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Talent Management

As Companies Crack the Diversity Code, Leadership Teams Still Lag

Promoting more entry-level diversity hires doesn’t necessarily do much to diversify an organization’s senior leadership ranks.

diversity_editedLike several Silicon Valley counterparts, tech giant Intel last year went public with its lack of employee diversity. The company is openly sharing its efforts to correct the problem. In an interview with NPR, Intel CEO Brian Krzanich discussed his company’s diversity initiatives and concluded that the “pipeline problem,” or the idea that there aren’t enough qualified diverse candidates, is overhyped, saying, “If the pipeline was such a big problem, I would have come back as a failure.”

It’s true the pipeline problem is somewhat improving — at least at the entry level — for companies like Intel that have the budget to invest in targeted recruitment programs. As more companies formalize diversity initiatives, partner with educational institutions and community organizations, and train their hiring managers on the effects of unconscious bias, they will be able to bring in more diverse talent in their junior and mid-level ranks. For example, Apple reported a 50 percent increase in the number of African-Americans hired in 2015 compared to 2014, and a 66 percent increase in Hispanics.

But this improvement is not producing greater diversity representation in the C-suite. In 2014, only 4 percent of Fortune 500 CEOs were minorities, and only 5 percent were women. Move down the corporate ladder into the executive ranks and the percentages do not improve. According to DiversityInc, Hispanics make up less than 4 percent of senior management in U.S. companies. African-Americans make up less than 3 percent, and Catalyst reports that women of color are virtually absent at the senior-level and above in S&P 500 companies.

Why aren’t minority employees making it to leadership levels? There are a number of reasons:

  1. Problems with retention and sponsorship. When employers build diversity and inclusion initiatives, they often recruit diverse entry-level talent and assume their work is done. But if these employees don’t see a clear career path, or if they see a leadership team consisting of mostly white men, they are unlikely to stay for a sustained period of time.

Companies should focus on making all levels of the organization more diverse — from the entry level to senior leadership ranks. As baby boomers retire from the C-suite, companies have more opportunities to do just that. The leadership team, specifically the CEO, must be personally invested in diversity. Without buy-in at the top, associated programs will not be taken seriously across the organization.

If minority employees are not organically rising through the ranks of the company and their white counterparts are, it’s likely they are not being given the opportunity to create the relationships that so often lead to recognition and promotions. Mentorship programs, in which a senior employee mentors junior diverse talent, can be effective.

  1. Failing to focus on inclusion. Far too many organizations forget about the inclusion component of diversity and inclusion programs. If companies want their young, diverse talent to become the next generation of leaders, they need to create a culture that truly embraces diverse opinions, perspectives, and lifestyles.

There are number of ways to achieve this. For instance, create diversity committees with representatives from all company levels, commit to working with diverse vendors and partners, and make diversity goals a transparent part of the overall strategic plan. Companies also can focus on flexible work schedules, accommodations for religious holidays, childcare subsidies, and diversity-friendly dress codes. All of these efforts contribute to a consistent company message: We value and appreciate diversity.

  1. A lack of data and accountability. Like any corporate program, diversity and inclusion initiatives must be evaluated against agreed-upon benchmarks. Doing so will allow companies to demonstrate and share results, and make adjustments for better outcomes.

Diversity and inclusion programs should have clear goals, ideally based on existing employee diversity figures and the demographic make-up of the talent pool in the company’s industry and region. Companies also should identify metrics they will track to measure success. According to a Forbes Insights study, the most popular metrics for monitoring a diversity program’s success are employee productivity, employee morale, and employee turnover.

Finally, there must be a system of accountability. Sodexo ties executive bonuses to diversity goals to ensure they remain a priority, and other companies like Intel are following suit.

Building diversity at the leadership level isn’t impossible, but it does take intentional, long-term strategies and a concerted effort from the entire company: rank-and-file staff, HR and leadership. By focusing on retention, inclusion and the appropriate metrics, companies with ambitious diversity goals can cultivate their next generation of leaders.

Susan Medina and Peter Gomez lead the diversity practice at Battalia Winston, an executive search firm. Comment below or email editors@workforce.com.

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