How inclusive hiring drives business success

• See why it’s essential to keep your workplace diversified and inclusive.
• Learn how HR technology solutions can help achieve these goals.
• Check out how a company can be challenging but immensely rewarding.

To many, “diversity” may seem like a buzzword — something leaders pay lip service to without producing tangible results. And, given the distance we have yet to cover in attaining equality in the workplace, the focus on diversity remains paramount.

Diversity, Equity, and Inclusion (DEI) are key concepts in organizational and social contexts, each with a distinct meaning:

• Diversity refers to representing different and unique characteristics among people in a specific setting, like a workplace or community. These characteristics may include race, ethnicity, gender, age, religion, disability, sexual orientation, education, and national origin. Diversity acknowledges and values individual differences in perspectives, life experiences, and cultures.
• Equity means ensuring fair treatment, access, opportunities, and advancement for all people while seeking to identify and remove barriers that prevent some groups from fully participating. In contrast, equity involves recognizing different people’s needs and circumstances and providing the resources and opportunities to achieve equal outcomes.
• Inclusion is about creating an environment where all individuals feel welcomed, respected, supported, and valued to participate fully. An inclusive environment empowers individuals to bring their authentic selves to the table, ensures that diverse voices are heard, and integrates diverse perspectives into decision-making processes.

Together, these concepts aim to create an environment where diverse individuals have equal access to opportunities and resources and where their differences are valued and integrated into the fabric of the community or organization.

Merely expressing a desire for diversity won’t lead to a surge of applicants at your company’s door. Without deliberate efforts, there’s a risk of reverting to homogeneous workplaces. Businesses need to pursue a variety of candidates proactively.

Inclusive hiring is a recruitment strategy that goes beyond recognizing the importance of diversity; it actively embraces the needs of a diverse range of candidates, ensuring that hiring practices level the playing field for everyone. This approach helps to overcome unconscious biases that can influence hiring teams. Inclusive hiring not only combats discrimination but also makes candidates feel valued and empowered throughout the recruitment process.

Numerous academic studies have shown that biases against minorities are prevalent among hiring managers. A study by Marianne Bertrand and Sendhil Mullainathan published at the American Economic Association in 2004 explored racial bias through a “resume audit” method. In this study, identical resumes were sent to various employers, each bearing a randomly selected name. The researchers observed that resumes with names typically associated with Black individuals (like “Lakisha” or “Jamal”) received fewer interview invitations compared to those with names commonly perceived as white (such as “Emily” or “Greg”). This finding highlighted the influence of racial bias in the hiring process.

To many, “diversity” may seem like a buzzword — something leaders pay lip service to without producing tangible results. And, given the distance we have yet to cover in attaining equality in the workplace, the focus on diversity remains paramount.

Diversity, Equity, and Inclusion (DEI) are key concepts in organizational and social contexts, each with a distinct meaning:

• Diversity refers to representing different and unique characteristics among people in a specific setting, like a workplace or community. These characteristics may include race, ethnicity, gender, age, religion, disability, sexual orientation, education, and national origin. Diversity acknowledges and values individual differences in perspectives, life experiences, and cultures.
• Equity means ensuring fair treatment, access, opportunities, and advancement for all people while seeking to identify and remove barriers that prevent some groups from fully participating. In contrast, equity involves recognizing different people’s needs and circumstances and providing the resources and opportunities to achieve equal outcomes.
• Inclusion is about creating an environment where all individuals feel welcomed, respected, supported, and valued to participate fully. An inclusive environment empowers individuals to bring their authentic selves to the table, ensures that diverse voices are heard, and integrates diverse perspectives into decision-making processes.

Inclusive hiring considers the needs of candidates with cognitive differences, varying abilities, educational backgrounds, socioeconomic statuses, and more. By expanding hiring practices to include all, companies can attract a broader pool of candidates, enhancing the likelihood of finding the right fit — someone who excels in their role and contributes to company growth.

The inclusive hiring process actively acknowledges and values candidates’ diverse qualities and perspectives. It’s not merely about hiring individuals from underrepresented backgrounds or with disabilities to meet quotas. Instead, it seeks to create a fair playing field for all applicants, combating recruitment biases and discrimination.

Historically, many laws have been enacted to prevent workplace discrimination, underscoring the illegality of denying career opportunities based on individual characteristics. These laws define the rights and responsibilities of employers and employees, emphasizing the importance of employers familiarizing themselves with these regulations to ensure equitable hiring practices.

Inclusive hiring also involves recognizing the myriad forms of diversity in the human experience. While focusing on protected classifications can keep a company legally compliant, inclusive hiring goes further. It bases hiring decisions on the job-related skills and attributes each candidate brings, some of which may deviate from the norm. The tendency to recruit people similar to ourselves or repeatedly hire the same types of individuals indicates an unconscious bias that has no place in recruitment.

The journey starts with how you present job openings. Job descriptions are often the initial point of contact with potential employees. These descriptions should be welcoming and inclusive to draw in diverse applicants.

Clearly defining the essential qualifications required for the position is critical to address this. Avoid overwhelming candidates with excessive requirements — the so-called “everything but the kitchen sink” approach. Also, avoid coded language that might inadvertently discourage women or other underrepresented groups. Thoughtfully crafted job descriptions can attract a broad spectrum of candidates, irrespective of gender, race, or background.

Organizations often encounter various challenges that can impede their efforts. Addressing these challenges is crucial for creating a diverse and vibrant work environment. Here are some common issues and potential solutions:

• Unconscious bias. Recruiters and hiring managers often have unconscious biases influencing their decisions, leading to less diverse candidate selections. Implement training for all employees involved in the conscious hiring process. Utilize HR tech tools like AI-driven resume screening to help minimize human biases.
• Limited talent pool. Organizations sometimes struggle to attract a diverse range of candidates, often due to limited outreach or unappealing employer branding. Broaden recruitment efforts to include diverse job boards, universities, and community organizations. Rework employer branding to appeal to a wider demographic.
• Inadequate inclusive policies. Lack of clear policies and practices that support diversity and inclusion can deter candidates from diverse backgrounds. Develop and publicize clear diversity and inclusion policies. Ensure that these policies are reflected in the company culture and values.
• Reliance on traditional recruitment methods. Traditional recruitment methods may inadvertently favor certain groups and exclude others. Incorporate new recruitment technologies and platforms. Experiment with methods like blind recruitment, where identifying details are removed from resumes.
• Cultural and structural barriers. Existing company culture and structural barriers can hinder the integration and retention of diverse hires. Foster an inclusive company culture that celebrates diversity. Provide mentorship programs and diversity training to all employees.
• Inadequate accessibility and accommodation. Failure to provide adequate accessibility and accommodation can exclude candidates with disabilities. Ensure that the recruitment process is accessible. Make necessary accommodations during interviews and in the workplace.
• Lack of diversity in leadership. A lack of diversity in leadership roles can perpetuate a non-inclusive work environment. Implement leadership development programs for underrepresented groups. Set diversity goals for leadership positions.
• Ineffective measurement and accountability. Without proper metrics and accountability, it’s difficult to gauge the effectiveness of inclusivity efforts. Establish clear diversity and inclusion metrics. Hold leaders and HR accountable for meeting these objectives.
• Economic and geographic limitations. Economic or geographic factors can limit the ability of diverse candidates to access certain job opportunities. Offer remote work options and relocation assistance. Expand search areas to include underrepresented regions.
• Compliance and legal concerns. Navigating the legal aspects of affirmative action and equal employment opportunity laws can be complex. Consult legal experts to ensure compliance with all relevant laws and regulations while striving for diversity.

From a business perspective, inclusive hiring practices provide many benefits. The employer is obliged to consider each candidate equally, but also the reputation of the organization.

Inclusive hiring practices strengthen a company’s reputation for attracting talent in a competitive market. Four in five (86%) candidates worldwide say DEI in the workplace is critical to them. Research has shown that diverse talent on board leads to higher performance, innovation, and productivity levels. It also helps increase employee retention rates, contributing to a positive organizational brand.

And there is something else.

Inclusivity creates the foundation for a diverse workforce that reflects the customer base. It bolsters the organization’s reputation as an entity that values diversity and inclusion. Laying the groundwork for recruiting a diverse pool of candidates is a crucial initial move toward fostering an inclusive workplace atmosphere. It has a positive effect on your organization’s profits. Indeed, evidence shows that businesses with a diverse workforce financially outperform the national average for their industry.

In terms of sustainability and growth, inclusive hiring practices support the future of any organization. Even before the pandemic, many companies turned to hiring from the global talent pool, which helped them get ahead of skills and knowledge shortages.

Research by McKinsey & Company reveals that firms in the top quartile for racial/ethnic and gender diversity outperform financially, showing 36% and 25% higher returns, respectively. However, progress in leadership diversity could be faster. Analysis of Gartner’s 2014 and 2017 global datasets indicates a sluggish increase in ethnic diversity among executive teams.

Implementing an inclusive hiring strategy is the most ethical approach to workforce development and shields companies from adverse exposure and disparate treatment claims. It can be damaging to any organization and very costly. According to 2020 data from the US Equal Employment Opportunity Commission (EEOC), there were 67,448 allegations of workplace discrimination, leading employers to incur $439.2 million in legal fees and settlement costs.

Modern HR technologies, including AI-powered platforms and data analytics tools, have revolutionized recruitment. These tools bring efficiency and objectivity to the hiring process, addressing traditional biases and promoting a more inclusive workforce.

Technologies like AI for resume screening and blind recruitment tools help mitigate unconscious biases. They focus on candidates’ skills and experiences rather than personal attributes unrelated to job performance, such as race, gender, or age.

Examples include AI algorithms that impartially assess resumes and platforms anonymizing applicant data, ensuring a focus on qualifications and competencies alone.

HRForecast has a significant cultural diversity, boasting 15 nationalities among its 60 employees. This diversity isn’t just a statistic; it’s reflected in how teams are formed, with members from various cultures collaboratively addressing specific tasks. Focusing on DEI helps us make a positive difference in the lives of our employees and millions of employees worldwide. We’re excited to be members of Charta der Vielfalt, promoting our company’s diverse practices.

Gender diversity is another strong suit, contributing to a dynamic workforce. The company’s organizational structure complements this diversity, characterized by minimal hierarchy and a focus on skills rather than rigid roles. This approach emphasizes flexibility and adaptability in team structures.

HRForecast’s success lies in the synergy between its diverse workforce and its progressive organizational model. We advocate for a shift from traditional role-based structures to a skills-focused model, enhancing the utility of existing workforces while planning for future diversity in terms of culture, age, and gender.

HRForecast, a key player in the HR tech arena, offers solutions to foster diversity and inclusivity in organizations. For example:

• Upskilling with smartPeople. This tool identifies skill gaps and offers upskilling opportunities, ensuring all employees have access to growth and development regardless of background.
• Internal recruiting and talent mobility. Organizations can leverage their workforce’s diverse skills and perspectives by focusing on internal talent resources, enhancing inclusivity.
• Strategic workforce planning with smartPlan. This application helps organizations analyze workforce structures and plan for future needs, considering diverse skill sets and roles.
• Market Intelligence insights. Market intelligence solutions use global labor market data to predict future job roles and skills, helping companies stay ahead in a diverse and evolving market.

Organizations can significantly advance their diversity, equity, and inclusion goals by integrating tools like HRForecast into their recruitment and workforce planning strategies. These technologies enable businesses to build a skilled, efficient, diverse, and inclusive workforce, reflecting today’s global and multifaceted nature.

BASF SE, a global chemical industry leader with over 115,000 employees, partnered with HRForecast to tackle a pivotal challenge: predicting and improving female representation in leadership roles by 2025. The importance of diversity in driving success and innovation, BASF aimed to set realistic targets for increasing female leadership and understanding talent management dynamics. HRForecast, utilizing its expertise in workforce analytics, analyzed BASF’s historical data on promotions, hires, and attrition.

Results
The collaboration led to developing the Internal Development Model (IDM), which forecasted female representation in various scenarios, focusing on leadership roles. This project provided BASF with diverse future scenarios, actionable insights on levers to enhance diversity, and global socio-cultural benchmarks for comparison. Gerhard Müller, Head of Diversity & Inclusion at BASF, highlighted the project’s value in supporting target setting and defining effective measures for achieving diversity goals. This initiative marks a significant step toward fostering a diverse and inclusive work environment, particularly in its leadership echelons.