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Diversity Hiring Shortcomings Revealed in New Research Report

Diversity Hiring Shortcomings Revealed in New Research Report

New research conducted by Josh Bersin analysts is raising serious doubts about traditional approaches to the business and social issue of diversity, equity and inclusion (DEI).

The research, based on more than 800 responses from HR professionals around the world, found that DEI training – a common corporate practice– is among the least impactful of practices when it comes to meaningful business and workforce outcomes. Top-level findings include:

  • 40% of companies regard diversity and inclusion as a risk mitigation and compliance issue and have no comprehensive DEI strategy.
  • Diversity and equity as business strategies, backed by senior leadership commitment, are far more effective in creating a diverse workforce than DEI training.
  • Actively listening to employees, followed by action, is the biggest driver of diversity, inclusion, and belonging in the workforce.

 Diversity Data Revealed

Analyzed in the 50-page report, Elevating Equity: The Real Story of Diversity and Inclusion, data shows that fewer than 12% of companies compensate or track senior leaders for achievement of specific inclusion or diversity goals, while:

  • 76% of companies have no diversity or inclusion goals of any nature.
  • Only 11% of recruiters get evaluated sourcing from underrepresented groups.
  • 75% of companies do not include diversity and inclusion in their leadership development.
  • Only 32% of companies mandate DEI training for employees and only a third offer such training to managers.
  • Only 22% of respondents believe their organizations’ DEI efforts have raised awareness among employees, customers, or suppliers.

Additional Findings 

The study also found that, overall, HR professionals are not well trained to support DEI initiatives and managerial issues. In a separate Josh Bersin research initiative assessing the capabilities of HR professionals, responses from more than 3,000 HR professionals show that out of 20 capability areas assessed, DEI scored the poorest. A mere 3% of respondents claim deep expertise in this area, while 80% of HR professionals assess themselves as “beginners.”

The study found that of the five essential strategies for achieving meaningful equity, listening to employees and taking action on input is the top driver of success. Organizations that have put into place such listening and action strategies are:

  • 3.6 times more likely to innovate effectively.
  • 6.6 times more likely to adapt to change.
  • 8.4 times more likely to inspire a sense of belonging.
  • 8.5 times more likely to satisfy and retain customers.
  • And 12 times more likely to engage and retain employees.

Diversity Hiring Starts at the Top

C-suite commitment to diversity, equity, and inclusion is essential. Those organizations that have achieved meaningful DEI outcomes are 4.3 times more likely to have a CEO who articulates the company’s DEI vision and transparently communicates progress, are 9.4 times more likely to have a CEO who holds senior leaders accountable for DEI results, and are 10 times more likely to have a DEI strategy that is an integral component of the company’s business strategy.

One of the most important takeaways from the research is the importance of focusing on inclusion and belonging, which in turn makes diversity sustainable. A company can force workforce diversity in terms of race, ethnicity, or gender, but still have a culture in which minority employees feel disenfranchised. Technology solutions can help companies monitor feelings of inclusion among employees in a variety of different ways – ranging from targeted pulse surveys to network analysis.

The research shows that a “hiring-only” approach to addressing DEI issues is not effective. Minority candidates tend to leave an organization if they feel excluded or see no diverse role models in leadership and management. Inclusive process design must be built into performance evaluations, rewards and pay, and development opportunities as well as all aspects of talent acquisition.

The study also emphasizes the importance of DEI-related metrics and goals. To drive DEI success, companies need to have teams skilled in people analytics, invest in analytic technologies and external benchmarking, and commit to transparency in reporting progress – or lack thereof.

Josh Bersin, global industry analyst, said: “Diversity, equity and inclusion is a hotly discussed topic and clearly essential to business success. However there are no clear guidelines on how to effect lasting, meaningful change. The entire domain is highly complex, and many companies turn to legacy tactics of unconscious bias training, diverse recruiting and other directives that can backfire and even contribute to more division than unity. It’s time for CEOs and CHROs to define their businesses in diverse, fair, and inclusive ways.”

Kathi Enderes, Ph.D., vice president of research, said: “Across industries, geographies and organizational sizes, the most successful organizations are listening to their employees, and hear and act accordingly. They also have strong, highly capable HR people to consult on DEI with leaders at all levels.These companies also have set clear, measurable goals that go beyond diversity representation and instill accountability across all levels.”