By Andrea Ferstan, Vice President of Innovation, Policy, and Research
(This article first appeared on the Ramsey County website.)
Across the nation, companies are struggling to find and retain the diverse talent, resulting in high turnover costs, lower productivity, and down revenues. Many of those same companies are realizing that the key to unlock and achieve year-over-year growth and a competitive edge is to ensure their workplace is racially equitable and inclusive.
Research has long pointed to the economic benefits of racially inclusive workplaces. In Minnesota, research by Fed Communities found that by closing the state’s racial gaps in employment, our GDP would have increased by $2.3 billion each year (2005 to 2019).
Over the next 20 years, the pipeline of talent will increasingly be Black and Brown. By 2044, Black, Indigenous, Latinx, and Asian people will represent the majority of the nation’s population, workforce, and consumers.
In Ramsey County, the workforce is comprised of 36% racially and ethnically diverse employees. Starting now, employers have a window of opportunity to examine and make the necessary improvements to their workplace cultures and recruitment, hiring, and retention practices and policies.
The most successful companies will be those who commit to identifying barriers, crafting data-informed solutions, and taking meaningful action to close racial employment gaps and build a workplace of equity, inclusion, and belonging.
The time to build that racially diverse and inclusive workplace of the future is now.
The Competitive Edge
Data show the competitive edge of racially equitable and inclusive workplaces:
· Businesses with a more diverse workforce have been shown to have more customers, higher revenues and profits, greater market share, less absenteeism and turnover, and a higher level of employee and customer commitment to their organizations.[1]
· Studies have shown that feeling more included boosts productivity.[2]
· Employers who intentionally find ways to advance the careers and enhance the experiences of their frontline employees of color—entry-level employees who engage closely with customers—can gain competitive advantage.[3]
There are multiple evidence-based practices employers can adopt to advance racial equity[4] for recruiting, attracting, hiring, and retaining diverse talent to create a workplace of racial equity, inclusion, and belonging. Closing racial employment gaps is how companies will achieve and maintain a competitive edge in the market.
1.Build the internal capacity for an inclusive, understanding, and adaptive culture that values the contributions of employees of color.
Accountability
CEO commitment to racial equity
Chief DEI leader
Company-wide evaluation of managers at all levels of the organization
Commitment to anti-racism is demonstrated in the organizational values, strategy, goals, vision, performance reviews, and partnerships
Learning
Employee resource groups
Ongoing REI trainings
Address bias, micro-aggressions, and build a culture of anti-racism
2. Strengthen management and HR systems, policies, and practices to enable equitable outcomes for employees of color:
Stability Support
Childcare subsidies or vouchers
Competitive and equitable pay
Employee Assistance Programs
Employee hardship funds
Health insurance for all part-time employees
Transportation assistance
Scheduling
Minimum hour guarantees
Predictable and flexible scheduling
Shift swapping
Leave
Paid sick leave
Paid parental leave
3. Intentionally invest in the development, recognition, and promotion of more employees of color:
Hiring, Training and Retention
Cross-training
Recruiting people of color to management trainings
Investments in talent pipeline development; diverse referral programs
Peer mentoring and coaching to develop racially responsive leaders and executives
Other Supports and Partnerships
Clear career pathways and eliminate artificial barriers to advancement
Education/tuition assistance programs
Formal mentorship and sponsorship
Strategic partnerships with local and national organizations to build Grow Your Own programs
Building a racially equitable and inclusive economy that works for everyone requires long-term commitment, action, and accountability. The road map to closing racial gaps is available and achievable. Now, we need leaders across sectors to take those smart, bold first steps within their companies, catalyzing a ripple effect of inclusive growth in the region.
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[1] Vivian Hunt, Dennis Layton, and Sara Prince, “Diversity Matters,” McKinsey & Company, February 2, 2015, https://www.mckinsey.com/businessfunctions/organization/our-insights/whydiversity-matters
[2] Accenture-Getting-To-Equal-2020 Research Report
[3] Advancing Frontline Employees of Color, Innovating for Competitive Advantage in America’s Frontline Workforce by Fay HanleyBrown, Lakshmi Iyer, Josh Kirschenbaum, Sandra Medrano, Aaron Mihal; FSG and PolicyLink
[4] Ibid and Center For Economic Inclusion