The Bottom-Line Benefits of Enacting an Inclusive Hiring Strategy

Society is filled with people of different races, religions, sexual orientations, gender identities and abilities. Our workplaces should reflect this reality.

To make certain this happens, hiring professionals need to adopt an inclusive recruitment strategy. Not only will it make organizations more diverse, but it will help the company itself grow, too.

Attorney Michael Ford, writing at IP Inclusive, puts it simply: “Our workplaces should reflect the society in which we live and diversity is the reality of that society.”

Ford also offers a business case for diversity. A workplace that celebrates difference fosters innovation and creativity, he says. A greater variety of life experiences means teams of people with different perspectives with which to solve a problem. And a company that solves problems creatively tends to stand out from the crowd.

Consider McKinsey & Company’s 2015 Why Diversity Matters report, which says inclusivity is a wise strategy for businesses. The paper’s co-authors, Vivian Hunt, Dennis Layton, and Sara Prince, reveal that companies in the top quartile for gender, racial and ethnic diversity tend to have higher financial returns compared with the national industry medians.

The writers are quick to note that “correlation does not equal causation,” but the evidence suggests company leaders that commit to diverse leadership are more successful. They can attract better and more varied candidates as well as improving customer orientation, employee satisfaction and decision-making.

Employees Need to Mirror Diverse Customer Base

In an economy with an increasingly diverse customer base, Ann Pickering, HR director at O2, says it’s “business-critical” that a company’s workforce reflect its customers. People do not want to support organizations that do not reflect their values.

While a diverse workforce is attractive to customers, the McKinsey researchers say it is safe to assume that any kind of diversity — whether based on age, sexual orientation or experience — is also likely to bring a competitive advantage to companies.

In the US, data shows that for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise by 0.8 percent.

Additionally, it appears racial and ethnic diversity impacts financial performance more than gender diversity. The authors suggest this could be due to earlier efforts to boost women’s representation in the top levels of business, which have already yielded positive results.

This makes sense considering what researchers at the Credit Suisse Research Institute discovered in their global study of 2,360 companies between 2005 and 2011. Their results showed companies with one or more women on the board delivered higher returns on equity and better average growth.

Whether or not race or gender yield greater profits, the point is that diversity is positive economically. Dennis Nally, at PwC, agrees with the necessity to make inclusivity a fundamental aspect of any organization. He presents four reasons why:

• It’s the right thing to do. Creating equal opportunities for everyone leads to social progress.
• It’s good for business. PwC’s Annual Global CEO Survey shows 85 percent of the CEOs running companies with a formal diversity and inclusiveness strategy reported better bottom lines.
• If you don’t, you’ll lose out. Workplace equality is a hallmark of modern business. PwC research shows when it comes to millennial candidates, 86 percent of women and 74 percent of men consider employers’ policies on diversity before taking a job.
• Diversity plugs the talent gap and boosts society. It increases the talent pipeline while also raising GDP. A Catalyst report shows increasing female employment can help raise GDP by 5 percent in the US, 11 percent in Italy and 27 percent in India.

Organizations Ranking Highly for Diversity

Great Place to Work CEO Michelle Bush and EVP Kim Peters say employees internalize what they see. Writing at Fortune, the pair argue that workers want to recognize aspects of themselves when looking at their colleagues. It gives them hope. They feel they can approach leaders and be listened to when sharing ideas and opinions.

Hope fuels commitment, they write, which leads to innovation. It also means that it will be easier to attract and retain “A-team players of all types.”

Bush and Peters, through their organization’s collaboration with Fortune, compiled a list of 50 companies that rank high on inclusivity. The companies that made the 2016 Best Workplaces for Diversity list generate an average of 24 percent more year-over-year revenue growth than those that didn’t.

We wanted to call out to five high rankers from that list. Their scores were generated from employees’ reviews of their organizations:

Ultimate Software came in at 98 percent, thanks to Vivian Maza, chief people officer and company secretary.

Dropbox scored 94 percent under the watchful eye of Neil Frye, global head of recruitment, operations & technology.

Salesforce also hit the 94 percent mark. Senior director of recruiting Mark Grimwood is yielding solid results.

SAP America scored 93 percent due to the work of David Malloy, head of talent acquisition.

Workday scored 93 percent under the hiring strategy of Lorraine Toole, senior manager in talent acquisition.

Inclusive Hiring Needs to be Holistic

Diversity is good for profit margins and team morale. These are some important considerations when building an inclusive workforce.

A guide from the Wall Street Journal says hiring needs to happen holistically, with a significant focus on retention —  not just recruitment.

This becomes more important when companies span large geographical areas and often relocate staff. Minority employees may feel disconnected after being sent to an area that does not feel inclusive. This can be ameliorated by taking an active role to help them adjust to new work culture, as well as the broader community.

As with all recruitment drives, hiring professionals need to have an accessible network of candidates. When it comes to diversifying this pool, try approaching local organizations with community connections, churches, cultural institutions and colleges. Nonprofits such as the Urban League or the National Council of La Raza can also provide entry into a diverse group of potential hires.

A post from the team at PAYCHEX WORX says an inclusive hiring strategy means having a diverse recruitment team. This attracts a wider variety of candidates with a host of different backgrounds or orientations. It sends a clear message that inclusivity is part of the company culture.

An Inclusive Hiring Strategy Deepens the Pool of Candidates

Being able to attract a diverse range of candidates is important, especially as employers struggle to fill positions. An “untapped resource,” according to Richard Koroscil, CEO of the Ontario Chamber of Commerce, is people with disabilities.

Not only will hiring managers have more skilled people to choose from, Koroscil says, but “business will see improvements in productivity, increased engagement with employees, less turnover and reduced costs to training when hiring employees with disabilities.”

Inclusivity Does Not Mean Lowering the Bar

This is something with that Randy Lewis, former senior vice president at Walgreens, agrees. Speaking at an event organized by the National Disability Institute, Lewis said that when disability is at the center of a corporation’s diversity and inclusion strategy, productivity and profits will soar.

A sad reality among many employees and hiring managers is the erroneous belief that people with disabilities cannot perform as well on the job as others.

However, with more than 1,000 employees with disabilities working at Walgreens, Lewis says this belief is “untrue and unfair. We didn’t lower the bar when it came to performance, but we did have to open the door wider to include those who are routinely overlooked. The results exceeded our wildest expectations.”

Social Shift Toward Inclusivity

When changes in business begin to happen, it’s worth checking out what the big organizations are doing. Often what is happening at Google, for instance, indicates what is happening in broader society and, as a consequence, what will happen in business. Jessica Guynn at USA Today writes how the tech giant has spent hundreds of millions of dollars to promote diversity in the company as well as in the tech industry.

While not the magnitude of Google, hotel heavyweight Marriott International has added its voice to the argument for inclusivity.

In a rousing open letter to President Donald Trump, Arne Sorenson, president and CEO at Marriott International, wrote: “Everyone, no matter their sexual orientation or identity, has a right to live without interference in their private lives.

“Similarly, everyone, no matter their sexual orientation or identity, gender, race, religion disability or ethnicity should have an equal opportunity to get a job, start a business or be served by a business.”

Hiring managers looking to add value to their workforce and the organization’s bottom line will be well served by an inclusive hiring strategy. It will yield a diverse workforce that is adept at innovation and creativity from the integration of fresh perspectives.

The data present a strong financial argument for diversity. It is also a socially conscious way to do business. In closing, we’d like to borrow a poignant reminder from diversity advocate Verna Myers: “Diversity is being invited to the party; inclusion is being asked to dance.”