W2 Issues/Concerns


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How to Renew Focus on Diversity, Inclusion and Gender Equity

Business owners can help their companies grow and thrive with a renewed focus on diversifying the staff and creating a corporate culture that promotes equity and inclusion. This attention should be focused on creating a diverse, inclusive culture for all the benefits and perspective that employees of different backgrounds bring to the table, not because it is required by law to not discriminate on grounds of race, ethnicity, gender, age or other perceived differences.

Companies in the top 25th percentile in terms of gender diversity in management positions were 21 percent more likely to experience above-average profits, according to a 2018 study by McKinsey & Company. Further, companies in the top 25th percentile for ethnic diversity in management positions were 33 percent more likely to boast above-average profits; at the board of director’s level, more ethnically and culturally diverse companies were 43 percent more likely to see above-average profits.

Despite the correlation with profitability, the report showed that black Americans held only 4 percent of senior executive positions, despite representing 10 percent of all university graduates in the country. Rates among Hispanics and Latinos were also lacking, also holding just 4 percent of positions despite making up 8 percent of college graduates, while Asian Americans held 5 percent of these roles while representing 7 percent of college grads. Women were particularly underrepresented in executive roles in the United States, making up a combined 19 percent of all executive jobs. Women in Australia fare slightly better, at 21 percent.

The link between diversity and profitability is key to obtaining different perspectives, innovative ideas and creativity. To achieve this goal, some large corporations appoint a diversity officer, but having a person appointed solely towards promoting equity all day, every day, is out of reach for most small business owners. A Professional Employer Organization (PEO) can help you develop a strategic plan to be an inclusive employer.

There are a number of small, low-cost changes that you can boost diversity among your ranks and an outside view from the HR pros at a PEO can help you see things with fresh eyes.

Look Within

The first step is to make employees aware that you understand the importance of diversity in the workplace and would like to take steps to become more proactive in your approach to creating an equitable workforce. This could include gathering data on your company’s current demographics and seeking input from employees on their perception of diversity in the workplace. Next, this feedback should be benchmarked against your peers – both in your industry and your geographic location.

Should the feedback identify any barriers to equality in your office, you next need to review your company’s policies, processes, and values to identify and address the issue. Even if the outcomes are favorable, there’s still work to do; keeping diversity and inclusion front of mind requires frequent training and communications on the topic so that it becomes deeply embedded in your company’s culture and front of mind for all employees.

Share What You Know

Once you’ve spent time gathering all this information, the best thing to do is share it within your company. Yes, it might be embarrassing to admit that you have fallen woefully short in creating a diverse workforce, but chances are you aren’t telling your staff anything they aren’t likely aware of. And if you did determine that your staff is diverse, you should want to shout it from the rooftops anyway.

The other benefit of being transparent is that it is critical to catalyzing action – you can’t get people to rally around a plan if they aren’t aware that there is an issue to begin with. Further, in many states, you have to report this data anyway – thus putting it into the public forum – so there’s truly no benefit to keeping it secret.

Make Meaningful Change

Taking steps to better support diversity within your company doesn’t have to mean overhauling everything that your company stands for and does. Rather, it can be a series of small, incremental changes that pay off significantly for those that are all too often marginalized. Simply asking employees which holidays they celebrate and taking steps to try and accommodate these holidays – or even just not exclude them all together – can make a real and lasting difference for employees whose customs are so often ignored.

Other small, but influential, areas for change can also include making hiring managers aware of your goal to diversify your employee base so that they are aware of this commitment. Then they can alter their recruiting strategies accordingly to make sure that they are seeing a diverse set of candidates. This may include advertising jobs in communities with diverse populations and reaching out to local organizations or religious groups to identify new sources of candidates.

A PEO can help with all aspects of recruitment and hiring.

Keep it Going

If you’ve made an effort to make changes to diversify your company, it can’t be a one-time effort. Rather, you will need to re-survey your employees to see if they feel the company is more open to diversity. Then, reevaluate whether barriers still remain, start thinking about what you can do to break those down, and determine whether your strategies were or are helpful. Keep the future in mind, and plan to evolve these strategies over time.

Even if your strategies have paid off and everyone seems happy, you should always be considering what you can do next. As we noted above, getting a diverse group of employees in the door is one thing, but upskilling them and promotions to leadership positions are crucial to making a lasting change, not only in your company but in the broader corporate landscape of America.



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