Diversity in Hiring: Why Businesses Hinder Themselves

Addressing Bias and Systemic Racism in Hiring: A Critical Juncture

Throughout the last year, numerous organizations have publicly committed to addressing bias and systemic racism within their hiring procedures. However, the historical effectiveness of prior corporate diversity initiatives remains questionable. The crucial question is whether this renewed focus will yield genuinely different outcomes.

The Need for Internal Examination

Achieving meaningful change hinges on companies’ ability to engage in honest self-assessment and dismantle established practices that frequently exclude qualified individuals from opportunities. Often, businesses inadvertently impede their own progress toward equity and inclusion.

It’s not a lack of desire for change that hinders progress. Instead, many well-intentioned business and HR professionals have focused on short-term, isolated solutions – such as hosting events or making charitable donations. While these actions aren’t inherently negative, they lack the systemic nature and long-term sustainability required for lasting impact.

Avoiding Yesterday’s Solutions for Tomorrow’s Problems

This tendency to rely on familiar approaches mirrors a common societal pattern – the proverb that military leaders “fight the last war, not the next one.” Contemporary business leaders are applying outdated tactics to address future challenges. Without a strategic, data-driven approach to diversity, we risk finding ourselves in the same position a year from now, with minimal progress despite sincere intentions.

Key Strategies for Systemic Change

What steps are necessary to translate good intentions into concrete, systemic change? Research, coupled with practical experience, suggests several potential solutions.

Rethinking the Value of College Degrees

First, organizations should reconsider the emphasis on a four-year college degree as a primary indicator of skill. Evidence suggests the correlation between educational attainment and job performance is often weaker than assumed. Furthermore, degree requirements can systematically disadvantage Black and Hispanic applicants.

Screening solely based on a bachelor’s degree excludes a significant portion of the American workforce – approximately 60%, including over 70 million individuals without four-year degrees who possess the skills needed for higher-paying positions, often referred to as STARs (Skilled Through Alternative Routes).

Skills-Based Hiring: A Pioneering Approach

Companies can immediately address this issue by implementing strategies that directly assess skills. IBM has been a long-standing advocate for skills-based hiring, enabling decisions based on demonstrable abilities rather than academic credentials.

Alternatively, organizations can emulate Capital One’s approach, which prioritizes aptitude and provides comprehensive internal learning and development programs, alongside on-the-job training, to equip new hires with the necessary skills. These methods offer clear advantages: expanding the talent pool, increasing wage value, fostering employee loyalty, and improving retention rates.

Prioritizing Training Alongside Recruitment

Second, it’s crucial to recognize that investing in employee training is equally, if not more, important than recruitment efforts. As technological advancements accelerate and the demand for digital skills grows, talent poaching has become an “expensive zero-sum game,” forcing companies to compete for a limited pool of talent at inflated costs.

Beyond Lateral Hiring: Growing the Talent Pool

In the context of diversity and inclusion, simply recruiting minority candidates already successful at other companies doesn’t necessarily contribute to a more inclusive workforce. It merely shifts existing talent within the industry. While appropriate for senior roles, this strategy won’t expand the talent pipeline at entry-level or junior positions.

True progress lies in creating job opportunities and career advancement pathways for individuals who are unemployed or underemployed. Investing in training expands the talent pool and delivers a greater return on investment than traditional recruitment models.

Improving Internal Communication

Finally, fostering better communication within organizations is essential. While no one intentionally aims to create inequitable talent pipelines, talent acquisition professionals often face time constraints and broad responsibilities. This can lead to a disconnect between HR departments, which post jobs, and business departments, which utilize the talent, particularly in technology and data-driven fields.

Streamlining Job Descriptions

HR departments, lacking direct insight into specific role workflows, often create job descriptions filled with extensive requirements and industry jargon. This can deter qualified and diverse candidates who may self-select out if they don’t meet every criterion.

Strengthening collaboration between hiring managers and other departments can clarify essential skills and prevent the premature dismissal of potentially valuable candidates.

Seizing the Opportunity for Systemic Change

Systemic change is inherently challenging, especially during economic recovery and a competitive labor market. However, these inflection points also present opportunities to adopt innovative approaches rather than reverting to the status quo. From executive leadership to hiring managers, times of disruption offer the ideal moment to translate aspiration into meaningful action.

The current challenge for U.S. businesses is to invest in a more systemic approach to equity and inclusion, building a work environment that reflects shared values.