As the global economic slowdown is upon us, companies are becoming more mindful when it comes to spending their budgets. Organizations are having to make tough decisions that include cuts to departments and staff; we are already seeing this in tech, where Google, Microsoft, Amazon, and others are in the midst of mass layoffs. Alarmingly, we’re also seeing cuts to DEI departments, roles, and budgets which could have detrimental effects to a business’ overall success and longevity.
Throughout the years there has been comprehensive research that proves DEI is not only good for business but also for company culture and morale, which provides yet more evidence that DEI should not fall by the wayside when financial strain arises, and shouldn’t be eradicated in order for companies to downsize or restructure. We know that redundancies disproportionately affect diverse employees and harm diversity; especially since roles such as HR, recruiting, and marketing often make up 20 percent of cuts, and those are usually made up of more women and diverse talent.
But how can organizations address their diversity issues and how can they bring inclusion into recruitment?
Why do companies need to urgently address their lack of diversity?
There are many compelling reasons why companies need to urgently address their diversity, or ‘lack of diversity’, issue.
We’ve already touched upon how diverse companies have better commercial outcomes, but there are also increasing governmental regulations that organizations will have to abide by. In the UK, the Financial Conduct Authority has finalized rules that require FTSE-listed companies to disclose information and report targets on the representation of people of color and women on their leadership teams and board of directors. Companies that are not able to meet these rules will have to explain why they have not reached these targets. And in the U.S., a company looking to list on Nasdaq must abide by their Board Diversity Rules; companies must report on the diversity of their boards and require that they have at least one woman director and a person of color. And this is just the start; more governmental pressure will come for companies who are failing to increase diversity in their workforce.
There is also an increase in employee advocacy, especially from Gen Z workers who are putting a high value on Environmental, Social, and Governance (ESG) when choosing companies to work for. In fact, Deloitte’s Millennial Survey 2022 found that nearly half of employees in senior positions have turned down jobs that don’t align with their values. Those who are satisfied with their employers’ efforts to create a diverse and inclusive environment are more likely to want to stay with at their job for more than five years.
The sentiment is also true at consumer level. There are customers who are becoming more selective about buying from brands that align with their own values, and accountability is a key focus. Consumers are currently seeing the demand for more accountability and transparency in their actions, and they expect more from the services they choose. Not only do they put a high value on inclusivity and diversity when making purchasing decisions, but those who feel that the company has an issue with it are more likely to lose trust on the brand.
How to bring inclusivity into recruitment
The role brief
Companies might have their heart in the right place when looking to hire diverse leaders, however the brief for their preferred candidate often requires them to be an Ivy League graduate with 10+ years of senior management experience at one of the Big Four.
Obviously, due to historical exclusion, differences in education opportunities and a general disparity in the volume of opportunities diverse talent are afforded in all likelihood businesses will find fewer diverse leaders with that experience and background. To be clear, that’s not because they don’t possess the skills; but because systemically they have not had the same opportunities.
Organizations need to switch their thinking from a brief based purely on experience or based on the profile of the previous job holder, and think objectively about the exact skills they need, and should be testing for, within the recruitment process.
Accountability from partners, leadership teams, and boards
Accountability is also key when it comes to any plan for adding diversity and it needs to be driven by the C-Suite and board as a business priority.
With the upsurge of the Black Lives Matter movement in 2020, job postings for DEI roles rose 56 percent between 2019 and 2020, however over two years on, 58 percent of FTSE 100 companies in the UK still have no clear published targets for the representation or inclusion of people of color. Leaders must put DEI as part of their KPIs and rewards for their senior leaders, passing that accountability down throughout the business and with partners.
As some organizations rely on their traditional search partners to bring them completely different kinds of candidates, they don’t hold them to account when this doesn’t happen. Especially when diverse candidates included in longlists are not aligned with the opportunity. Hiring managers need to take responsibility in asking partners or internal teams to explain their methodology for increasing diversity, and pushback if they don’t see an appropriate quality of diverse candidates in longlists and shortlists.
Inclusive recruitment methodology
Having highly skilled diverse leaders in the process is one thing, but if they don’t have a level playing field to compete for the role, they won’t succeed.
Implementing an inclusive recruitment process helps with this, as does ensuring that preparations and adjustments are in place so a candidate’s opportunity is not derailed by one senior stakeholder’s unconscious bias. Objective, performance-based criteria, competency-focused interviewing, panels rather than single interviewers, and taking independent feedback from each interviewer, should all form part of best practice for assessing candidates.
Our Inclusive Recruitment Guide helps companies navigate the best methodology for recruiting from a diverse pool of leaders; exploring how an inclusive recruitment process works, giving insights on how your organization should be recruiting for the best talent, and what candidates are looking for from a company that wants to increase diversity in their leadership teams.
Companies cannot expect to increase diversity from the top down if they are not putting in the hard work to create an inclusive culture where diverse individuals can succeed.
Top talent will always do their research on a company before joining a recruitment process. If they see an organization with a poor track record on inclusion or a high gender or ethnicity pay gap with no clear plan for addressing it, they are unlikely to make them an employer of choice. Also, if there’s a culture where diverse voices are not listened to or are halted in their career progression, then talented diverse leaders will simply leave, and the senior leadership will stay stubbornly male, pale, and stale. And you need to remember that talented diverse leaders are in high demand and will often have options.
Inclusion needs to be much more than an initiative. It needs to be a strategic business priority that is woven into all parts of a business. It needs clear plans, accountability, and resources, and implementing company-wide training programs and workshops to identify and eradicate potential biases at play within the recruitment and onboarding process is essential to create tangible system change.
The historic pace of change has been so slow, and the status quo so well-established, that we need to find new ways of shifting the needle when it comes to creating a business world that is equitable and truly reflects the society it represents