Reputation matters when it comes to winning the war for diverse talent…especially in Silicon Valley.  Facing pressure from Jesse Jackson to increase ethnic and racial diversity in their workforces, technology firms have pledged they could and would do.

Despite increased investment in training, diversity and inclusion (D&I) expertise and benefits, data released by Facebook, Apple and eBay shows a mere 1% increase in their ratio of women in 2016 vs. 2015 when at the same time LinkedIn saw a 3% reduction in its non-white employees.  At the same time, three former Google female employees recently filed a class action lawsuit alleging a pattern of discrimination against women workers, including systemically lower pay than their male counterparts.

The lack of progress combined with continued reports of sexual harassment has left many observers questioning the veracity of promises made by these CEOs to bridge the diversity gap.  On the flip side, Intel has managed to preserve its hard-fought reputation for being an employer that values diversity even though data shows changes in its workforce diversity is on par with the others.

When I reflect on why, it is due in large part to being known as a good corporate citizen.  A survey from Deloitte showed 70% of respondents said a company’s commitment to corporate social responsibility (CSR) would influence their decision to work there.  When companies like Intel align its activities with the social, economic and environmental expectations of employees and customers, they provide tangible evidence bridging the diversity gap remains a priority.

Which is why the extent of organization’s corporate social responsibility (CSR) efforts has increasingly become a bellwether when stakeholders assess the credibility of an employer’s stated commitment to diversity and inclusion.  In today’s polarized and racially-charged environment, let’s take a closer look at what’s at stake and how your CSR strategy can be a differentiator when attracting and retaining diverse talent.

Why it matters

Public opinion research shows stakeholders not only want companies to play an active role in their community, it’s their duty.

• Brand Value Proposition: According to a recent Global Strategy Group study, “84% of Americans believe that businesses have a responsibility to bring social change on important issues.” It also found that “81% of Americans believe corporations should take action to address important issues facing society.”
• Retaining talent: More than four in 10 Millennials (44%) say they would be more loyal to their organization if their own CEO took a public position on a hotly debated current issue according to Weber-Shandwick.
• Market share: Another study by Cone Communications showed 70% of Millennials are willing to spend more with brands that support causes they care about.

In my over 25 years as a diversity and inclusion practitioner, I have found organizations that are consistently recognized for being committed to diversity and inclusion have effectively leveraged their CSR efforts to help enable achieving outcomes.

What you can do

People often ask me to identify what practices best-in-class companies employ to separate them from the rest when it comes to being known as diversity and inclusion leader.  I believe organizations that apply these five guiding principles when developing their CSR and D&I strategies will provide stakeholders proof that they are in it for the long haul:

• Align CSR efforts so they support D&I goals: When setting priorities, invest in communities that reflect the current as well as aspirational diversity of your workforce.  Employers know that closing the diversity gap in the workplace would not be possible without the financial, educational and career resources provided by non-profits who have a keen understanding of the barriers to employment facing underrepresented minorities.  When these well-respected community organizations agree to work with a company, it sends a message to diverse talent that this employer is a trusted partner who is committed to making change happen.Accenture’s Skills to Succeed corporate citizenship initiative is a best-in-class example.  The program focuses its financial and pro-bono contributions to support organizations that equip people from underserved communities with the skills they need to get a job or build their own business.  These include many of the populations Accenture targets for diversity recruiting.
• Engage stakeholders when setting priorities: It is important to seek input from members of the various demographic groups before finalizing your diversity and inclusion strategy goals.  Stakeholder feedback will not only help shape and validate your hypothesis, it will serve to create consensus as to what the greatest challenges impacting success.  More importantly, these employees will feel like they are part of the solution and ultimately become internal champions and brand ambassadors.This is what Pinterest learned when it set out to increase the gender diversity of entry-level talent.  According to an article in The Harvard Business Review, Pinterest realized this would require making sure women engineers were well represented at all levels of the company.  However, after speaking with current female engineers they learned it was as important to have greater representation of women at the top to avoid associating women with only junior positions.  As a result, they adjusted the strategy to focus specifically on hiring senior women later in the year.  Even though this lowered the internal goal, all stakeholders felt it was worth the trade off to hire these more senior women.
• Take actions that demonstrate authenticity: As I mentioned in my April blog post, leadership teams must understand there is a risk to the bottom line if they are unable to provide stakeholders with concrete evidence of their sustained commitment to diversity and inclusion.  For this very reason, Intel announced in 2015 it was allocating $300 million to accelerate the pace of change in their workforce by investing in community organizations dedicated to enabling African-American and Hispanic candidates secure technology jobs employers are struggling to fill.This is also why many CEOs resigned from President Trump’s Advisory Councils.  When asked why he stepped down, Merck CEO Kenneth Frazier said that “America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy.”  Since Merck’s brand value proposition is built on a foundation that includes valuing diversity, the decision to leave the council was proof that they not only ‘talk the talk’ but ‘walk the walk’.
• Communicate transparently with all stakeholders: Being open about the diversity of your workforce, the plan in place to reach goals and what progress you are making is vital to building trust with stakeholders.  As part of Jesse Jackson’s campaign to boost diversity in Silicon Valley, technology companies agreed to annually publish their employee demographics.  For those seeking employment, the data provides a way to assess which companies are best at delivering on diversity promises.When Accenture published the 2016 demographics of its US workforce for gender, ethnicity, persons with disabilities and veterans earlier this year, they made modest increases in these areas of diversity over 2015. They also set a new goal to grow the percentage of its women in the U.S. from 36 percent to 40 percent by 2020, showing a renewed commitment to meeting and surpassing expectations.It is important to note that research by Dean Mundy shows organizations can do a better job communicating about its D&I efforts, with most targeting messages as part of the recruiting process.
• Be accountable for achieving outcomes: An old management adage says, “you can’t manage what you don’t measure.” Companies known for effectively embedding diversity and inclusion into its culture have done so by making it like any other business objective that managers must hit if they want their full compensation.  Employers increasingly hold managers accountable for outcomes as well as their own behavior using diversity scorecards that measure progress on metrics related to recruiting, hiring, career development, and retention.Jeffrey Mezger, the CEO of home builder KB Home, is the most recent example of the price leaders pay when they fall short.  Mezger was recorded on security camera footage making sexist and homophobic slurs during a verbal altercation with his neighbor Kathy Griffin.  The board of directors decided to cut Mezger’s 2017 bonus by 25% because his “behavior in his personal dealings with a neighbor is unacceptable and a negative reflection on KB Home.”

Being a good corporate citizen means partnering with and supporting these vital links to the communities. Remember that what began as a public relations tool has evolved into to a strategic differentiator in today’s competitive war for talent.