When it comes to diversity in hiring, businesses are their own worst enemy

Today’s business leaders are using yesterday’s tactics in an attempt to address tomorrow’s problems.
Jonathan McBride Contributor Jonathan McBride is the former global head of inclusion and diversity at BlackRock and previously served as director of the Presidential Personnel Office in the White House. Rasheed Sabar Contributor Rasheed Sabar is co-founder and co-CEO of Correlation One. More posts by this contributor

Over the past year, companies have continued to make ambitious pledges to address bias and systemic racism in the hiring process. But the track record of previous corporate diversity efforts is shaky at best. Is this time going to be different?

The answer will depend on whether companies are able to look inward to understand and dismantle the long-standing practices that too often keep skilled workers locked out of opportunities. That’s because when it comes to equity and inclusion in hiring, businesses are often standing in their own way.

It’s not that hiring managers and corporate executives don’t want to effect change. Rather, over the past year, well-meaning business and HR leaders invested in short-term, one-time solutions — like hosting events or donating to nonprofits. Make no mistake: Those aren’t necessarily bad ideas. But they’re not systemic and they’re not sustainable. It’s like saying where you’re going on vacation without building the roads you need to get there.

Today’s business leaders are using yesterday’s tactics in an attempt to address tomorrow’s problems.

This reliance on tried-and-true solutions is common across nearly every facet of society — hence the popular proverb that military generals “fight the last war, not the next one.” Today’s business leaders are using yesterday’s tactics in an attempt to address tomorrow’s problems. And if companies don’t take a more strategic, data-driven approach to diversity, we’re going to look back a year from now and find that despite the best of intentions, no more progress has been made.

What will it take to make good on our good intentions and put that systemic change into action? Research — and our own experience as corporate leaders — points to a few potential solutions.

First, stop thinking of the college degree as the best proxy for skills. A body of research indicates that the correlation between educational attainment and job performance is weaker than we might think — and that degree requirements systematically disenfranchise Black and Hispanic candidates.

Not only that, but screening based on a bachelor’s degree automatically leaves out 60% of American workers, including the more than 70 million people without four-year degrees who have the skills to succeed in higher-wage jobs (sometimes called STARs, for Skilled Through Alternative Routes).

Companies can take action right away to address this challenge. That could include new strategies that measure skills directly. IBM has long been a pioneer in this space through its commitment to skills-based hiring, which enables the company to make hiring decisions based on what candidates can do, not the pedigrees they’ve earned.

It could also include following the lead of companies like Capital One, which hires based on aptitude — and provide internal learning and development and on-the-job training opportunities to help new hires learn the skills they need to succeed on the job. The advantages of these approaches are obvious: Hiring based on skills rather than degrees opens up a much wider talent pool, increases value in terms of wages and can lead to more loyal employees and higher retention rates.

Second, recognize that when it comes to how you invest your budget and effort, training is at least as important as recruiting. As the pace of technological change accelerates and the need for digital talent grows, it’s become increasingly clear that talent poaching is an “expensive zero-sum game” that leaves companies scrambling — and paying a premium — for the same small pool of talent.

This challenge is even more acute in the context of diversity and inclusion. If Company X recruits a minority candidate who’s already had a successful career at Company Y, has that really contributed to building a more inclusive workforce in any meaningful way? The net number of workers in the industry is the same — you’re just playing musical chairs with the labor market. That may be appropriate for senior leadership roles, but it will never grow the top of the funnel if the same strategy is applied to entry-level or more junior positions.

The real way to move the needle isn’t simply to commit to hitting diversity numbers for your organization — which all too often incentivizes lateral hiring from competitors — but to provide jobs and career advancement opportunities to those who otherwise are unemployed or underemployed. Investing in training can support these efforts by both expanding the talent pool and giving companies a better return on their investment than traditional recruiting models.

Last but not least, facilitate better communication within the enterprise. No one sets out to build inequitable talent pipelines. But talent-acquisition professionals — like most professionals — have limited time and huge remits. As a result, especially in technology and data-oriented fields, there is a growing disconnect between HR departments that post jobs and the business departments that leverage the talent.

For understandable reasons, HR departments aren’t directly connected to the workflows for specific roles, which often leads to job descriptions that include laundry lists of requirements and look like “buzzword salad.” This ends up turning away the best and the most diverse talent, who often screen themselves out because they don’t meet every single requirement.

Building stronger connections between hiring managers and the rest of the enterprise can help create a clearer understanding of what skills are most important — and keep businesses from screening out qualified candidates before they even get a chance to prove themselves.

Systemic change is never easy. And that’s especially the case in a recovering economy and a tightening labor market, where businesses are under more pressure than ever to fill open roles. But inflection points like this one also create opportunities to think and act differently, rather than falling back on the status quo. From the C-suite to hiring managers and other frontline decision-makers, times of turmoil and transformation may be the best opportunity to translate aspiration into meaningful action.

That’s the challenge that stands before U.S. businesses now: investing in a more systemic approach to equity and inclusion so that we can build a world of work that reflects the values to which we all aspire.

Companies should utilize real-time compensation data to ensure equal pay

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