The racially motivated murders of George Floyd and Ahmaud Arbery in 2020 and the subsequent Black Lives Matter movement prompted staffing firms to place a strong focus on DE&I. However, momentum appeared to slow as the pandemic continued and organizations turned their attention to remote work, financial concerns and the health and safety of their workers. Now, a slowing economy threatens to push diversity programs and goals to the back burner for many companies.
Chopping Block?
Professionals dedicated to the cause are key to pushing the DE&I needle forward. Requests for recruiters specializing in diversity hires increased 800% from 2017 to 2018, according to Gartner TalentNeuron data. And according to Glassdoor, DE&I job openings in 2021 exceeded pre-pandemic levels by 54%, while leadership roles were 2.6 times their June 2020 level.
But was that just a passing phase?
Workforce intelligence company Revelio Labs, in collaboration with The Washington Post and Reuters, in February released a study that found DE&I roles since 2021 are diminishing at a faster pace than non-DE&I roles, with the losses accelerating during layoffs in 2022. The research found more than 300 such professionals have departed companies that have experienced recent layoffs, sometimes amounting to the exodus of entire diversity teams. In fact, attrition rates have outpaced those of non-DE&I roles at more than 600 US companies that laid off workers since late 2020. In December 2022, the attrition rate for DE&I roles was 33% compared to 21% for non-DE&I roles; this compares to attrition rates in January 2020 of 19% for DE&I roles and 15% for non-DE&I roles.
“It seems like companies are just shedding these DE&I teams more and more,” says Ben Zweig, chief executive of Revelio.
The elimination of such leaders will definitely impact diversity programs, says Keilon Ratliff, chief diversity officer at staffing giant Kelly and a 2023 DE&I Influencer.
“A lot of it has to do with the fact that for many companies, their intention wasn’t real about it,” Ratliff says. “It was just to check a box. They didn’t really have a strategy when it was created. It was more, ‘OK, I see everybody else doing this, so we have to do this to some extent.’”
But such a move should not be taken lightly.
“DE&I is a priority to the next generation of employees,” DE&I strategist Tana Session is quoted as saying in LinkedIn’s Talent Solutions’ report “The Future of Recruiting 2023.” “Their expectation is to see leaders who look like them and to know organizations are committed to DE&I long term — not only during times of social crisis.”
Keeping the Pace
Despite the apparent decline in DE&I roles, 73% of recruitment professionals say that DE&I hiring is not being deprioritized, according to the report, for which LinkedIn Research surveyed 1,611 recruiting professionals in management seniority roles or higher and 403 hiring managers across 20 countries between October and November 2022. In fact, nearly 20% say DE&I is now a higher priority.
Staffing Industry Analysts’ own research also bears out the importance of DE&I to the ecosystem. SIA’s “2022 Workforce Solutions Buyer Survey” report reflects the responses of more than 100 companies with contingent workforce and RPO programs in the Americas and EMEA regions. When questioned about their current and future workforce strategies, creating a program for diverse suppliers is the most popular strategy concerning DE&I in both the Americas and EMEA regions at 69% and 59%, respectively.
The second-most popular strategy relating to diversity was implementing a program to encourage candidate diversity, with 59% of respondents in both regions reporting that such a program is already in place today. Although only about one-third of companies currently have a program that aligns contingent workers to diversity goals, the survey found most are likely to explore this strategy in the next few years, 56% in EMEA and 52% in the Americas region.
Beyond a Checkbox
Although momentum may have slowed, the need to have a diversity-owned, disability-owned and/or woman-owned designation has become almost boilerplate for staffing companies, with those lacking one often operating at a disadvantage. However, more recently, staffing suppliers are increasingly required to also provide diverse talent as clients seek to measure DE&I progress by the diversity of the actual talent procured and represent the communities they operate in and the people they market to.
Client organizations are looking for assistance in measuring their progress in diversifying their workforces. Staffing providers are now asked to provide information about DE&I as it relates to the dollars spent; as a derivative of that, some customers in the outsource space are inquiring about the diversity of their talent provider’s supply chain. They are also asked to engage in conversations around actual DE&I strategies and philosophies. “The beauty of it is … we are able to get into some really good conversations with our customers about their intention and what they’re looking for and how they categorize it, how they define it,” Ratliff says. “That’s really where I see it at now.”
Business Imperative
Organizations that take DE&I seriously are actively investing in their programs, creating not only targeted leadership roles but also the budgets to implement changes and deploy strategies. In exchange, they receive happier, more productive employees, diversity of thought, a strong employer brand and — importantly — better bottom lines.
“People may think that it’s a fad, or they may think it was a trend or whatever, but the smart companies are the ones that are going to embrace it,” says Ratliff. “The ones that are interweaving it into the fabric of their DNA, as they continue to move forward, they’ll see the results, and hopefully they’ll measure it so that they can create that tangible storyline.” Ratliff notes that 95% of the requests for proposal that come through Kelly inquire about diversity. “[Customers are] asking a question about it,” he says. “That means that they’re trying to talk about it, and we need to have a sustainable strategy around it.”
From the client’s perspective, contingent workforce managers want to know that their suppliers are intentionally invested in and committed to diversity and inclusion.
If a staffing provider is not doing something around DE&I, they’re “definitely not most companies’ first choice,” notes Keisha Stephens, director of talent acquisition operations at Splunk and a 2023 DE&I Influencer. “I think it has become more important, from a buyer perspective, that these companies are investing, and they do have some kind of roadmap or initiatives around their DE&I. Now, I’m not saying they have to be the most mature at it, but just showing that you have intent to do the right thing and you are trying to build this into your culture, into your company, I think is really important.”
Work in Progress
After several tumultuous years with almost continual media coverage of racial tensions, gender and sexual orientation discrimination, and economic inequalities, DE&I fatigue may be setting in. But now is not the time to take the foot off the gas pedal.
“We have to go into everything intentionally,” Stephens says. “DE&I just doesn’t happen overnight. Even with the best intentions, it’s hard to get everybody in the company on the same page and aligned that this is the right thing to do and this is the right timing to do it in. So, you do have to be persistent.”
Gender Equality in Staffing
Despite an increased focus on diversity, equality and inclusion, there is still plenty of room for improvement when it comes to women in the world of work — including those involved in the staffing industry.
Take compensation. Women had median weekly earnings of $996 in the first quarter of 2023, or 84.0% of the $1,186 median for men, according to the US Department of Labor. The women’s-to-men’s earnings ratio varied by race and ethnicity, with white women earning 82.4% as much as their male counterparts, Black women earning 94.8%, Asian women earning 83.5% and Hispanic women earning 85.0%.
Then there’s representation. Within the staffing industry, women comprise the majority of internal workers at staffing companies but remain underrepresented at the executive, CEO and board levels, according to the “Insights on Gender Parity in the US Staffing Industry” report. Its data comes from a study led by the Women Business Collaborative with support from the American Staffing Association, National Association of Personnel Services, Staffing Industry Analysts and the TechServe Alliance.
The report found that while women account for a substantial share of CEO/ownership at small staffing firms, representation lags at midsize and large staffing firms. For small firms — those with less than $25 million in revenue — 53% had female CEOs/owners. However, that number went down to 45% among midsize firms with revenue between $25 million and $100 million and down even further to 18% at large staffing firms with revenue of more than $100 million.
In terms of practical strategies that companies can use to advance women in leadership, the practice of salary review/equalization jumped from the fourth most common activity in 2020 to the No. 1 most used tactic in 2022, likely spurred by the advent of new pay transparency regulations in some states and metro areas.
Several recent trends are acting to boost the representation of women in leadership and on corporate boards, according to the report. These trends include state regulations, requirements by stock markets, and the growing focus on environment, social and governance metrics by investors.
