrepresented workers at a company. This trend was seen during the first few months of COVID, when Black employees were laid off or had their hours cut at a higher rate than White employees did. The pattern has been replicated by the tech industry in recent months. 365 Data Science found that women have accounted for 55% of tech layoffs, despite making up only around 33% of the industry. Worse, Andiamo’s analysis of the recent upheaval found that 78% of the men who were laid off have found new jobs, as opposed to only 68% of women. Progress that only happens when times are good (and gets undermined as soon as the economy hits a speed bump) is really no progress at all.
“I can't help but wonder if there ought to be consequences for senior leaders for not hitting diversity targets. I'm not sure whether there's enough courage in our industry to implement that. But it begs the question: How do you have real accountability? In my experience, targets are missed and everybody moves on with their lives. There's not a deep consequence. So it’s important that those metrics make their way into business performance scorecards—not just HR scorecards. I also think we get obsessed with diversity targets at senior levels of organizations; but if you focus the interventions at senior levels, it's too late. So I think that far more investment and time needs to be given to mid-career diversity than the top of the house.”
- Global Head of Talent @ a global financial institution
How talent acquisition workers can prioritize diversity hiring (even during a downturn)
The problems plaguing workforce DE&I efforts go far beyond what a talent acquisition team can handle on its own. But you can take steps today to protect your diversity hiring initiatives and strengthen them against future threats.
Make DE&I central to the process—not an add-on
Companies find it easiest to cut DE&I programs when they’re separate from other departments and initiatives. When you build a diversity-centric hiring process, no exec will be able to pinpoint the “DE&I bits” as they trim the budget. Reframe your diversity hiring efforts not as a separate program, but as an essential part of the process to find the best candidates. That’s all it really is: a recognition that the top-performing employees won’t always be the ones who are the easiest to find.
Let’s start with sourcing. Cutting spending often means canceling job board subscriptions or memberships to professional organizations that help you source underrepresented talent. But leaders are unlikely to cut industry standards like LinkedIn. Learn how to use LinkedIn’s Boolean search to find candidates from underrepresented demographics, and you’ll be able to keep your pipeline diverse no matter what your budget looks like.
It’s also time to put structures in place to encourage these candidates to work with your company. You can proactively review your candidate pre-screening and interview practices for unconscious bias. Rewriting job descriptions to be more inclusive doesn’t cost any money, and the new and improved JDs aren’t something that can be rolled back when spending drops.
Then, build out your employer brand by soliciting employee-generated content. Ask members from underrepresented communities if they’d like to make a video or write a blog post about their experiences at your company. As you make these changes, your hiring process will become friendlier to underrepresented talent in ways that can’t be easily unwound by budget cuts. Plus, improving your hiring process is a worthwhile use of extra time during a hiring slowdown.
Demonstrate the ROI of workplace DE&I efforts
Companies that believe profits are more important than DE&I efforts may need a wake-up call regarding how these programs boost a company’s bottom line. After all, employees still care deeply about companies’ commitment to diversity.
79% of Millennials and 76% of Gen Zers consider DE&I either “very important” or “somewhat important,” according to Glassdoor’s DE&I survey. These are the workers your company will rely upon to grow. Jobvite and Employ found that 81% of candidates look for a company’s stance on DE&I before submitting an application.
Execs may not internalize how important DE&I is unless you can show them how a lack of clarity or public commitment has affected your pipeline…or made your company lose out on a promising hire. Track how many candidates specifically mention DE&I and how much engagement DE&I-related content gets from potential applicants, so they can see the numbers firsthand.
You can also talk about how diversity initiatives make your hiring process more effective. Candidate drop-off means you lose the resources you’ve invested in bringing a prospect into your hiring funnel. We know candidates leave the process when they face bias or have an otherwise subpar experience. Tools like Gem’s Pipeline Analytics can help you track candidate passthrough rates by gender and by race/ethnicity, and you can compare the diversity of your pipeline to industry benchmarks to get an idea of your team’s effectiveness.
A lack of DE&I efforts can also counteract your work by leading to higher turnover rates. You want new hires to stay with your company and grow into higher roles and duties. A 2019 study by BetterUp found that employees are more likely to remain in a job, and perform better at it, when they feel they belong. DE&I efforts are starting to turn into DEI&B (diversity, equity, inclusion, and belonging) efforts in recognition of this fact. Companies that don’t invest in programs to support underrepresented employees will see more turnover… and spend more money on hiring. All employees benefit from lower attrition rates. Let them know they can contribute to worker retention (and better company performance) by supporting DEI&B programs.
“We’re looking at our inclusive hiring practices continuously. What are the opportunities that might open up that aperture and bring in a wider array of talent? This includes hiring non-degree talent and offering on-the-job learning, having leaders in the organization partner with our ERGs, taking a very close look at our referral program, building meaningful pipelines, and updating our hiring manager training. We can bring diverse talent to the table, but that partnership with the talent advisor really helps hiring managers take an inclusive approach to the candidate slate as they go through the process.”
- Director of Talent Acquisition @ an American multinational biopharmaceutical company
Start nurturing underrepresented talent now
A lot of underrepresented talent has recently been laid off, and hopefully your organization is thinking of them as potential future employees: even if you’re not able to hire right now, you can certainly start the conversation. After all, studies have shown that it can take anywhere between 12 and 20 touchpoints to influence a career decision, and that string of touchpoints ensures you’re top-of-mind for prospects when it’s time to consider a career move. It’s also where your employer brand is built, and—if done well—where some of the best candidate experiences can happen.
Nurture campaigns are so important because they actually improve diversity hiring. This makes sense: by building relationships with prospects before you need them, you’ve got a bigger pool to choose from when a position does open. And because you’re not rushing to fill roles that have just opened, you’re less pressed to turn to the first-best prospect—the “quick hire” often made through referrals and former colleagues—and replicate the homogeneity in your organization.
What’s more, underrepresented talent may need to be nurtured more than majority talent does. The concerns that keep them up at night aren’t necessarily the same concerns that keep the average applicant up at night. Maybe they’ve stayed at unfulfilling jobs because at least they’ve felt a sense of safety there. Maybe they’re desperate to move to an organization that will support their gender transition. Maybe they’re frustrated at the dearth of female leadership at their current company and would gladly move to an organization whose leadership makeup suggested career advancement is possible for them. And so on.
Nurture campaigns give you time to demonstrate that your initial outreach wasn’t just about finding token talent to pad your team’s diversity stats. Rather, you can prove that inclusion is as important to your org as diversity is. It may take time for your prospects to see the whole, genuine picture, and let go of their wariness.
Consider segmenting prospects for your diversity initiatives by demographic. If you recently met a group of prospects at an LGBTQ industry event and another group at a Hispanic professional association event, you’re not necessarily going to send them the same content. Recruiters need to start catering to prospective candidates the way marketing messaging caters to prospective customers. (That said, remember that these groups are not perfectly distinct! To honor intersectionality, you might allow prospects to self identify or to opt-in for specific newsletters so you can segment them according to how they self-select.) A solution like Gem allows you to add candidates you’ve met—or sourced—directly to an email sequence and send them more personalized, demographic-specific content… then track funnel metrics to see if your outreach campaigns ultimately lead to hires.
“We’ve made a ton of progress with diversity over the last couple of years, but we've also really prioritized it. I've had a super-supportive executive leadership team, and there's been a ton of buy-in on moving the needle there. Diversity can't just be something that’s thrown on hiring managers and the talent team. At the end of the day, if Revenue's only charged with hitting their numbers, they're not going to focus on bringing more diversity to the group as a whole. Gem has been an awesome resource for us to track how we’re trending. I use their dashboard analytics with our executive leadership team every week to show: here's how our offer-accepts break down by gender or ethnicity. It helps me keep pace with how we're doing overall."
- Head of Global Talent @ a Series D SaaS company
'Diversity recruiting' isn't an initiative or a program; it's a practice
Companies have a long way to go when it comes to truly being diverse, equitable, and inclusive environments. WorkHuman’s Human Workplace Index found that 28% of employees don’t know their company’s stance on social issues, and 21% question leadership’s intentions around these topics. Monster’s Work Watch Report found that 28% of workers find their workplaces “toxic” due to a lack of DE&I programs or conduct policies that protect workers against bias.
As talent acquisition professionals, we can do our part to make a difference by building resilient DE&I programs. The more we center DE&I in every discussion and process, the harder it will be for leadership to deemphasize our work and roll back progress. America has had its wake-up call regarding what workers expect from companies—and just as we lead the way in finding new talent for our employers, we can lead the way to a more diverse and inclusive future.
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