No one can dispute the inherent benefits of diversity in the workplace. A diverse and inclusive organization amplifies the number of potential hires—which means access to the most talented candidates. A variety of backgrounds in your business means a variety of perspectives—which leads to unique innovations.
Plus, a culture of inclusion translates into a happier, more productive workforce. Indeed, studies show greater diversity yields greater profits. McKinsey research shows that “companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
McKinsey studies have also shown that companies with diverse leadership outperform their peers. “For companies ranking in the top quartile of executive-board diversity, returns on equity (ROEs) were 53 percent higher, on average, than they were for those in the bottom quartile … earnings before interest and taxes (EBIT) margins at the most diverse companies were 14 percent higher, on average, than those of the least diverse companies.”
How to Build Diversity in Your Organization
Despite these tangible benefits, some employers struggle to maintain a staff made up of people with diverse education, races, ethnicities, sexual orientations, ages and religions.
We asked members of the Entrepreneurs’ Organization to share best practices for promoting and maintaining diversity and inclusion. Here’s what we learned:
1. WALK THE TALK.
Your core values tout a culture of inclusion. Great. But do your benefits and day-to-day actions back it up?
Tim Hamilton is the founder and CEO of Praxent. He explains, “One major contributor to our success is ensuring that the benefits that we offer represent our core values—in particular, our spirit of inclusion and belonging.”
Toward that goal, he says that implementing paid parental leave is a must—but only the first step. Praxent is also a designated Mother-Friendly Worksite by the Texas Department of State Health Services. The company’s Employee Assistance Program (EAP) provides counseling, wellness services and legal advice to accommodate their diverse needs.
The founder of Polar Notion, Morgan J. Lopes admits, “I’m a heterosexual, white, bearded, male…in tech. My lived experience is steeped with more privilege than I can imagine (or comprehend). I advocate strongly for diversity within our organization because I believe when much is given, much is required.”
To enhance diversity at his organization, Lopes says his staff began by defining what diversity means to them. Additionally, “our executive team actively works to expand our network beyond typical connections. We’ve pursued relationships with diverse affinity groups that we haven’t historically known exist or been invited into.”
“It’s customary for people to avoid topics that make us uncomfortable,” Lopes explains. “Diversity is no exception. To combat this, our team began reading more literature about diversity and forcing our top leadership to have more uncomfortable conversations. A great book I’d recommend for more shrewd businesspeople: The Diversity Bonus. The book makes a compelling case for the business value of diversity, especially in knowledge work.”
2. EXPAND YOUR TALENT POOL.
At Flow Marketing, founder and CEO Andy Seth proudly shares that his team comprises 64 percent women and 43 percent people of color. “We created a two-year apprenticeship for low-income youth. Since racial/ethnic minorities make up 58 percent of low-income households, this increases our chances of hiring people of color.”
Seth says, “We also send our job listings to nonprofits who serve the black community like the Urban Leadership Foundation and the National Urban League. This helps us broaden our pool.”
At Polar Notion, recruiting for a role kicks off with “a two week sprint focused on extending job listings into more diverse communities and pursuing diverse candidates outside our current network. I think of it as ‘giving diversity a head start’”.
Then, explains Lopes, “If at least 30 percent of our pool of final candidates don’t represent what we consider diversity then we interpret that as a sign that we didn’t fill the pipeline with enough diversity, so we start again. It’s one of the most expensive diversity practices we’ve implemented, but it’s effective. You push harder earlier if you know too homogenous of a group will bite you later.”
3. REMOVE BIAS FROM THE HIRING PROCESS.
Sound simple? Beware. “Unconscious bias takes many forms and can have a pernicious, though often unintentional, effect”, says Hamilton.
To eliminate bias in hiring, begin by recognizing that we all carry some level of prejudice—whether conscious or unconscious. The key is crafting an objective hiring process designed to limit bias.
Mark Fitzsimmons is the president of Psychometrics. He believes that “diversity can be built by selecting the people best suited for the job, measured objectively during the selection process—not through the biased lens of interviews, going for lunch, looking at names on resumes—or only picking people who graduate from certain colleges”.
At Praxent, “diversity recruiting efforts begin in the job descriptions. Ensuring that the language reflects the inclusive environment to which we continually aspire is paramount to welcoming and receiving a diverse set of applications”, Hamilton explains.
“We’ve taken great effort in recent months to carefully analyze and rewrite every one of our job descriptions in order to limit any terms that might undermine this environment of inclusion, favoring (as an example) gender-neutral adjectives, such as ‘solid’ over ‘strong’”.
During candidate evaluation, the team at Praxent uses scorecards that clearly define the skills that an individual must possess. To avoid potentially dangerous “groupthink”, they avoid discussing their thoughts about a candidate until each person has completed the objective scorecard.
Praxent also “ensures the language in our scorecards and transcripts refrains from words or descriptors that might bias anyone reading them. For example, instead of using pronouns, we favor language such as ‘the candidate’ or ‘TC’”.
Likewise, Lopes recommends assigning a team member to anonymize job applications so hiring managers don’t know gender, race or ethnicity until deeper in the hiring process.
At Flow Marketing, Seth’s team “does not ask candidates for previous salaries so that we don’t create bias in our pay structure. This means we pay everyone equally based on the position.”
For more insights and inspiration from today’s leading entrepreneurs, check out EO on Inc. and the EO blog.
Categories: BUSINESS GROWTH Hiring LEADERSHIP