Ethnically diverse companies are 35% more likely to outperform their less diverse competitors.
Gender-diverse companies are 15% more likely to outperform.
The least diverse companies are less likely to achieve above average revenue.
Every time the senior-executive team increases racial and ethnic diversity by 10%, earnings increase by .08%
These stats, taken from McKinsey and Company’s 2015 research on diversity, demonstrate something we all should know intuitively anyway: diversity matters. Different backgrounds and perspectives mean a broader pool of ideas to draw from, which translates into higher productivity and profitability.
But the problem is that most companies still aren’t hitting the bullseye on the diversity target.
Why Top-Down Methods Don’t Work
Research shows that traditional approaches to diversity can backfire, creating resentment among employees and reducing the overall diversity of the organization.
In their study for the Harvard Business Review, Frank Dobbin and Alexandra Kalev found that mandatory diversity training, for example, makes bias worse because it seeks to manage behavior externally rather than motivate internal change—which causes resentment and resistance.
Hiring tests are another great example. Even when companies implement mandatory hiring tests, managers don’t always use them. They don’t like the implication that they aren’t in control of the hiring decision, so they may test some candidates and not others, or they may not weight the tests equally. Many still rely on gut feeling or instinct for the final hiring decision rather than considering a candidate’s performance on the test.
So how can we shift our thinking to overturn bias and promote diversity?
Make Diversity Desirable—And Profitable
It’s extremely difficult to change our biases, even when we want to change them. Sometimes we don’t recognize the bias or see the ways our biases affect our decisions.
But maybe we don’t have to.
One solution to our diversity problem is to stop managing behavior and instead change our environment so that it is easier to make an unbiased decision. Dobbin and Kalev discovered that when we address diversity concerns using strategies like increased engagement with diversity recruiting and mentoring, increased contact between groups, and social accountability, we help employees embrace the value of diversity for themselves, which improves overall diversity, productivity, and—ultimately—profitability.
Five Ways Your HRIS Can Promote Diversity
Technology is an important tool when creating unbiased protocols to support diversity initiatives. The right software solution helps organizations make strides for diversity in recruiting, performance evaluations, employee collaboration, and social accountability. Here are just a few ways your HRIS can help a diversity-friendly environment:
- Analytics—Past data helps predict future behavior. Monitor metrics like pay increases and bonuses, turnover patterns, recruiting and hiring variables, and the ratio between diversity candidates vs. diversity hires.
- Performance Reviews—We’re seeing a shift away from traditional annual performance reviews, and that’s a good thing. More frequent evaluations help managers base ratings on solid data rather than gut feelings. Alerts, journal entries, self-evaluations, and strategic ratings systems all help managers focus on talent and achievement rather than on feeling.
- Recruiting Algorithms—Perhaps not surprisingly, algorithms often make better hiring decisions than humans. That’s because the algorithm will assess each candidate based on the same criteria, identifying candidates most qualified for the position. Once you have a short list of candidates, some software programs will let you hide demographic information in order to encourage unbiased hiring decisions.
- Blind Assessments—During the screening process, you can set up blind assessments to test candidate skills. This prevents unconscious bias toward a certain kind of candidate.
- Mentorships—Mentoring programs help managers get to know a wide variety of employees and learn to appreciate the contributions of different perspectives. Your HRIS can help facilitate communication between mentors and mentees through social platforms and feedback reminders.
Diversity isn’t just about reaching an arbitrary percentage or making everybody happy. It’s about making the best use of all available talent in order to make your business more profitable. The tools available in your HRIS can help you make smart hiring decisions, facilitate collaboration, and promote inclusiveness in the workplace—and that’s good news for everybody.