Diversity has become increasingly important in this era of technology and globalization. As a result, many companies are making an effort to achieve cultural diversity in the workplace. It’s not just to reflect the society in which we live, but to enjoy the improved outcomes, thought processes and the potential financial rewards it brings.
The staffing industry is no exception. And when you add that a diverse workforce helps fulfill the “diversity quota” of many enterprise organizations using contingent labor, it’s no surprise that many staffing firms are ramping up their diversity hiring efforts hoping to appeal to both MSPs and these customers.
“Diversity significantly improves financial performance on measures such as profitable investments at the individual portfolio-company level and overall fund returns,” according to an article last year in the Harvard Business Review titled “The Other Diversity Dividend.” Focused on venture capital firms, the article was written by Paul Gompers, the Eugene Holman Professor of Business Administration at Harvard Business School, and Silpa Kovvali, a research associate at Harvard Business School.
Diversity-owned staffing suppliers also say they are seeing client interest in not just using their services but hiring diverse candidates as well.
SIA Diversity List
To help the workforce solutions ecosystem understand the importance and value of diversity, we highlight the topic in this feature. In addition, SIA has compiled a list of staffing firms in the US and Canada that are diversity-owned. This year, the list comprises 157 staffing firms.
However, this list is not a comprehensive list of diversity-owned staffing firms. It reflects firms that responded to SIA surveys in 2018 and this year. Firms on the list self-indicated their diversity-ownership status, and while certifications are noted on the list, they were not required or vetted for the firms to be included.
In order to understand this growing trend and how being a diversity owned firm helps business, Staffing Industry Review interviewed executives at several of the firms on the list. Here is what we found.
The Best Results
Diverse employees bring different viewpoints to the conversation and approach problems in a different way, which can bring out the best results, says Ranjini Poddar, co-founder and CEO of Artech, an IT and engineering staffing provider based in Morristown, New Jersey.
“If they come from different backgrounds, they bring different viewpoints to the conversation,” Poddar says. “That brings out the best viewpoints and the best thought process.”
Being a diversity firm also gives a company another way to approach clients.
It’s “an opportunity for us to get our foot in the door through a different marketing channel than the traditional marketing channel,” Poddar says. However, it doesn’t replace the requirement for delivering excellent service. “Once we are able to get our foot in the door, then, of course, we have to prove our ability through our capabilities and performance.”
“Relying on a diversity status to gain or retain business is a losing strategy,” ActOne Group Founder and CEO Janice Bryant Howroyd says. “We have never been awarded a piece of business based on our classification and by the time we have reached that stage in our pursuit, we have invested enough time with an organization to ensure that we are a right match for one another.” Torrance, California-based ActOne ranks among the 20 largest staffing firms in the US.
And being a diversity-owned firm can also attract more diverse candidates who are comfortable in such an environment, Artech’s Poddar says.
Candidates may view a diversity-owned company as being more sensitive to issues surrounding women and minorities, which may in turn make it more attractive as an employer, ActOne Group’s Howroyd adds. Team members “have been clear that the diversity of our teams and of our thought processes were enough to support them coming onboard, even when the salaries may have been slightly less,” Howroyd says. “They ‘wanted in’ to the communities we have built that evidence evolving cultures of inclusion.”
Widest Possible Demographic
Diversity is still important, says Gene Waddy, CEO of Diversant, a Red Bank, New Jersey-headquartered firm that specializes in IT staffing and recently opened Alpha Business Solutions, a payrolling business.
Diversant’s Fortune 500 clients continue to invest heavily in programs that promote diversity spend. To sell their products, they want to appeal to the widest demographic possible, so diversity is very important to them from a marketing perspective, Waddy says. “Diversity and inclusion are very top of mind, and they also want a supply chain that reflects that value system as well.”
Large companies are responding to cultural and societal changes, and they want to be seen as good corporate citizens — as a source for good in addition to making a profit. Having a diversity and inclusion initiative is one of the ways they accomplish that.
Smaller and midsize firms are emulating the larger ones in the push for diversity. “That is allowing Diversant to become a trusted advisor for these emerging companies,” Waddy says. “They are in a war for talent just like the big companies, so they have to appear inclusive and have a diverse workforce.”
There’s more and more research pointing to diverse teams delivering solutions that are both more creative and better, says Molly Brennan, founding partner at Koya Leadership Partners, a Newburyport, Massachusetts-based retained search firm that serves the education and nonprofit sectors.
Koya is WBE-certified, and its staff is almost 40% people of color.
Brennan says being a diverse firm helps it serve clients better.
“I think it’s about different viewpoints, different backgrounds and different ways of thinking that help us reach a better outcome with our clients,” she says. Having a diverse staff has also helped build a network of more diverse candidates.
In addition, being diverse appeals to millennial workers, who especially seek out diversity in a company, she says. However, creating a diverse team is more than just hiring the right people.
It’s one thing to recruit diverse people, Brennan says, but it has to be accompanied by becoming a truly inclusive culture — where that diversity of background, experience perspective, life experience, professional experience is not just welcome but is truly valued. “Diversity without inclusion is actually not going to push the needle; I think you need both in terms of being a successful organization.”
Koya aims for that truly diverse culture, she says. Its tactics involve staff training, including on unconscious bias; fostering a transparent culture; and creating an atmosphere where internal workers are able to offer ideas. In addition, the company strives to be transparent about promotions and career growth.
The Leadership Equation
Diversity is a hot topic for companies today, agrees Manoj Agarwal, CEO of US Tech Solutions, an IT and life sciences staffing provider based in Jersey City, New Jersey. Companies are recognizing the under representation of diverse workers as well as the need to make them part of a firm’s leadership.
“The goal is not just to attract diverse talent but also to make sure they are part of the leadership,” Agarwal says. “And at the end of the day, a big company wants to be a reflection of the society they live in.”
Howroyd agrees. “There is a large demand for diversity talent … for key leadership roles and for STEM positions in particular,” she says. “Recruiting for these roles is only the first step to ensuring that top companies have healthy workforces that represent the diversity of their clients and consumers, and that creates a balanced employee population.”
And having a diversity status can help a staffing firm grow as more client firms work to engage diverse suppliers and workers.
“Almost every large organization has a chief diversity officer or diversity supplier manager so it’s becoming fairly standard,” he says. “And these resources are the champions for diverse firms.”
They give diversity staffing firms the chance to approach a client company and communicate their capabilities. “Now, can you get the business just because you’re a diverse firm? I can’t say that,” Agarwal says. “It will definitely boil down to your capabilities and how well you can compete with the overall market.” But being a diverse firm definitely gives you more opportunity to get in front of the customer.
ActOne Group’s Howroyd cautions, however, of the need to ensure the leadership understands the company’s true reason for pursing diversity. Some people in positions of leadership may have come of age at a time when diversity was considered the charitable thing to do, and don’t recognize its value to the organization. “This can be crippling for diverse firms that are prepared for opportunities to perform within their competencies, but do not understand how to navigate legacy prejudices of perceptions,” she says.
An MSP’s Perspective
“Organizations are looking to create an inclusive workplace comprised of a diverse workforce; that really cuts across both your employee and nonemployee channels,” says Tom Kaminsky, VP of talent advisory services at KellyOCG, a managed service provider and part of Kelly Services Inc.
For the contingent, or nonemployee, workforce, it’s more important than ever for client companies. Kaminsky says they are trying to move as much spend as possible through diversity-owned suppliers.
But that’s one part of the equation, he says. More sophisticated clients aim to use diversity suppliers and build diverse workforces, and that can raise other challenges and questions. For example, a staffing supplier may be diversity-owned, but are the workers it supplies diverse?
Being able to capture data on workforce diversity can be another challenge for client companies. It’s complex because workers must self-report their diversity status; in addition, tracking diversity status of workers gets more complex the further East you go. For example, Europe’s General Data Protection Regulation may hamper tracking of workers’ diversity status.
There’s also the question of which comes first, Kaminsky says. Should client companies focus first on hiring diverse workers? Or should they lead by building an inclusive environment with initiatives to foster that environment?
“If you lead with an inclusive workplace,” Kaminsky says, “you can start from the core and build from that core and start to attract the right workforce.” In that case, the diverse workforce will begin to build itself, whether it’s permanent or contingent.
Diversity remains important, and the trend appears to be growing. Workers today value different experiences than even 10 years ago, ActOne Group’s Howroyd notes. Now, they value things like “encouragement to contribute thought and the ability to take pride in building work outcomes and communities that reflect their personal values and goals.”
As society becomes more diverse, the need for companies to be inclusive is increasing. It’s what workers are increasingly demanding — and basing their employment decisions on.