| Rebounding from the Recession |
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Billy Dexter, Kurt Ronn, Cedric Thurman The recession sent many organizations running for cover. Some were forced to cut staff, budgets and programs to stay afloat. Diversity was one area that took a hit. But as the following conversations show, organizations with a long-term view of recovery didn’t stint on diversity efforts despite internal or external pressures. Cedric Thurman Companies that viewed diversity and inclusion as “the right thing to do” scaled back to focus on their core business during the recession. This mindset assumes diversity and inclusion is something one can get back to when the economy turns around and indicates a lack of understanding of how diversity and inclusion connect to the business strategy. When the economy does rebound, companies will be sourcing talent from a labor pool that is far more diverse than it has ever been. A company’s reputation will become more important; its values will become more important; and how it handled employees in the last down cycle will become more important. If potential employees perceive that a company viewed diversity and inclusion as “the right thing to do” it runs the risk of losing out on good talent or, worse yet, hiring employees who have no plans to remain there long term. Moral of the story — companies do not scale back on things they think positively impact their business, in good or bad times. My organization is not planning a “recovery” strategy as that assumes we changed our focus on diversity and inclusion during the recession. Diversity and inclusion are core values of our firm, just like our clients, our people, winning, excellence, teamwork, trust, integrity and respect, regardless of the economy. There are several realities regarding the future of diversity. First, no one can deny the demographic shift that is occurring. Any company in need of employees will need to master how to attract, develop and retain a workforce that will look different, behave differently and have different needs. For example, the economic downturn has eroded wealth for those planning to retire. As a result, there are more generations in the workforce. This creates its own unique dynamics. We have engaged in two wars that will place more veterans in the labor market than ever before — all returning with varying abilities and support needs. Our country continues to debate the legality of gay marriage. Despite personal views on the issue, employees will have expectations regarding domestic partner benefits. Are companies prepared to address the breadth and depth of these needs? Demographically, our country is shifting to a minority majority. Have companies prepared employees for the different leadership styles that will inevitably emerge? What about the continued influence of women in the workforce [and] their emergence as middle managers and senior leaders? This will impact leadership styles, corporate culture, decision-making processes, benefits programs, etc. With respect to the consumer market, companies understand their revenue source has been [changing] and will continue to change. In the future, smarter companies will not react to the changes diversity brings; they will be in front of the changes. Companies that understand how diversity connects to the business strategy will reap the rewards in market share, stock price, employee engagement, and brand recognition and customer loyalty. The biggest mistake practitioners could make in the new environment is hold on to the singular belief that diversity is the right thing to do. Be able to connect diversity and inclusion to the business strategy, and create an environment where everyone understands how diversity and inclusion impacts their ability to be successful in the company.
Kurt Ronn The current recession has been very disruptive to diversity and inclusion goals at many companies. The focus for the short term is repositioning. Human resources departments have been focused on reductions in force (RIF), restructuring, dealing with increased benefits expenses [and] uncertainties, and adjusting to rapidly changing employment laws. Companies still see diversity and inclusion as critical to success. However, there are new complexities from a recruitment perspective. Companies can easily lose traction and relationships as roles are eliminated, consolidated or changed. Even well-established affinity groups are challenged. As staff numbers and outreach budgets dwindle, those remaining must find ways to do more with less. Diversity needs to be tied directly to business objectives. The strongest programs are those owned by the entire organization and [those that] are a part of daily business. Human resources can provide training and communicate objectives and recruitment strategy, but the real effort must come from hiring managers, who must be equipped to make informed decisions that improve organizational diversity while reaching business goals. But without accountability, change will be slow. Senior-level executives need to make diversity accountability a regular part of their operational review. Such a review should consider the current census, available candidate pool and actual hiring. Affirmative action plans should be discussed with demographic data. Affinity groups should cross-pollinate and help invigorate each other. By sharing best practices and learning, groups can leverage reduced budgets and focus the message on business objectives. The era of “feel good faith” diversity plans is over. Diversity needs to demonstrate tangible results based on a sound business plan. Without an actionable, measurable plan, diversity initiatives will fall to the wayside at the very time there is an unprecedented opportunity to make a difference. Business is global; organizations need to have a better understanding of cultural differences and opportunities. Even within the United States, much of the opportunity for growth is in diverse, multicultural pockets. Technology makes it possible to market to small, niche groups more cost-effectively than ever before. Companies that appreciate differences will be better positioned to maximize sales. On the liability side, smart employers realize the Internet provides a more diverse pool of candidates. A job posted to a corporate career site or a national job board can result in a diverse pool of hundreds, even thousands of applicants. Hiring managers need to be aware of available pool demographics versus actual job hires. In an electronic recruitment world with candidate demographic data stored in applicant tracking systems, poor recruitment execution could result in expensive failure-to-hire cases. Currently, both the Equal Employment Opportunity Commission and the Office of Federal Contract Compliance Programs are focused on systemic hiring by recruitment stage. Proper recruitment and hiring practices can mitigate the risk of adverse impact and improve the diversity of the employee population. However, improper consideration or disposition of applicants can result in large settlements and negative press. Employee satisfaction is also important. As the economy recovers, the population will have more employment options. Building a diverse and inclusive work environment can improve retention and recruitment. But diversity is no different from other business initiatives; without buy-in at all levels of the organization, the initiative will fail. If C-level management supports diversity as a mission-critical business objective, the organization will execute the plan. However, mandating change is not enough. The top must ensure support from all levels through accountability by building metrics and reporting. Additionally, training needs to be developed and implemented so everyone understands the business objective and how to achieve the goal. All levels of the organization need to understand that achieving diversity business objectives is critical for company success. The world is diverse; the ability to succeed is dependent upon an organization's ability to embrace differences and translate them into opportunities. Kurt Ronn is the president and founder of HRworks. Billy Dexter I don't think the recession has changed the perception of diversity and its importance for our clients. Companies that have integrated diversity as a part of core business strategy have stayed the course and used this lull to continue to support their diversity efforts and become more focused on driving measurable results. However, I do think some have put plans or budgets on hold because of economic uncertainty. The recession has caused many companies to delay hiring efforts until there is more stability in the global market. In 2010, companies will increase hiring efforts and put a premium on the recruitment of women and people of color as the call for more diversity at the executive and board levels gets louder. Heidrick has renewed its commitment to diversity by creating innovative diversity and inclusion solutions to support our clients' needs to build their leadership teams. Also, H&S has made a commitment internally to become more diverse across all levels within the firm, to better reflect our global client base and create alliances with leading diversity advocacy groups that will allow us to grow our cultural intelligence and expand our networks. The future is bright for diversity and inclusion. Our country's leadership is more diverse than ever in our history and has become a leading example to the world on inclusive leadership. The demographics of our population continue to become more diverse as emerging global markets provide unique opportunities for all companies and sectors. Our available talent pool is being dominated by women, immigrants and people of color, factors that impact the global economy that are not going away [and] will continue to grow during the next decade. Companies will have to become more culturally competent and be prepared to embrace a workforce that is not only ethnically and gender diverse but includes baby boomers, Gen Xers and millennials on the same team. One of the biggest mistakes practitioners can make is not integrating diversity and inclusion into business strategy, making diversity programmatic. Practitioners should become change agents and strategic business partners who can point to measurable results of how their diversity and inclusion strategy has impacted the business. This strategy has to have buy-in across all business units and be relevant to current market conditions. Diversity practitioners have to put in the same rigor and analysis as any business strategy that is implemented across the company and must be held accountable for driving results. We're talking beyond just creating the business case. Everyone knows you need support from the top, but the CEO and executive team have to become stakeholders, embracing diversity and practicing inclusion as they would any other business strategy. Leadership has to put skin in the game for diversity and inclusion to get traction and become part of the DNA of the corporate culture.« Billy Dexter is a partner at Heidrick & Struggles.
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