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How U.S. Companies Are Managing Diversity in the Workplace

October 22, 2020

by Seamus Roddy

Content Writer and Marketer

More than half of employees do not think their company fostered diversity effectively in 2020. Companies are addressing those concerns by acknowledging the importance of diversity to employees, offering employees specific diversity initiatives, and increasing the number of underrepresented minorities in leadership positions. Overall, companies are using diversity to attract and retain the best employees.

In the recent past, many American workers had different opinions about diversity and discrimination.

Five years ago, 51% of Americans believed racial discrimination was a serious problem; 76% think that is the case today.

In 2015, Americans had not yet heard the name George Floyd; in 2020, protests about his death were supported by a majority of American workers.

As Americans develop new assumptions about diversity and discrimination, they have started to hold their companies to different expectations.

Clutch surveyed 400 full-time U.S. employees to learn whether they think their company is committed to diversity.

We found that most employees do not believe that their company fostered more diversity in 2020, but that workers are still largely optimistic about their company's commitment to a diverse workplace.

Clutch also found that businesses are listening and responding to employee concerns, and that companies use diversity to attract and nurture top employees.

Overall, American businesses are responding to their employees' expectations about diversity by treating it as a serious, lasting worker concern.

Our Findings

  • 54% of employees do not believe their company has successfully improved diversity in 2020, and businesses are listening to worker concerns about diversity, equity, and inclusion.
  • 53% of employees think their company is committed to creating a more diverse workplace. Workers care about diversity, and businesses are directly responding to their preferences by giving them the ability to make change at their organizations.
  • 25% of workers want to see racial and ethnic minorities in leadership. Companies are using diverse leadership to satisfy their current employees and be more competitive in their recruitment of new workers.
  • People of color (61%)  are twice as likely as white people (32%) to say their company’s diversity affects their ability to succeed. Diverse companies effectively mentor and nurture a range of employees.

1. Companies Acknowledge Employee Concerns About Diversity

If the first step to solving a problem is admitting you have one, companies are now on the path to managing diversity effectively.

Amid changing expectations about how businesses should address racism and inequality, companies are recognizing employee concerns about diversity at work.

More than half of employees (54%) said their company has not been successful at creating a diverse workplace during 2020.

54% of employees do not think their company diversified in 2020

Employees are more likely to speak out against racism, sexism, and general inequality, and companies are providing forums where employees can voice their concerns.

Thierry Tremblay, chief executive of Kohezion, which produces online database software, introduced diversity forums to encourage his employees to share their experiences, opinions, and ideas about diversity.

The discussion-based forums are sometimes led by Kohezion employees and sometimes by outside facilitators, which Tremblay believes helps spark more discussion.

Tremblay is a white man, and the diversity forums have been important to both understand his employees’ experiences and recognize the biases he and other people in leadership may hold.

Large companies have had to adjust to workers making pointed, public criticism about their diversity and inclusion efforts.

Facebook, the world’s largest social networking site, faced strong criticism from employees after the site did not remove or label a controversial post from President Trump after the killing of George Floyd in Minneapolis.

Employees publicly criticized Facebook’s decision as “unacceptable,” and one employee called out Chief Executive Mark Zuckerberg directly by tweeting, “Mark is wrong.”

Ryan Freitas Tweet

Soon after, Zuckerberg called a company-wide town hall where he answered questions and defended the company’s decision.

The next month, a Black manager at Facebook and two rejected applicants filed a civil rights suit against the company. Two weeks later, Facebook released its annual diversity report, which both touted the company’s progress and acknowledged lagging results in diversifying technical roles.

The average company’s struggles with diversity probably won’t draw heavy media attention, but Facebook employees' blunt criticism of their company reflects a broader business trend: Workers have strong opinions about diversity, and companies are likely to hear and acknowledge them.

2. Companies Try to Demonstrate to Employees That Diversity Is Important

Businesses have traditionally faced pressure to address employee concerns about job satisfaction, pay, work hours, and whether the temperature in the office is too hot or cold. Now, changes in public opinion regarding race and equal opportunity means that businesses also respond to their employees’ expectations regarding diversity.

Currently, more than half of employees (53%) believe their company is committed to creating a more diverse workplace in the next year.

companies are committed to creating a diverse workplace

Roughly one-third of employees (36%) aren’t sure if their company is committed to creating more diversity; only 11% of workers believe their company is uncommitted.

Experts say companies use simple, effective, and tangible initiatives to show their employees that diversity is a company value. Popular actions include:

Acknowledging Different Holiday Traditions

Tal Shalef, co-founder of Condo Wizard, a real estate company, says that diverse teams have different cultural traditions. He says that respecting and acknowledging different holidays helps prove to employees that he cares about their culture and happiness.

Displaying Workplace Policies About Diversity 

Sound Fro, which provides guidance about the music industry, educates all employees on its policies for workplace inclusion. These policies include guidance about religious holidays, hiring, discrimination, and flexible working hours.

Creating Senior-Level Diversity and Inclusion Positions

Summit CityMD, a healthcare management company, recently hired a senior vice president for diversity, equity, and inclusion. The senior vice president will be responsible for diversifying hiring and training employees on inclusivity. By creating a senior-level diversity position, companies demonstrate that diversity, like sales, accounting, or marketing, is a measurable and essential business process.

When employees are able to take time off for holidays, recite their workplace’s inclusion policies, and identify the specific person in charge of diversity, they have more reason to think that their company will respond to their expectations about managing diversity.

Sponsoring Employee Resource Groups

Businesses are also giving employees ownership in their company’s diversity efforts.

“In order to truly embed diversity and inclusion in a company culture, you have to create opportunities for engagement at all levels of the organization,” said Karina DeLaCruz, vice president of CSAA Insurance Group, a AAA and homeownership insurer.

DeLaCruz says her company uses voluntary, employee-led resource groups and diversity councils to involve employees in decision making about diversity-related initiatives. “Diversity and inclusion has to be ingrained as part of everyone’s work,” she said.

By responding to worker sentiment and providing employees the opportunity to help make decisions about diversity, companies are demonstrating their commitment to diverse, inclusive workplaces.

3. Businesses Use Diverse Leadership Teams to Attract Top Candidates

American business leadership is not diverse. Fortune estimates that 72% of corporate leadership positions at its top 500 companies are held by white men; only 4 of the 500 chief executives at those companies are Black.

Diverse leadership allows companies to meet employee wishes and successfully recruit top talent.

When Clutch asked employees which diversity initiative they most want to see at their company in the next year, they were most likely to say more racial and ethnic minorities in leadership (25%).

Twenty-one percent of employees (21%) say they would like to see more women in leadership.

what diversity initiatives do employees want?

Workers are also interested in:

  • Employee diversity training and discussion (24%)
  • Recruiting underrepresented groups (20%)
  • Business donations to diversity initiatives (9%)

When companies have diverse leadership teams, they meet employee sentiment.

Companies with diverse leaders do more than just reward the employees they already have, though. Having diverse leadership allows companies to recruit the best possible candidates.

Allie Fleder, chief operating officer of SimplyWise, a financial technology startup, believes diverse leadership indicates that a company is serious about diversity.

“Diversity at the top leads to a focus on and investment in diversity throughout the organization,” she said. “This is critical for recruiting the right candidates.”

Fleder posed a hypothetical: A fintech company finally finds the perfect candidate for a software engineering position. She’s a high-honors graduate with a computer science degree and fantastic work experience.

  • Will the candidate want to take the job if the company’s engineering department is exclusively male?
  • What if the company’s entire leadership team contains no women?
  • Would she be more likely to accept an offer from a company with more diversity?

Fleder thinks the company would probably miss the candidate: “High-quality candidates want to be on diverse, inclusive teams where they can be themselves,” she said.

Young employees, in particular, are used to being themselves in highly diverse environments.

Companies without diverse leadership are increasingly at a competitive disadvantage to attract and retain top talent.

4. Businesses Use Diversity to Help People of Color Succeed

Successful companies need successful employees. Companies with diverse workforces can help all employees, especially people of color, succeed at their jobs.

When Clutch asked employees if the level of diversity at their current company affected their ability to succeed, about 6 in 10 people of color (61%) said yes.

Roughly half that number of white people (32%) responded yes to the same question.

who thinks business diversity affects their professional success?

Experts believe people of color recognize that mentorship improves the odds of professional success and that successful, authentic mentorship is more likely to happen at a diverse company.

Dr. Luz Claudio, a professor of environmental medicine and public health at the Ichan School of Medicine at Mt. Sinai, has spent a career as an Afro-Latina woman scientist. She has worked at Mt. Sinai for 29 years and says that the management team at the school of medicine has rarely included women of color.

Claudio says that as she has advanced in her career, young people of color have frequently sought her advice.

“The experiences we share as people of color are very different,” Claudio said. “As you continue to climb the corporate or academic ladder, the need for mentoring in that regard does not go away.”

Mentoring is broadly important for career success. In fact, more than 70% of Fortune 500 companies have employee mentoring programs.

This summer, companies including Salesforce began mentorship programs that support employees and interns who are people of color.

Salesforce’s Equality Mentorship program pairs senior-level employees of color with early career employees of color. The program allows mentors to give mentees advice on topics such as career development, giving and receiving feedback, and expanding their professional network.

Mentors receive a better sense of what struggles and successes employees throughout the organization are experiencing, and Salesforce leverages its existing diversity to ensure early-career people of color have the support to advance.

Promoting diversity does not simply keep employees happy. Companies use diversity to help people of color succeed.

Companies Manage Diversity In Retention, Recruitment, and Employee Advancement

Companies are changing their approach to diversity to reflect new corporate expectations.

Businesses manage diversity through multiple methods, including:

  • Acknowledging employee concerns about diversity
  • Demonstrating to employees that diversity is a company value
  • Using diverse leadership teams to attract top talent
  • Leveraging pre existing diversity to help employees of color succeed

With a strong diversity management plan, companies are investing in their employees and their future.

About The Survey

Clutch surveyed 400 full-time employees in the U.S.

Thirty-four percent of respondents (34%) live in the South; 33% live in the Midwest; 19% live in the West; 15% live in the Northeast.

Forty-six percent of respondents (46%) are male; 44% are female; 11% did not identify their gender.

Twenty-nine percent of respondents (29%) were born between 1981 and 1996; 32% were born between 1965 and 1980; 20% were born between 1946 and 1964.

Sixty-four percent of respondents (64%) describe their ethnicity as White or Caucasian; 4% are Black or African American; 3% are Latino or Hispanic; 3% are Asian; 3% are Native American Indian or Alaska Native; 2% are native Hawaiian or Pacific Islander; 22% are a different ethnicity or chose not to identify their ethnicity.

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