When organizations are challenged by working on becoming a more diverse workplace, I hear a variety of things out there:
- “Diverse talent costs more.”
- “Diverse talent doesn’t meet the bar.”
- etc etc etc
Hack 1 / HIRING: Pay more for what you need to accelerate your diversity goals
So I’m thinking of a more precise algorithm for addressing diverse talent imbalances:
- There’s a bar set for a hire. Set that bar clearly.
- Let’s assume that two different candidates meet that bar. And let’s use gender difference in this example, but you can swap the majority with the minority however you like.
- The man has experience that is slightly higher based upon experience
- The woman costs more than the man because they have are more scarce and valuable in workplaces that seek to be more diverse**.
**Caveat: The data says that they’re often paid and offered less. That doesn’t make much sense given supply and demand. This should start to change over time.
- When the diversity goals of the organization are not met, they should pay more for the woman (because that’s the market talking) AND fully accept that she has met the quality bar.
Hack 2 / RETENTION: Minimize needed spend to retain your current diversity levels
Let’s next talk about the pay gap that might exist with a minority compared with a majority. If it were to exist in an organization, then it’s much more inexpensive to address it head on. Why? Because:
- The minority is not numerous, and therefore it’s not expensive to remove the pay gap as compared with the majority, if it exists
- That amount is going to be much less than if the organization wanted to hire talent that would cost much more if brought in as a new employee.
Hack 3 / SUCCESSION: Line up the next generation of leaders to shift towards a better balance in diversity
Another long-term hack that I like is the Rooney rule — which sets things up so that overtime you will have greater turnover in an organization towards a more diverse population. Every job I’ve moved on from has been filled by a woman leader because I specifically engineered the situation so that my succession plan had more women than men in the mix. It’s easy:
- Require all leaders to have a succession plan that consists of three people where one should be diverse. They get extra bonus pay or promotion considerations if there are two out of three that are diverse.
- Wait for your organization to succeed over time such that turnover favors probability to address the systemic imbalance by shifting who is a leader versus who isn’t.
If we think of this mathematically, if an organization seeks to increase its diversity from 20% to 50%:
- Use Hack 1 to determine the cost of hiring more diverse talent to address your imbalance. If there are ten slots, and ideally seven of them are diverse hires, then assume that the seven might costs 10 to 30% more than the rest. Do the maths!
- Use Hack 2 to minimize the losses that you’ve already gained by having existing diverse talent. Calculate the amount of pay gap that exists, and then set a goal of N months by which you can fully announce that you did it! Do the maths!
- Use Hack 3 to affect long term change on the span of decades versus years. Assume that the average leader is in place from 3 to 5 years, and then calculate how long it will take for at least a third of those leaders bringing in corrections to imbalance. Do the maths!
There’s the fanout effect of losing a diverse leader to consider (i.e. its impact to the rest of the organization). And that all-important ROI question that will need to get addressed.
A starter spreadsheet exists here — the numbers in it are meaningless, but some of the logic from above is gently encoded, to start.