What to do? What to do? Companies everywhere are under attack for their DEI efforts following the Supreme Court’s decision ending affirmative action in university admissions. In response, many companies are ending their DEI programs, and some have even stopped collecting DEI data. There is no need for this retreat. DEI programs done right are both legal and essential to building a high-performing workforce. While developing followship for DEI programs from straight White Christian men has always been important, companies usually treated developing this followship as an after thought, if it was considered at all. Following the Supreme Court’s decision, developing that followship is mission critical. This article gives you a roadmap for designing compliant DEI programs and creating followship for these programs across a company’s entire population.
Let’s start with what the law is and has been for decades when it comes to private employers. It has been illegal for private employers to engage in affirmative action absent circumstances that are unlikely to exist for most private employers in the Twenty-First Century. This means that private employers are required — and have always been required — to hire and promote the best candidate. The diversity of the candidate cannot be a “plus factor” in the hiring or promotion decision, and the “tie” cannot go to the diverse applicant or staff member.
Prior to the Supreme Court’s recent decision, the Court had endorsed the use of diversity by educational institutions as a plus factor in a holistic evaluation of applicants for admission to the institution. This plus factor was available only to educational institutions when considering applicants for admission; employers have not been allowed to use diversity as a plus factor when making employment decisions. So, as a legal matter, the Supreme Court’s decision has absolutely no impact on what private employers can and cannot do when it comes to promoting diversity, equity, and inclusion. But the decision has had an enormous impact on the zeitgeist, giving fuel to the backlash that has long existed against DEI efforts. The antidote is to emphasize why DEI is a critical business initiative that directly impacts the bottom line and to make it crystal clear that the company is and has been complying with the law — it always hires and promotes the best candidate for the job without regard to the candidate’s demographics.
Let’s unpack this a bit. First, what is the business case for DEI? It is simple and irrefutable — talent does not reside exclusively in straight White Christian men who are not disabled. In today’s world, virtually every company depends on talent as a competitive differentiator. If the company’s workforce is not diverse, the company is not getting the best talent. Without the best talent, the company is at a competitive disadvantage. And if those diverse employees do not feel valued, they are not performing to their maximum potential, which also puts the company at a competitive disadvantage. Nor can anyone really quarrel with the notion that opportunities at the company should be available to all without regard to their gender, race, religion, age, or other protected characteristic.
There are other justifications for DEI as well, but keep the messaging simple. Focusing on the need for diversity of viewpoints that may come from demographic diversity will not resonate when you are talking about the accounting function or the quality analytics group, for example. So stick with the simple bumper sticker explanation — the company needs the best talent, and that talent is evenly distributed among people of different genders, races, religions, ages, sexual orientations, etc.
Viewed through this lens, DEI is not a nice to have; it is not a “woke” sop to the liberal elites — DEI is a critical business imperative. And employers need to couple that message with a second simple message — we always hire and promote the best candidate without regard to whether the candidate is male or female, White or Black, straight or gay, binary or non-binary, disabled or not. We need the best person in every role — that is what we do and that is why we have DEI efforts.
If companies cannot engage in affirmative action, what can they do? At a high level (and there are many nuances), here are some of the tools companies can utilize to increase their hiring numbers:
- Change the focus from degrees to skills. While some jobs require specific degrees, such as lawyers and engineers, most jobs do not. Only forty percent of the US workforce has a four-year college degree, but many more people have the skills to perform jobs that usually require one. Increasingly, critical skills are being achieved through on-the-job training, on-line courses, or focused certification programs. Requiring a degree has a disparate impact on people of color. Forty percent of Whites have at least a four-year college degree, whereas only twenty-eight percent of Blacks and twenty percent of Hispanics have a bachelor’s degree. [https://www.bls.gov/spotlight/2017/educational-attainment-of-the-labor-force/home.htm#:~:text=About one-fourth of the labor force had a bachelor’s degree, etc.).]
- Expand the pool of candidates. Recruiting only from elite schools both decreases the pool of diverse candidates and ignores great talent that for a variety of reasons did not attend elite institutions. Remember, diversity is about getting the best talent into your company, which means casting a wide net.
- Require every interviewer to undergo implicit bias training.
- Require structured interviews with some variation on the STAR technique (Ask the candidate to describe a situation where they used a key behavior or competency required for the job they are applying for; then have the candidate articulate the specific tasks that they employed and what actions they took; and finally what results or outcomes they achieved). All candidates should be asked the same questions. Some questions should be asked by all interviewers and others parceled out among the people conducting the interviews for a more in-depth discussion.
- To the extent possible, have a diverse group of interviewers. This is important both to attract diverse candidates to your company and to ensure you obtain different perspectives about the candidate.
What about promotions? Many (almost all?) companies have a reverse funnel — diversity decreases the higher up the corporate ladder you look. Here the solutions are even more nuanced, but at a high level, some of the least controversial steps a company can take are:
- Identify where there is a “broken rung” in the corporate ladder—where is there a drop off in representation from positions at the bottom of the feeder pool to higher-level jobs and representation at the more senior positions? Analyze why the drop off is occurring and take steps to ameliorate the barriers.
- Be sensitive in performance calibrations and talent reviews to whether diverse employees are receiving top evaluations or talent placement. If they are not, why not. Maybe the diverse employees are being overlooked, in which case, there needs to be a new discussion because everyone needs to receive fair consideration. Maybe the calibration and talent replacement represent the true and fair assessment of the employees being evaluated. In which case, the next question is why — why is diverse talent not doing as well. Is it because the company has failed to attract the best diverse talent, or is it because the diverse talent is not getting the right assignments, mentoring, and sponsorships on par with non-diverse employees? Or, even more pernicious, being held to a higher standard than non-diverse employees. And, of course, the converse questions need to be asked as well — are non-diverse employees being underrepresented? Once the cause of the problem is identified, take steps to address the problem.
One note about goals is an issue on everyone’s mind. A great many companies have publicly announced “hard target goals,” almost always tied to a timetable for achieving the goal and financial incentives for managers to do their part in achieving the goals. (x% of our workforce/VPs/etc. will be female/underrepresented minorities by y date.) There is nothing per se illegal about this approach. But hard target goals have always been problematic, particularly when coupled with a timetable and manager compensation. The two most significant problems with this approach are (1) it incentivizes managers to hire and promote diverse candidates even if they are not the most qualified, and (2) it alienates non-diverse candidates because they assume that managers will hire/promote the diverse candidate even if the non-diverse candidate is more qualified.
Not surprisingly, companies with hard diversity targets have been at the top of the target list for those opposed to DEI initiatives. A better approach is to commit to increasing representation without a hard goal or specific timetable. (Our goal is to increase the representation of women in senior roles/increase the number of Blacks in management roles/etc.) This “soft goal” approach reduces the risk that managers will hire or promote less qualified candidates. A soft-goal approach also lends credibility to the conclusion that the company truly is making employment decisions solely based on which candidate is the most qualified.
Many people dismiss soft goals as ineffective and argue that hard goals are the only way to make real progress. But that has not been my experience. Soft goals do move the needle when they are taken seriously. Hard goals are easier to execute, which may be why some view them as more effective. Unlike hard goals, which can become a check-the-box exercise, soft goals require a deeper commitment to diversity, a commitment that is more embedded in the business and in the regular conversations between managers and their direct reports.
This only scratches the surface of the steps companies can take to have a diverse workforce that operates in an inclusive environment, but at the bottom, creating a diverse, inclusive company requires putting diversity and inclusion on par with other business imperatives. This means that you establish KPIs for diversity and inclusion, measure the company’s performance against those KPIs, and hold managers accountable for their performance against those KPIs, just like you do for other KPIs that drive your business. Diversity and inclusion should be part of the normal discussions leaders have with their direct reports about matters critical to the business, like cost of goods sold, market share, quality. The difficult part is ensuring that managers are not incentivized to engage in illegal behavior, such as not hiring and promoting the best talent, regardless of gender, race, and other protected characteristics. But this is no different than driving down COGS without sacrificing quality. And getting the messaging right is just as critical as getting the programs right, especially in the choppy waters created by the Supreme Court’s affirmative action decision.
About the author:
Allan Dinkoff is an Adjunct Professor at the Maurice A. Dean School of Law. He previously served as Associate General Counsel and Head of the Employment Law Group at Amgen Inc. and Managing Director and Head of the Employment Law Group at Merrill Lynch & Co., Inc. In those roles, Allan was responsible for advancing the companies’ DEI efforts and ensuring that those efforts complied with the law.