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Unlocking the Power of DEI: Building Better Programs for Business and People

Diversity and inclusion programs have moved into the mainstream. According to the global management consulting firm McKinsey & Co., some $8 billion is spent annually on diversity training in the U.S., and positions dedicated to diversity, equity and inclusion (DEI) have quadrupled in the past five years. Unfortunately, these efforts have not always resulted in measurable improvements in diversity. Why do DEI programs fail to deliver? Why invest in DEI in the first place? And how can we build better programs to work for business and people?

READ: How to Hire with Diversity in Mind

What DEI gets wrong 

Extensive research, including studies by Harvard and McKinsey, reveals that common DEI tactics — like mandatory diversity training, processes prohibiting discrimination, and a one-and-done mentality — don’t deliver lasting change, and can even backfire, resulting in increased inequity. Changing mindsets and behavior is hard.  

… and why it’s right 

So, why invest the time and money in DEI? Dozens of research studies document the benefits to businesses: Diverse companies enjoy 2.5 times higher cash flow per employee, have 19% higher revenues, and have better anticipation/coping/adaptation skills. They are more resilient during downturns and are 45% more likely to gain market share, 70% more likely to capture new markets, and significantly outperform the S&P 500.   

Diversity matters. In a Diversity & Inclusion Workplace Survey published by Glassdoor in 2020, three-quarters of all job seekers said a diverse workplace was important to them, including 72% of women, 89% of Black respondents, 80% of Asians and 70% of Latinos. Importantly, customers increasingly demand a commitment to DEI: 57% of consumers prefer brands that address social inequalities. 

Although compelling, the financial and operational case for diversity is exceeded by the benefits people and communities experience. Inclusive cultures value and embrace difference, giving workers equitable opportunities to thrive. Employees at diverse companies are more engaged and more productive, have better physical and mental health and reduced absenteeism. With a sense of belonging and a voice, employees are empowered to contribute more.

READ: Navigating the New Era of Employee Engagement — Everything You Need to Know

Importantly, DEI builds stronger communities and closes persistent equity gaps. Building diverse workforces through properly implemented DEI programs boosts economic opportunity and prosperity for historically underrepresented groups and cures structural mismatches in the economy that exacerbate talent shortages for employers and reduce opportunity for workers.  

DEI that works: a how-to guide 

Successful DEI initiatives begin with the inclusive practice of learning, measuring and educating: gaining a nuanced understanding of the causes, practices and outcomes of inequity and bias, while understanding the current challenges that affected employees’ experience. To foster listening, successful DEI programs establish equity councils and employee resource groups to build bridges and create community.  

Cultural assessments are critical to establishing baselines for how employees and job candidates experience your workplace. Measure diversity and outcomes in recruiting, hiring, retention, promotions, raises and pay equity. Benchmark against industry and geographic peers to gauge your success. 

Build a more inclusive culture by addressing unconscious or implicit bias, which occurs when individuals make judgments influenced by gender, race, age, or other factors without realizing they have done so. Dozens of bias types have been identified that impact hiring and promotion: For example, identical resumes with white-sounding names receive 50% more callbacks than resumes with Black-sounding names.  

READ: It’s Time to Bridge the ‘Say/Do’ Gap in Diversity and Inclusion

DEI through skills-based hiring 

Businesses can grow their pool of diverse talent through expansive practices in both recruiting and hiring. The first step? Eliminate college-degree requirements and hire for skills. Currently, 86% of Colorado employers say the skilled talent gap threatens their business, but some of this pain is self-inflicted. Recruiters typically use degrees as a quick screening mechanism, disqualifying thousands of capable Coloradans in the process. Consider this: 77% of Colorado’s top jobs post a degree requirement, yet only 30% of Coloradans earn one.  

Instead of relying on college degrees, forward-thinking employers have embraced skills-based hiring, dramatically growing their talent pool and creating a more equitable, inclusive hiring process. According to research from McKinsey & Co., hiring for skills shortens the time to hire, reduces hiring costs, and is five times more predictive of job performance than hiring for education. And it aids retention: Employees without college degrees stay in their roles 34% longer than those with degrees.  

READ: Embracing Neurodiversity in the Workplace — 5 Benefits of Hiring Neurodiverse Talent

DEI-focused promotion and retention 

Most companies overlook their greatest potential asset in creating a more diverse workplace: their own employees. Other inclusive practices, like career-pathing, upskilling, tracking mobility and skill-based promotion practices help drive retention and ultimately build a valuable future talent pipeline of managers and leaders.  

Two critical underutilized DEI tools that boost retention and drive equity through all levels of an organization are mentorship and sponsorship programs. Having mentors and sponsors who advocated for them is the single attribute shared by people of color who have progressed furthest in the leadership ranks. Mentoring programs boost the representation of Black, Hispanic and Asian-American managers by 9-24 percentage points. 

DEI at work 

ActivateWork is a Colorado-based nonprofit recruiting, training, placement and coaching firm that I’m proud to have founded. Closing the IT talent gap, we provide rigorous, tuition-free IT training for individuals historically underrepresented in the tech industry. We expand the skilled workforce by providing industry-demanded tech training and credentials, like COMPTIA A+ and Network+, and then connect our graduates, who are 70% BIPOC,  to employers who need and want skilled, diverse technologists that their normal HR practices would overlook. For our 40+ employer partners, such as Trimble, Bank of America and Ping Identity, we are both a skilled talent solution and a DEI partner.  

Through our registered apprenticeships in cybersecurity, software development and DevOps, ActivateWork helps IT employers bridge critical mid-skill shortages while enhancing diversity and generating an ROI. Apprentices learn customized skills and competencies specific to their employer on the job, and experience rapid economic mobility. Through apprenticeship, employers that build versus buy talent earn an average $1.47 return for every $1 invested. 

READ: Want to Set your Business Apart From the Rest? Consider Apprenticeship

The Colorado Inclusive Economy Movement 

The profound benefits of DEI to our BIPOC communities and the businesses that hire them are why I founded Colorado Inclusive Economy (CIE), a CEO-led movement of racial equity, diversity and inclusion. CIE is composed of leaders of business, government, education and nonprofits who want to co-create a Colorado that works for all. Founding members include Jandel Allen-Davis of Craig Hospital, Rob Cohen of IMA Financial, Janice Sinden of the Denver Center for the Performing Arts, and many other community leaders. Altogether, 140 leaders have engaged on a journey to build multicultural, inclusive workforces through authentic DEI programs and practices. By transforming hiring, recruiting, retention, promotion and pay practices, CIE intends to build the employment, income and wealth of BIPOC individuals across the state. 

When it’s done right — through expansive, inclusive, and additive DEI workforce practices — employers can build diverse workforces that solve talent gaps expand the candidate pool and retain and develop diverse talent — improving individuals, communities and Colorado’s economy. It requires dedicated, measurable commitments to common-sense, skills-based hiring practices, building an inclusive community based on communication and understanding, and a shift to apprenticeships, upskilling and mentorship. ActivateWork and Colorado Inclusive Economy are leading the charge toward a diverse economy that works for all Coloradans. 

 

Helen Young HayesHelen Young Hayes is the CEO & founder of Denver-based ActivateWork, a nonprofit recruiting, training and coaching firm that connects employers to a diverse pool of exceptional talent . 

Business leaders form group to address inequities

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Dax Craig had heard the stats before—the “business case for diversity, equity and inclusion” that shows companies that are racially and ethnically diverse are more likely to outperform their competitors, make decisions faster, collaborate better and be more innovative.

Then came 2020, and the deaths of George Floyd, Ahmaud Arbery and Breonna Taylor and others—and the nationwide protests that followed. Suddenly everything Craig—president and co-founder of Denver-based Pie Insurance—had learned about racial inequities came into sharp focus.

“All the events of the past year—the George Floyd murder, the Black Lives Matter protests—made me realize, ‘Oh my god, this is real. I need to pay attention to this.’” Craig says. “In the past, it didn’t affect me. It wasn’t part of my worldview. Sadly, those events really opened my eyes to the issue and I started looking into it, diving into, ‘What’s going on here? Why is this happening? ’I realized it’s actually a real problem, but it is solvable.”

Craig started talking to other business leaders in Denver and beyond and found they were equally troubled by the headlines around racial injustice and inequities. Together, they formed Colorado Inclusive Economy (CIE), a new organization aimed at increasing the participation of underrepresented and marginalized groups in the state’s business ecosystem.

“When everybody enjoys the fruits of the economy, it’s the right thing to do,” Craig says. “We need to build a fair system. What we’ve all learned—what we should have known but didn’t know—is that the system isn’t fair. So how do we make the system fair? When the system—the business system, the political system, the justice system—is fair, everybody has a chance to be part of it. It’s such an amazing life we live here in Colorado, and we want everybody to share in it. Not just the outdoors, because that’s free, but the business side of it and the economic side of it, too.”

With leaders on board from JPMorgan Chase, Janus Henderson, Four Winds Interactive, Pinnacol Assurance and more, CIE is committed to recruiting, hiring and promoting employees of color; transforming corporate cultures to embrace and support inclusivity; and investing in education and workforce development to create a more inclusive and skilled pipeline of talent.

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“There’s a role for human resources in this, but what’s been missing is real CEO-level, president-level commitment to this work.” — Dr. Jandel Allen-Davis, president and CEO of Craig Hospital

“The intent is really to get as many companies as we possibly can together to create 10,000 jobs in 10 years,” says Dr. Jandel Allen-Davis, president and CEO of Craig Hospital and a founding leader of CIE. “There’s a role for human resources in this, but what’s been missing is real CEO-level, president-level commitment to this work.”

In addition to working together and offering support and toolkits on their website, inclusiveeconomy.us, Colorado Inclusive Economy members are working on the issue in their respective workplaces as well. For Dax Craig, that means completely reworking the way job openings are written, posted and shared.

“We make it a point to have a diverse set of candidates for every job before it goes to the interview panel, then we also make sure the interview panel is representative of the people who are looking for interviews, so we have this ecosystem that’s diverse,” he says. “You’ve got to actively recruit people and actively look at your job descriptions and get outside of your comfort zone from an experience standpoint. You can’t put a narrow box experience, because if you do, only people from that very narrow box are going to apply. And often those are not underrepresented folks. You have to expand your thinking.”

The business case for that? It’s simple, Craig says—better relationships with customers and potential customers.

“Our customers are small business owners—the average one has eight employees. That is an incredibly diverse group of people,” he says. “White men aren’t the only ones that start businesses. Lots of businesses are started by immigrants and minorities. We want our people to actually look like and represent our customers.”

Diversity In Biz Lyndia Garcia
Lydia Garcia, who has worked with some of the most prestigious theatres in the country, was hired in 2019 as the Denver Center for the Performing Arts’ first-ever director of equity and organization culture.

At the Denver Center for the Performing Arts, meanwhile, president and CEO Janice Sinden—another CIE founding leader—is taking dramatic steps to address the issue, hiring Lydia Garcia as the organization’s first ever director of equity and organization culture and looking at everything from show selection to the usher experience to make the center more welcoming to patrons from underrepresented backgrounds.

“We’re leaning in hard and looking at all of our systems and figuring out where we were already doing things, where we had to stop doing things, and what were the things we needed to work toward,” she says. “What is that usher experience when you’re a Black family that walks into a predominately white audience? How are you treated? How do you feel in that space? When you get into artistic decision-making and what you put on a stage and the stories you’re telling—does that reflect community? Does it marginalize a community, or does it lift a community up?”

It’s a conversation the Denver Center has been having for a while now, Sinden says, especially as the Denver metro area moves closer and closer to becoming a minority-majority community.

“By 2030, we will have a less-than 50% white population,” she says. “It should be an expectation that our business and our audiences look like our community. It feels like a moral obligation that those who have had privilege and continue to have privilege need to make space for everyone.

“We have been really excited about this work for a number of years, so to be able to join with other organizations—for-profit, nonprofit—and share best practices and build an inclusive economy is an honor,” Sinden continues. “We get so far in these boxes of what we think we need—we have no idea how big and bright the world is if we just think a little bit differently.”

Business leaders launch movement to build more diverse Colorado economy

Denver-area business leaders recently launched the Colorado Inclusive Economy, a new movement aimed at rebuilding the state’s economy to work more effectively for all Coloradans. Employers who join the movement commit to hiring and advancing employees of color, developing more supportive workplace cultures and investing in workforce development to create a more diverse and skilled pipeline of talent.

“This is a real moment of awakening for the business community. The pandemic and Black Lives Matter protests have revealed economic disparities and institutional racism that we can no longer ignore. Working collectively and diligently, we can make Colorado a state where every resident has access to the same opportunities and the ability to reap equal rewards,” says Jandel Allen-Davis, M.D., CEO of Craig Hospital and a founding leader of Colorado Inclusive Economy.

Colorado’s economy has been among the strongest in the nation in recent years, but not everyone has participated in that prosperity, with communities of color continuing to lag behind economically. The COVID-19 crisis disproportionately impacted both the health and finances of Black and Hispanic Americans, who tend to work in service industries and in low-wage jobs most affected by coronavirus-related shutdowns. While the unemployment rate for white workers rose to 14.2% in March, the African-American rate jumped to 16.7%, and unemployment among Latinos was 18.9%

The Inclusive Economy movement is not only focused on getting individuals from marginalized populations back to work, but into higher-paying positions that offer long- term career growth. The group’s plan is to collectively hire and develop workers from underserved communities into career-path jobs offering salaries of $40,000 and above and to foster their professional development and advancement.

The group’s founding members represent both public and private sector employers, including Denver Health, IMA Financial Group, Denver Museum of Nature and Science, Craig Hospital, Pinnacol Assurance, Bow River Capital, the Blackstone Entrepreneurs Network and Janus Henderson.

“We invite and challenge our fellow business leaders to join us to build an economy that reflects both the diversity of our state and our common values of shared prosperity. History is calling us to co-create a society where all can flourish,” says Helen Young Hayes, founder of Activate Workforce Solutions and executive sponsor of Colorado Inclusive Economy.

Building a more inclusive culture not only increases economic opportunities but also provides a number of benefits for employers. Diversity can help with overall recruiting, reports Glassdoor, with 67% of job seekers considering a diverse workforce an important factor when evaluating companies and job offers. Racially and ethnically diverse companies are 35% more likely to outperform their competitors, according to McKinsey & Company.

The steering committee guiding Inclusive Economy’s work is developing a list of best practices, a toolkit and other resources to help employers transform their recruiting, hiring, on-boarding, and advancement processes to support a diverse workforce. The committee is also building a database of subject matter experts to help employers implement and optimize workforce diversity programs.

“We’re pleased to be a founding member of Colorado Inclusive Economy and look forward to collaborating with business leaders across the state on this important initiative,” says Blair E. Richardson, CEO of Bow River Capital. “Recent events have revealed the social and economic disparities that exist for women and people of color in Colorado and nationwide. It’s imperative that business leaders join forces to address this issue in a meaningful way.”

Inclusive Economy’s 10-year goal is to demonstrate a collective improvement in the diversity of all levels of staff, from entry-level to managers to executives and board members, along with equitable compensation practices among all groups. The group plans to report its progress by sharing collective data on gains made in workforce diversity, employment and wealth creation.