American corporations are not mandated to disclose their diversity statistics. Although many organizations are making bold promises to create initiatives to promote diversity, women and minorities are still underrepresented in leadership positions and the lack of reporting means that numbers may be bleaker than we imagine.
In the black population alone, which makes up 12% of the US population, only 3.2% of black people occupy senior leadership roles and only 0.8% in Fortune 500 companies. Women only occupy 6% of those CEO positions in Fortune 500 companies – and only five of those thirty women are black women. And these are just two groups that diversity programs work to equalize in the workforce playing field. There’s a long way to go.
Despite spending millions of dollars on diversity initiatives, many companies just aren’t hitting the mark. Here’s how to create diversity programs that actually work.
What is a diversity program?
In 2019 in the United States alone, companies spent more than $8 billion on diversity training programs, which demonstrates the need for companies to create effective diversity programs – and that lack of diversity sensitivity and accountability is a prevalent issue in many American companies.
In the workplace, “diversity” is classed as race, ethnicity, age, national origin, sexual orientation, cultural identity, assigned sex, and gender identity. Diversity training and diversity programs in workplaces aim to facilitate positive interactions between these diverse groups of people, reducing prejudice and discrimination.
The aim is to teach different groups of people to work well and positively together, accounting for differences so no one is unfairly discriminated against for having a protected characteristic.
Why are diversity programs valuable in today’s work culture?
Diversity programs are vital for creating inclusive and welcoming environments in the workplace. Having a diverse workforce means that you create a well-rounded team. Each person’s skills, experiences, and expertise will differ which means a better scope for problem-solving.
The SHRM notes that companies with effective diversity programs and an understanding of the benefits of diversity have an “increased success.” Their report “The Effective Management of Cultural Diversity” acknowledges and outlines four layers of diversity with the second layer “gender, age, sexual orientation, race, ethnicity, and physical ability” comprising of characteristics that are “for the most part not choices, yet they influence our treatment in organizations.” They conclude that when the four layers of diversity are well managed, they have the potential to bring “new perspectives, ideas, and viewpoints needed by the organization.” If your company doesn’t represent the melting pot that is the outside population, then you’re missing vital pieces of the success puzzle.
A diverse company culture and successful diversity programs increase employee engagement, employee retention, lower turnover rate, increase positive company reputation, and help you understand your customer base fully – that is if you have a successful program that makes those diverse employees feel valued, included, and welcome. But how do you create these programs?
How to create a diversity program that works
First, you need to understand if your company is diverse or not. It’s important to gather data on what your employees look like. Are most of your employees from the same region, the same gender, the same race, the same education level, similar backgrounds, similar experiences? Do you have representative proportions of employees that are of different races, ethnicities, ages, national origins, sexual orientations, cultural identities, and gender identities?
If your employee population is homogenous, you’ll need to understand why, how it’s holding your company back, and to work on initiatives to recruit more diverse candidates and, most importantly, make them feel welcome in your company culture.
On the other hand, if you do have a diverse population, but they aren’t retained past one year, as an example, you’ll need to analyze why that is. Is the company culture not welcoming to those of diverse backgrounds?
How do I get started?
Again, the first step is understanding where your company stands. One easy way is to build data dashboards, like Employee Cycle’s customizable dashboard, where you can visualize data in one place, engage and share the data with stakeholders, and track your progress.
How do I attract diverse talent?
Second, attracting diverse candidates is done through three ways: representation, compensation, and performance.
For representation, you want to look across the organization as a whole, with new hires, in departments, in role types, in office locations, in cross-functional teams, in management, and individual contributors, do you have a diverse population? If you don’t, then as you grow your company and employees, you will need to consider how to make these roles more attractive to potentially diverse employees.
For example, women tend only to apply for jobs they’re fully qualified for it whereas men apply if they’re around 60% qualified so it may be that you need to write more inclusive job adverts to attract more diverse candidates.
According to The Harvard Business Review, executives understand that diversity and inclusion create more innovation yet they often fail to recruit black people into the workforce because of the explicit bias that black people and leaders face when they are employed by organizations: racism on the job, unfavorable lived experience, etc. Again, women and black people are just two groups in the workforce, but conversations should be had around race and gender (and other diversity factors) and how employee experience differs for employees of diverse backgrounds. Is their lived experience at work worse than other employees and how do you change that? Keep the dialogue open.
How do I retain diverse talent?
Next, comes compensation, from base compensation, variable compensation, total compensation, raise amounts, other benefits, and percentile within a band. Compensation differentiation often accounts for racial and gender inequalities across the board, as our two diversity examples. For every dollar a white man earns, the SHRM note that black men earn around $0.87, Hispanic men earn $0.91 on the dollar, and Asian men earn $1.15 for every dollar of their white male counterparts. Women, on the other hand, earn even less with only earning 84% of what men earn. So, another way to increase diversity is to ensure that your pay gaps for diverse groups are fair and that when assessing increases in wages and compensation, you’re doing so without bias.
One way to determine bias is by analyzing performance review processes: downward reviews, upward reviews, peer reviews, self-reviews, the average time to promotion, the number of promotions, employee NPS, engagement ratings, one-on-one ratings, average tenure, total turnover rate. Are the ways you determine compensation and performance fair and without bias? How can you remove inherent bias from this review process?
For black employees, they receive more scrutiny from their bosses than the equivalent white colleagues and, as this Atlantic article notes, “black workers really do need to be twice as good.” Small mistakes are often caught; they’re given worse performance reviews, lower wages, and sometimes fired in situations where their white counterparts wouldn’t be. Similar situations happen for women where women who have had children are treated significantly worse than those who don’t and even worse than their white male counterparts.
You may look at statistics from your company overall or a specific department with a specific manager. Do diverse employees under certain managers always leave, for example? How many diverse employees you planned to retain left? And why is that?
Finally, you need to look at the retention and engagement for diverse employees. Ensure that you’re fostering equitable practices. Are you retaining diverse employees? If not, why not? How can you better support and cultivate diverse teams? How can you attract diverse talent? What does diverse talent need to be attracted, retained, supported, and fairly compensated in the workplace?
Any diversity program needs to be spearheaded by managers, leaders, and HR in a joint effort to define best practices and to launch a successful program that works for your business.
Understanding your diversity metrics can and will help your company become more successful. But the task may seem daunting to those at the beginning of the project. Many businesses want to be more diverse and more inclusive but don’t know where to begin. Discover how Employee Cycle’s dashboard can help you visualize and advance your diversity program today and how having metrics at your fingertips will help you attract, retain, and fairly reward diverse talent in the workplace. Schedule a free demo today.