3 Drastic Ways to Improve Diversity Hiring

I was on a Fortune 250 company’s website recently and clicked over to its careers page. A career talent-acquisition professional, I’m always curious to see what the company’s career page looks like and how it compares with the rest of the site. When it loaded, I was presented with multiple pictures depicting a “typical” workday at the company. The smiling faces in those pictures were as diverse as an ad for United Colors of Benetton.  The visuals were paired nicely with plenty of well-written copy about the various employee resource groups and other inclusion efforts. It all looked and felt very good.

Then I started to dig a little deeper (like any good candidate will!) and brought up the page with the senior leadership team. This page also had plenty of pictures, but this time it looked like the GOP congressional leadership!  

Curiosity piqued, I decided to check out a few other companies and came to find that this dichotomy wasn’t unique. What an incredible message for your diverse candidates. Welcome to our organization — just don’t hit your head too hard on the glass ceiling!

In 2004, I took the AIRS Certified Diversity Recruiter course. Fourteen years later, diversity recruiting is still an issue and we continue to have the same conversations. We need to drastically change the way we hire diverse populations that goes beyond networking and branding.

Diversity is an issue that spans candidate attraction, selection, onboarding, inclusion, and more.  This article focuses on the selection process and proposes three key changes the talent acquisition team can make to positively impact diversity hiring.

Let’s start with some facts about diversity hiring:

Lack of Diversity is Costing Your Company Millions

It’s been well documented that a diverse workforce leads to a better bottom line for companies. In an article Why Diversity Matters, McKinsey reports that there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes rise 0.8 percent.

Using information from Datahub.io, the median EBITDA for the S&P 500 is $1,700,000,000. That means a small 10 percent increase in the diversity of the senior-executive team for an average S&P 500 company would drive $13,600,000 to the bottom line!

Diversity Unemployment is an Issue

Even with unemployment at historically low levels, diverse populations have significantly higher unemployment rates. Recently published BLS Data looking at the unemployment numbers for both males and females over the age of 25 reports that the national unemployment rate is 3.2 percent.  

That same data shows that White and Asian people have significantly lower unemployment rates than the national average (see chart below). White people have an unemployment rate 12.5 percent better than the national unemployment rate of 3.2 percent, and Asians are more than 21 percent better!

Looking at the same demographics for Black and Latino people, we see that Blacks over the age of 25 have an unemployment rate that is a staggering 81 percent higher than the national unemployment rate, and Latinos have a rate that is 22 percent higher!  

Race Total White Black or African American Asian Hispanic or Latino
Year 2017 2017 2017 2017 2017
25 Years & Older 3.2 2.8 5.8 2.5 3.9

In addition to unemployment rates, statistics show that diversity, especially gender diversity, is an issue at the senior leadership level. A Fortune article in 2017 suggests that men accounted for 80 percent of all senior leadership roles in the Fortune 500. That same article quotes the Fortune 500 as having 32 female CEOs, but that number is expected to drop to 24 in April 2018. The numbers are quite similar for the S&P 500. where only 26 (5.2 percent) companies have female CEOs.

Bias Exists

Your stakeholders are biased. I didn’t use the word unconscious by design. While unconscious bias is an issue, it’s only one of the biases influencing your selection process. If you’d like to understand more about bias, much has been written about the topic and a simple Google search will provide you with enough information to write a thesis.  

Speaking with TA leaders I have relationships with, they agree that without strict direction, a hiring manager is likely to hire using the following hierarchy in the selection process:

  1. The person with the background that most closely resembles their own.  
  2. The person who looks the most like the hiring manager in the mirror.  
  3. In the absence of either of those options, the prettiest person who walks in the room will be the candidate to get the offer.

Understanding that both conscious (explicit) and unconscious (implicit) bias is driving that type of behavior is a key factor in creating a solution. When combined with the fact that diverse populations have higher unemployment rates and diversity is good for the bottom line, we need to make some drastic changes to improve our outcomes.

3 Drastic Changes to Improve Diversity Hiring in 2018

Hold recruiters accountable for a diverse slate

Recruiters need to be held accountable for providing a diverse slate of candidates to the hiring team.  Using demographics based on job category and geography (readily available through tools like TalentNeuron), each recruiter needs to be responsible for providing a slate of candidates that is reflective of the external population. Success will be achieved when the recruiter’s slate is at least a 67 percent match to the demographics of the external population.

At the end of the year, if the recruiter does not meet this standard on 75 percent of all slates submitted, annual bonuses and increases should be at stake.

Blind resumes

Change your submittal process to the hiring manager. Strip away everything on the resume except for previous experience, and make your new initial internal submission to the hiring team a profile that only includes a candidate ID and the experience portion of the resume. No names. No education. No affiliations.

For most companies and roles, the name and contact information on the internal submittal is irrelevant. The same holds true for education. While most positions have some sort of education requirement, it can be assessed by the recruiting team and is not necessary on the initial internal submission.  

Once a hiring manager has decided on an interview slate, then the full resume can be shared.

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This process is not perfect and must be paired with the consistent use of an interview guide. Consistently using an interview guide will establish better comparisons in the debrief session and help combat bias.

There is additional work associated with this step for your recruiting team, because the majority of applicant tracking systems do not have the functionality to automate this step.  

Hold hiring managers accountable for a diverse team

The last change is the most provocative and most likely the hardest to implement. Like the recruiting team, a hiring manager’s bonus should be at stake if their team is not diverse. In addition, I propose challenging your leadership team on their commitment to diversity by taking the NFL’s Rooney Rule one step further.  

No offers will be generated or extended for departments that do not meet the standard of a 67 percent match to the demographics of the external talent pool. Departments not meeting the diversity standard will be required to include the HRVP and a senior operational leader in the selection process in order to present an offer.  

If the first two steps are not enough to drive diversity hiring into the organization, then we must increase the oversight on our departments that are out of scope.

The numbers don’t lie. Diversity is an issue and it’s hurting your bottom line. Making these three changes to the selection process could have a dramatic affect on diversity hiring at your company.

John Ricciardi

John Ricciardi is a self-proclaimed ski bum who passes the time between trips as a managing partner with Afton Consulting Group, a global human resources consulting firm. Ricciardi is a global talent acquisition leader with 20 years experience developing, implementing, and leading the recruiting function. His experience as a practitioner includes both agency and corporate settings, where he managed large teams and created strategic solutions for organizations that include global process development, employment branding, ATS selection, and RPO implementation/management.