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HRO Today Research Flash Report: Gap Remains in Diversity & Inclusion Progress Among Contingent Workers

Thursday, July 1, 2021

Diversity and inclusion (D&I) has been a key factor among companies’ hiring and retention programs for some time, but the last year-plus of racial unrest has only accelerated those initiatives. Despite encouraging efforts and well-thought-out plans, tangible D&I results have been difficult to deliver. To understand where organizations might be lacking in their D&I programs, and where they can do better, we partnered with HRO Today to dig deep into how companies perceive D&I among their workforce. Together, we fielded a proprietary survey of senior human resources leaders on how workforce diversity is factored into decisions about human capital for hiring permanent employees and engaging contingent workers.

The results are clear: while D&I initiatives have risen to the top of the executive agenda, employee representation is still lacking across the contingent workforce. Our survey found that workforce diversity is rarely considered – only 27% of the time – in the selection of gig or freelance workers. Compare that to the selection of permanent employees where diversity is considered 64% of the time. The difference is staggering. The numbers improve slightly when it comes to independent contractors (32%), Statement of Work service providers (34%), and other staffing agency-provided contingent workers (44%). But there is more work to be done to improve D&I across the entire workforce. With permanent and contingent talent often working as part of the same team, diversity simply can’t be ignored for one talent pool. Organizations must walk the walk with all employee types – temporary, contingent, and full time – or they risk losing out on key talent that is driven by today’s tight labor market.

In the past, companies operated with the mindset that hiring temporary workers is a temporary solution. But that mindset no longer works for today’s competitive labor market. Contingent labor is increasingly a key feeder of permanent talent. According to the survey, nearly one-quarter of organizations transition between 25% and 49% of their contingent labor to full-time status and another 11% transition between 10% and 24%. Yet only 16% of study respondents have specific D&I goals in place for their contingent workforce. This is a major roadblock to real D&I progress that requires a shift in the mindset around the contingent workforce as a permanent worker strategy.

The Data: A Deeper Dive

As companies are faced with hiring more contingent workers given the current tight labor market, embedding D&I into the hiring process of all employees will become more crucial, especially with other key survey findings signaling the D&I journey is far from over:

  • 90% of organizations now consider D&I a priority within their workforce and nearly two-thirds of those organizations (65%) have begun or are in the advanced stages of implementing D&I plans. When asked specifically about the last 12 months, 84% of respondents agreed their organization’s commitment to diversity has improved during this time.
  • However, less than half (48%) agreed their organization has specific goals for measuring and improving diversity within their workforce, calling into question the commitment and ability to affect tangible workplace change.
  • That’s because most organizations still struggle to establish D&I benchmarks; only 38% of respondents feel they have insight into the state of their D&I progress compared to peers and competitors, and just 18% said they feel their organization is leading the industry in workforce diversity.

Taking D&I to the Next Level

Organizations need agreed upon diversity goals for both their permanent and contingent workforce, and relevant benchmarks with which to set those goals and gauge success. How can an organization possibly measure the success of its D&I progress – and accurately report this to the board, investors, and senior executives – without having a baseline? They can’t. In order for an organization to truly understand the state of their D&I progress, they also need to have a solid understanding of how they stack up to industry benchmarks, geographic equity, and the state of diversity in the communities in which they live, work, and play.

The good news is technology available today can provide organizations with real diversity data to drive progress and build bigger pipelines of diverse talent faster and more cost effectively. Our IQ Talent Diversity, an AI-powered solution, predicts which candidates are most likely to engage with recruiters and have diverse backgrounds – gender, national origin, ethnicity, veteran status, and more – based on schools attended, interests, languages spoken, and more – so organizations can attract and prioritize talent with high-demand skillsets that are in short supply from typically underrepresented communities. Employers can also use the intelligence to compare their company’s diversity hiring performance against industry, competitor, and national benchmarks.

Additionally, organizations can use our solution to target underrepresented employee groups most at risk of leaving the organization in the next 60-90 days and automatically gain insight into where talent goes when leaving the organization, and why. Employers can then use these insights to build custom retention communications and help hang on to at-risk employees.

D&I is a journey, not a destination. With contingent and permanent employees often working side by side, and with the contingent market acting as a funnel for high-quality permanent talent, organizations that neglect to include contingent workers in their D&I strategy are missing the mark. The best thing organizations can do to ensure they’re well on their way to success is to put diversity goals in place that can be measured over time and include all employees, not just permanent workers, in their D&I strategy.

For more information about the current state of D&I within organizations, download the full report.

William T. Rolack, Sr., Vice President of Diversity and Inclusion

William has extensive experience helping companies achieve their business goals by leveraging diversity and inclusion initiatives.  At Workforce Logiq he leads our diversity and inclusion strategy and advises our clients on how to improve diverse workforce and human capital management strategies.

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