Diversity Recruitment

Striving for a diverse workforce is a dominant issue for human resource professionals. Its evolution in
human resources has given diversity a new face. But a simple definition of diversity is different for
each organization. Today diversity in the workplace encompasses more than the traditional view that
focuses primarily on gender and race. It has taken on a much broader definition. The changing
demographics of the labor force and marketplace are making it necessary for companies to step up
their diversity recruitment programs. According to the Society for Human Resource Management,
leveraging workplace diversity is increasingly seen as a vital strategic resource for competitive
advantage.

What is Diversity?
What is your organization’s definition of diversity? Today, there is more to diversity than just gender
and race. It has evolved from anti-discrimination compliance to focusing on inclusion, and the impact
on a company’s bottom line. Diversity in today’s workplace refers to racial minority groups, ethnic
minority groups, women, older persons, persons with disabilities, persons of nontraditional sexual
orientation, persons for whom English is a second language, and other nontraditional groups.
According to one human resource generalist, another dimension of diversity even includes
characteristics that influence our lives and our value systems. Some of these include geographic
location, income, religion, recreational habits, educational background, work experience, parental
status, and marital status. So, there is no one set definition. The definition of diversity depends on the
organization and its stage of development regarding workforce diversity.

Why is Diversity Recruiting Important?

Diversity recruitment is good for business. Diversity recruiting is important to a company’s
profitability. In today’s global economy, buying power rests in the hands of people from all walks of
life. To appeal to this large customer base, companies need to hire people from all walks of life. By
employing a diverse workforce, companies can tap into their specialized insights and knowledge about
the marketplace. This is why it is becoming increasingly important for a company’s makeup to reflect
the makeup of their customer base.
Diversity recruitment is also important if a company wants to build a quality workforce.
Demographic changes that are affecting the labor pool and available talent will make diversity
recruitment a growing factor in the coming years. Companies will have to adjust to the
changing demographic composition of the labor force to stay competitive in today’s
marketplace. What are some of these demographic changes that will affect the labor force in
the coming years?

The labor force is becoming more diverse. Minorities are the fastest-growing part of the labor
force. The growth rates for diverse groups are projected to be faster than the rate for whites.
The Hispanic labor force is projected to grow by 34 percent from 2004 to 2014. The
Asian labor force is expected to grow at a comparable 32 percent. The African American
labor force is projected to grow by 17 percent from 2004 to 2014. The labor force of
women is expected to grow by 11 percent during this period.

In contrast, the labor force of white men is only expected to grow by 7 percent during this
period. As a result, 57 percent of the labor force will be women and people of color by
2014, reaching nearly 92 million. White men will be a minority, only representing 43
percent of the labor force or 70 million by 2014.

The workforce is aging. The labor force will be affected by the aging of the baby-boom
generation-persons born between 1946 and 1964. The labor force will continue to age, with
the number of workers in the 55-and-older group projected to grow by 49.1 percent. This is
nearly 5 times the 10 percent growth projected for the overall labor force. With competition
for talent growing, companies are becoming increasingly concerned about how to retain older
workers.

The workforce is becoming more global. Over the next 10 years it is hard to believe that North
America and Europe are only expected to produce 3 percent of the world’s new labor force,
while 75 percent of the new entrants will come from Asia.

Advantages to Having a Diverse Workforce

Companies that diversify their workforces will have a distinct competitive advantage over
those that do not, especially in the coming years. There are several predominant factors that
motivate companies to have diverse workforces. A recent report from the Society for Human
Resource Management identifies six key reasons recruiting a diverse workforce should be part
of an organization’s strategic goals and objectives:

1) Greater adaptability and flexibility in a rapidly changing marketplace

2) Attracting and retaining the best talent
3) Reducing costs associated with turnover, absenteeism, and low productivity
4) Return on Investment (ROI) from various initiatives, policies and practices
5) Gaining and keeping greater/new market share (locally and globally) with an expanded diverse
customer base
6) Increased sales and profits
Another advantage of having a diverse workforce is being able to utilize its knowledge when it
comes to relating to different groups in the marketplace. This is becoming very
important as purchasing power in the United States starts to shift in the near future. According
to the Selig Center for Economic Growth, the purchasing power of minorities in our country
will outpace that of whites in the next five years. For example, in 2009, the combined buying
power of African Americans, Hispanics, Asian Americans and Native Americans is expected
to exceed $1.5 trillion. This is more than triple the 1990 level, by a gain of $1.1 trillion, or 242
percent! The buying power of whites, in comparison, is only expected to increase by 140
percent. Imagine having a diverse workforce to help reel in the immense buying power of our
future minority population.

Positive community relations are another advantage of employing a diverse workforce. When
companies develop outside relationships or partnerships with minority communities and
suppliers, they are building a reputation for goodwill and establishing themselves as an
“employer of choice.” In the long run, a company can experience lower turnover once it has
built a favorable reputation and a more positive employer brand. These positive external
relationships help it to better attract the best talent.

Building and Maintaining a Diverse Workforce

An effective diversity recruitment program can provide companies with a valuable competitive
advantage. Competing for skilled and talented employees is challenging, and will become even
more challenging as demographic trends change the labor force. In addition, competition from
other countries, lower education levels of U.S. workers compared with other countries, U.S.
immigration challenges, and fear of terrorism in the U.S. add to the stress of competition. To
make the task more difficult, the retirement of the baby boomers in the next 10 years makes
retention of older workers a key concern. For these reasons, an organization needs to be
prepared and take steps to help turn an average diversity recruiting program into a “shining
star”.

Use Referrals
Referrals can be a powerful tool for diversity recruitment programs. Diversity referrals work
well when current and former employees can adequately market your organization. Employee
referral programs should routinely measure employee perception. This way, both current and
former employees are empowered with the information necessary to express why they work
where they work, and why someone might want to consider joining them. There are four ways
to improve the effectiveness of an employee referral program:

1) Find out what current and former employees are saying.

2) Determine whether any employee demographic groups have more negative perceptions than
others.
3) Develop methods to communicate with employees and actively manage their perceptions.
4) Persistently push out stories to employees that provide unique and compelling reasons why
diverse individuals would want to work for your organization.
Offer Incentives, Recognition, and Rewards
Few companies are offering rewards for identifying or hiring diverse people. Employees can be
given a small reward for just identifying the names of diversity candidates. Rewarding
managers for great diversity recruiting is a must. About 5 to 10 percent of all individual hiring
managers’ pay should be based on diversity recruiting and retention results. The success of
diversity recruiting could also be tied to senior management pay, as well as the director of
recruiting and the vice president of human resources.

A company can make itself more appealing to its diverse workforce by increasing employee
satisfaction. For example, benefits and workplace programs such as reward initiatives, flexible
work arrangements, and phased retirement are appealing to older workers.

Establish College Relationships

Establishing relationships with colleges is another good way to diversify the workforce.
Companies can establish ties with the student chapters of minority professional organizations.
One way is to sponsor scholarships for school minority groups such as the student chapter of
the National Black MBA Association. Bringing in students as interns is another effective
strategy, with the idea of eventually hiring them to participate in a management training
program.

Connect With External Diverse Professionals, Organizations and Communities

In addition to building college relationships, companies can build other outside relationships
with minority organizations. Relationships with community and philanthropic groups also help
companies with their long-term diversity efforts. A program that recruits from part-time
schools, community colleges and other post-high school educational programs can help pull in
more minorities.

Components of a Successful Diversity Recruitment Campaign

Establish Clear Goals
A successful diversity recruitment campaign starts with clear goals. Having a plan for building
and maintaining a diverse workforce will give organizations an extra edge for when those
changes come. For a diversity program to work, a company must make sure that goals are
tailored to the needs, issues and goals of the organization and its core values and priorities. The
goals of a diversity recruitment program must be communicated throughout the entire
organization in an effort to achieve both internal and external objectives. All levels of
employees should be made aware of the importance and function of diversity recruitment
program objectives. Training is one good way to accomplish this. Once these internal
objectives are reached, it makes it easier to reach external goals. Employees are better able to
assist the organization in their efforts to identify key diversity candidates.
Build the Business Case for Diversity
Powerful and effective arguments need to be made for excellence in diversity recruiting. For a
diversity program to work, an organization must build a “business case” or economic case to
managers for having a diverse workforce. Top management must support diversity for reasons
more than just avoiding legal issues or to be politically correct. They have to be made aware of
the business and monetary impact that diversity recruiting can have on the bottom line of an
organization, pointing out the many advantages of having a diverse workforce. Senior
management must be committed to the vision to provide strength to the program and must be
held accountable for results. According to an article by the Society of Human Resource
Management (SHRM), “creating a culture of inclusion requires leadership commitment
throughout the entire business enterprise.”

Use Market Research

Human resource professionals should make use of the latest market research to diagnose and
improve their existing diversity recruitment campaign. Market research can benefit diversity
recruitment in two important ways: identifying candidate demographics, and identifying their
job selection decision criteria. Market research can help an organization understand “who” it is
trying to sell to, and their basic demographics. Market research also helps identify what these
candidates expect in a job through the use of surveys and focus groups.

Build Diversity Message into Company Employment Brand

Another very important way to make diversity recruiting more effective is to build a diversity
message into your recruitment brand. Minorities need to be shown that a company is a good
place for them to work. Get the word out that your company is a good place to work by using
referral programs, sponsoring minority- or women-based events, providing unique workplace
benefits, use award programs to recognize employees, and use your recruitment website to post
your company’s core values and profile individual employees.

Use Metrics
Using data about their workforce can help companies track results and identify diversity
management concerns. Metrics help identify strengths and weaknesses in a diversity
recruitment campaign. They can also help support the business rationale for diversity, because
metrics provide a true measurement of why diversity matters. Employees and management
need proof that diversity is a business issue and has strategic importance to organizations.
 Using HR Metrics to Track Diversity Recruitment
According to a recent survey by The Conference Board, over three-fourths of human resource
professionals indicated that they expect their use of human capital measures to help meet
strategic goals will increase over the next three years.

Effectively measuring diversity initiatives has been a struggle for many companies. For some,
measuring results is tough because the necessary data needed to measure diversity has not been
collected. For example, diversity programs usually produce intangible results such as improved
communication or improved teamwork. Once these intangibles are converted into monetary
values, companies can determine their Return on Investment (ROI). Following are traditional
tools used to measure diversity:

ƒ Equal employment opportunity and ƒ Accountability and incentive assessments

affirmative action metrics ƒ Cooperation
ƒ Employee attitude surveys ƒ Conflict
ƒ Cultural audits ƒ Decisiveness
ƒ Focus groups ƒ Employee Tardiness
ƒ Management and employee evaluations ƒ Communication
ƒ Training and education
ƒ Customer surveys

Research shows that broader measures are likely to be more comprehensive and can better
demonstrate the business impact of diversity management. Companies can establish broader
organizational metrics in the following six categories:

• Demographics • Productivity/profitability
• Organizational culture • Benchmarking
• Accountability • Programmatic measures

Measuring the ROI of diversity

There are several intangible variables linked to diversity results that can be converted to
monetary values. These include:

ƒ Attitude survey data ƒ Customer satisfaction survey data

ƒ Organizational commitment ƒ Customer complaints
ƒ Climate survey data ƒ Customer response time
ƒ Employee complaints ƒ Teamwork
ƒ Grievances ƒ Cooperation
ƒ Discrimination complaints ƒ Conflict
ƒ Stress reduction ƒ Decisiveness
ƒ Employee turnover ƒ Employee Tardiness
ƒ Employee transfers ƒ Communication
There are five basic steps for converting intangible results into monetary values:

1) Identify a unit of measure that represents a unit of improvement

2) Determine the value of each unit
3) Calculate the change in performance data
4) Determine an annual amount for the change
5) Calculate the total value of the improvement

The Diversity Return on Investment (DROI) is calculated by using the diversity initiative cost and
benefits to get the Benefit/Cost Ratio (BCR). BCR= diversity initiative benefits divided by diversity
initiative costs. This ratio is also called a Cost-to-Benefit ratio.

The DROI calculation is the net benefit of the diversity initiative ÷ the initiative costs: DROI% = (net
diversity initiative benefits ÷ initiative costs) x 100. This is the same basic formula used to evaluate
other investments in which the ROI is reported as earnings divided by the investment.

Here is an example: the initial cost of a diversity awareness program may be $50,000. The measurable
value of the program is determined to be three years. During a three-year period, the program will
have a net savings of $30,000 ($10,000 per year). Since the average book value is about half the cost,
the average investment in this case is $25,000 ($50,000 ÷ 2). The average ROI = annual
savings/average investment ($10,000/$25,000) = 40 %.

Barriers to Success
A significant barrier to the success of a diversity recruitment campaign is the lack of knowledge about
the advantages of having a diverse workforce in the first place. Workplace diversity is not usually seen
as a means of increasing sales and profits. Instead, diversity staffing is often mistaken for affirmative
action or even as reverse discrimination. Another barrier to success is the myth that diversity staffing
has never been proven to work.

Another barrier to the success of a diversity recruitment campaign is that the educational levels of
some minorities are historically lower than other demographic groups. Consequently, recruiters are
still challenged to find enough people to fill certain positions. Overall, 31 percent of non-Hispanic
whites age 25 and older have a Bachelor’s degree or higher. Among diverse groups, Asians are
generally educated to a higher level than other minorities. In fact, 49 percent of Asians age 25 and
older have a Bachelor’s degree or higher. In contrast, only 12 percent of Hispanics and 18 percent of
Blacks age 25 and older have a Bachelor’s degree or higher. Also, although Blacks are better-educated
today and are much more aware of opportunities than they were even 10 years ago, fewer are enrolling
in high-demand technical college programs such as engineering and other sciences.
Even just plain geography can be a barrier to recruiting diverse candidates. Minorities tend to live in
urban areas. Hiring Asians to more rural areas or even small cities is challenging because they live
primarily in coastal cities. The greatest gain in Asians over the past decade is in cities such as New
York, Los Angeles, and San Francisco. To help solve this problem, some companies have set up small
offices in urban areas so that employees who prefer to live in the city can still be employed by them.
Adjusting work polices to allow more telecommuting and virtual work can help give companies that
leading edge in recruiting a diverse workforce.

One more thing that can be a barrier to the success of striving for a diverse workforce is lack of clear
goals. Determining your company’s definition of diversity is a first step. It is important to make clear
the purpose and goals of a diversity recruitment program so a company can assess successes and
effectiveness of the program.

Conclusion
The definition of workforce diversity is still evolving. Because companies all have different needs to
fill in terms of diversity, and are at different stages in developing their workforce, their definition of
diversity will be different as well. Once an organization has decided what diversity means, that
definition should be used to create specific diversity program goals and be communicated to the entire
organization. It is important for the entire workforce to realize that there are more than just legal
reasons why a diverse workforce is advantageous. Providing a strong business case to senior
management that diversity has direct impact on profit is imperative. Using metrics can help an
organization track progress of a diversity recruitment program and find strengths and weaknesses.
Metrics can also help prove that diversity recruitment is important to a company’s bottom line. At the
same time, a company needs to communicate that it really is a great place to work, and include its
diversity message in its employment brand.