March 16, 2023
How to think about recruitment spend and ROI during a downturn
Head of Diversity, Equity, Inclusion, and Belonging at Gem
July 27, 2022
Any organization that wants to succeed in today’s hiring market knows that diversity is one of the most important factors in attracting and retaining top talent.
The economic advantages and ethical reasons for hiring a diverse workforce are numerous and well-documented. But aside from these reasons, diversity is becoming a key differentiator, especially among younger generations, with 87% of Gen Z workers saying D&I is “very important” when choosing an employer.
Unfortunately, far too often, we’ve seen leadership teams with good intentions struggle to set realistic targets for what diversity actually looks like within their org, what it should (or could) be, and how to get there. This leads to talent acquisition (TA) teams feeling overwhelmed by hiring goals that seem unattainable, out of touch with the market, or just pulled out of thin air.
In this article, we talk with Sheilesha Willis, Director of Diversity, Equity, Inclusion, and Belonging (DEI&B) at Gem, about how to set inclusive hiring goals that are concrete, measurable, and realistic to build a more equitable and empowered workforce from the ground up.
This is the first step in creating a more diverse workforce. To bring about any meaningful changes, you have to know your starting point.
Dig deep into your hiring pipeline and look at how underrepresented groups (URGs) are currently moving through your hiring funnel and where there’s room to improve. What is the percentage of URG talent entering your hiring funnel? What do their passthrough rates look like? Are there certain stages at which these candidates tend to drop out of the hiring process? This information will give you insights into the specific diversity goals you should be setting and help you identify potential sticking points that may need to be addressed.
Sheilesha Willis: “When I'm setting a hiring goal, first I need to understand current representation within the organization. Does it look proportional to what we see in the general labor market and, more specifically, within the industry? From there, I try to understand what the current pipeline looks like—what rates are different groups entering and passing through the funnel.”
Finally, think about your overall headcount targets for the year. Look at the total number of projected hires, and compare that with how many URG candidates are entering your hiring funnel—as well as their passthrough rates—and determine if the goals you’ve set are attainable given the capacity of your talent acquisition (TA) team.
Think of a “moonshot” goal as the grand prize in a claw machine. Theoretically, it’s possible to put in one quarter, flawlessly maneuver the claw, and pull out something amazing; but in practice, this is rarely (if ever) the case. The same applies to talent acquisition. Most teams don’t set diversity goals based on actual market data—instead, they are often based on the aspirations of the leadership team or aggregate census data.
Sheilesha Willis: “Setting a goal of 50% parity in company leadership, for example, is a great ‘north star’ to work towards; however, it’s not going to happen overnight. I've seen many leaders who believe that there's one lever they can pull to reach a hiring target, and most often, that’s just not the case. Usually, multiple things need to happen over time. TA teams should focus on achievable goals and meaningful incremental change over time rather than moonshot goals that dishearten recruiters and lead to a lack of concrete action.”
If you’ve worked in TA long enough, you’ve probably heard your fair share of lofty goals like “we need 50% of our engineering team to be women.” On paper, it makes sense: statistically, women make up approximately 50% of the U.S. workforce. However, this doesn’t mean it’s realistic to expect you’re going to be able to hire them for every role. This is a fine aspirational target, but to keep the conversation grounded in reality (and to keep your recruiters motivated), it’s important to know what other similar companies are doing. That’s where industry benchmarks come in.
Industry benchmarks provide real data points about how similar companies perform on metrics like outreach stats, passthrough rates, offer accepts, and more. Benchmarks allow you to make more accurate comparisons of where your organization sits relative to your peers.
For example, an IT services company with 150 full-time employees (FTEs) based in Seattle, Washington, will have a much different benchmark for underrepresented talent than an automotive manufacturing company with 3000 FTEs based in Dallas, Texas.
Gem’s Talent Compass lets you customize your benchmarks to provide tailored data points that allow you to build trust and drive better conversations with leadership and your recruiters.
When we’re looking at URG representation throughout the hiring funnel, it can be easy to group URG populations together into broad categories like women, Black, LatinX, etc. However, this does not take into account variations that may exist within each specific group (Black males, LatinX women, etc.) which is why including intersectionality in your goal planning can make a huge difference.
Sheilesha Willis: “At an organization I worked at, we were initially looking at hitting specific targets for underrepresented groups as a whole at different stages. However, when we dug a little deeper into our funnel data, we found that women as a whole were passing through the funnel, but Black and LatinX candidates weren't passing through at the same rates, and Black and LatinX women were passing through at even lower rates. So we needed to pull them apart and have separate hiring targets and passthrough rates for each of the different groups.”
Luckily, Pipeline Analytics gives you unparalleled visibility into the health of your hiring funnel and allows you to see how specific URGs enter, move through, and drop out of your process—allowing you to identify these sticking points.
As much as we would like to believe parity exists in gender and ethnicity across job functions, the fact is, it doesn't (not yet, at least). Because of this, there will inevitably be variations in underrepresented talent between different departments and roles, which should be reflected in your hiring goals.
Sheilesha Willis: “In my experience, hiring managers’ flexibility in skill set and experience tends to be very different by role. Take EPD [engineering, product, and design], for example. Within EPD, product and design positions will likely have a much broader talent pool to source from since you don’t always have to go to school for those kinds of roles. However, engineering is very different—there is often a greater focus on pedigree, companies they've worked for, schools they've attended, and whether or not they were able to deliver on certain projects in certain companies.”
Think back to our women in engineering example. If your company aims to increase the percentage of women in engineering roles (and it should!), instead of setting a goal that reflects the 50% population of women in the workforce, use benchmark data to determine what a reasonable goal might be and focus on sourcing for women engineers whose skills, scope, and impact align with those roles within your organization.
Looking at Gem’s benchmark data, we see that the percentage of women hired for engineering roles was 38% in Q2 of 2022. Using this data, you can set your stretch goal to something around 40-45% and progress from there. This will keep your organization above the industry average without putting too much pressure on your recruiters to hit an achievable target.
This is one of the most under-appreciated yet essential factors in setting diversity goals (and another reason benchmarks are crucial in setting realistic hiring targets). When selecting your goals, you have to consider how large your company is and the sheer number of candidates you’ll need in your hiring pipeline to hit your goals.
If you set a goal to increase the percentage of LatinX workers at your organization by 5%, first you have to figure out what it means in terms of actual hiring count. At an organization of 200 FTEs, that translates to 10 hires. However, if you work at an enterprise company with 3000 employees, that same 5% translates to 150 new URG hires (not counting employee attrition). This may or may not be a feasible goal based on your organization’s hiring pipeline, passthrough rates, and recruiter bandwidth. Here again, looking at benchmarks from similar size organizations can help shape the conversation with your leadership team about setting realistic goals based on where your company is now.
Sheilesha Willis: “When I’m setting hiring goals, a big factor I look at is company size. At a smaller company, it will take fewer hires to achieve a higher proportion of talent from underrepresented groups; but as you continue to scale, it becomes a bit more difficult to keep pace since you may have saturated certain markets. So for an enterprise-level company, I might set the representation goal at 20% underrepresented talent, whereas at a small organization, I might bump that number up to 30%.”
One of the significant unintended outcomes of COVID was that overnight many companies wholly abandoned the notion that all workers had to come into one central office regularly. Once the workforce went remote, previously-untapped labor markets opened up, giving new life to burgeoning tech hubs like Miami, Chicago, Atlanta, Houston, etc., and opened up opportunities to better attract talent from underrepresented groups (URGs) who may not want to leave their communities and support networks.
Sheilesha Willis: “After 2020, most of us went remote, and it really opened up the labor market. So if you ask me as a DEI&B practitioner, I'm going to say you should be looking for the best talent nationally. It shouldn't matter where they are because you'll have great talent hubs in different places. I meet with the leadership team and gauge their level of comfortability with expanding their searches outside of traditional tech hubs like San Francisco or New York. Once I do this, I set targets based on a combination of the URG representation in more conventional talent hubs as well as the ones that may have a higher concentration of tech talent from underrepresented groups.”
While the population of URG tech workers in a traditional hub like Silicon Valley may only be 9.6%, this number significantly increases to 34.6% in an emerging tech hub like Atlanta. These are two vastly different benchmarks to take into consideration when setting your hiring goals for underrepresented groups. To address these differences effectively, meet with your hiring manager(s) and discuss whether the role you’re filling is currently and/or likely to remain remote. This will give you an indication of a goal that reflects the market your recruiters should be targeting.
Just like URG populations change based on department, geographic location, etc., they also vary based on seniority level. To be genuinely dedicated to improving diversity, your organization has to be committed to increasing URG populations at all levels of the organization. However, even among “progressive” companies, the percentage of URGs at the individual contributor level is often much greater than that at the mid-to upper-management level.
Amazon is a classic example of this. A 2020 report found that among Amazon’s nearly 400,000 U.S. employees, 63% of its warehouse and call center roles (i.e., the lowest-paying roles) were held by Black, LatinX, Native American, or multiracial workers. That same report found that those same groups held only 18% of Amazon’s corporate and tech roles. To Amazon’s credit, since 2020, they have taken steps to increase the number of URGs in executive and senior leadership positions; however, this shows how seniority can play a big role in URG populations.
Sheilesha Willis: “Generally speaking, as you move up in level, there is more of a focus on hiring people who have done the jobs vs skills they’ve acquired and new experiences they can apply to the role, so diversity within individual contributor (IC) levels tends to be much higher. As you get into manager and executive levels, representation tends to taper off. Because of this, you may want to set more aggressive targets and put more emphasis on building diverse internal pipelines for managers and executives versus ICs. Or maybe you're seeing good representation at the IC and executive levels, but you’re lagging in the middle manager position. So it's really a combination of the state of the broad labor company.”
Setting your goals is a great first step in building a more equitable and resilient workforce. However, once the goals are set, the work is not done. You must constantly check your progress quarterly, monthly, or even weekly to see how the processes you’ve put in place are working to move the needle toward your goals.
Sheilesha Willis: “A lot of goal-setting is trial and error. You can’t just set a goal at the beginning of the year and keep it there without making adjustments along the way—it takes intentionality and constant monitoring. If you don’t see any movement toward your goals, the question is, why? Look at your hiring pipeline and see what stage of the process URG talent is dropping out. Are recruiter or hiring manager biases to blame? Or is it a top-of-funnel issue, and there is simply not enough URG talent entering the process in the first place? Maybe the local market is saturated, and it’s time to expand your search state or nationwide.”
Creating a set of well-thought-out inclusive hiring goals is the best way to hold your TA team accountable for increasing representation and creating a more equitable workplace. Following the tips we’ve covered in this article will give you an excellent foundation for building trust and having more productive conversations with all internal stakeholders and allow you to set better, more attainable goals based on data instead of “moonshots.
If you'd like to learn more about how to use real-world data to compare your internal demographics to the total available talent market, identify gaps in your org, and define realistic DEI goals for your team then download our Tech Recruiting Diversity Benchmarks whitepaper.
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