Tapping into diversity

Traditional
recruitment campaigns fail to attract diverse candidates. Pepi Sappal explores
some of the more creative methods being used by the Fortune 500 companies

Despite
the predicted downturn in the US economy, diversity recruitment in the country
remains at an all-time high. Fortune 500 companies such as Daimler-Chrysler,
Prudential, Tellabs and Ernst & Young (E&Y) continue to pump huge
resources into diversity initiatives.

Over
the past five years, E&Y, for example, has doubled the number of minorities
at its firm. And almost half its employees in the US are women (15,000 out of
33,000). Approximately 30% of Tellabs’ workforce are minorities and 30% are
women. And the numbers are growing. Of the college graduates that Tellabs hired
in 1999, almost 50% were minorities. Yet attracting these candidates isn’t
easy.

A
common complaint from firms is that despite pumping million of dollars into
diversity advertising campaigns, they fail to attract a satisfactory response
from these niche groups, even if the recruitment ads carry the image of
diversity. A mistake many companies make when hiring diverse employees is to
advertise in mainstream sources. "That’s because this method will always
result in attracting mainstream candidates," says Margaretta Cullen, senior
VP for global HR at recruitment consultancy TMP Worldwide in New York. "So
you have to cast a very broad net to catch these niche groups.

"And
there are several ways that companies can reach out to these diverse groups by
themselves. An effective method is to advertise in niche publications such as
Hispanic Business Weekly, Working Woman magazine and Black Collegian magazine,
or specialist additions of mainstream press such as the diversity issues of
Fortune magazine or the Wall Street Journal."

Firms
can also tap into Websites where they can find the resum‚s of diverse
individuals, such as the Diversity Employment Exchange (www.diversityee.com).
Most niche groups have their own Websites. Wemedia.com, for example, is an
on-line resource for the nation’s disabled employees that offers a job board
for postings from firms that are open to hiring disabled workers.

"If
companies want to attract diverse groups, it’s vital to be seen in minority
communities by sponsoring community events, or to be visible in targeted
advertising," adds Cullen. Goldman Sachs, for example, is renowned for
publicly courting the gay population. Last March, it co-sponsored the Lesbian
and Gay MBA conference in Philadelphia. Dunn & Bradstreet is successful in
its diversity initiatives because it has forged partnerships through several
community outreach programmes such as the Hispanic Organisation of Leaders for
Action (HOLA), Gay and Lesbian Information Support Network (GLISN) and Women
Involved, Supportive, Empowered (WISE). Cadbury Schweppes supports several
initiatives, such as the Hispanic Heritage Awards – awarded to Hispanic people,
like Gloria Estefan, for their major contributions to arts and business.

Companies
like Ford are concentrating on targeted efforts through specific communities.
"To reach diverse communities, we’re doing things like targeting
universities with a higher percentage of women and minority groups, as well as
getting involved with disability groups and local communities," says
Surinder Sharma, European diversity director at Ford. "By making these
links we’re expanding the pool that we can fish in for our future talent."

Firms
that establish initiatives that welcome and embrace diversity will certainly
find it easier to attract it. E&Y, for example, has a great reputation for
attracting women. "But it has taken a few years and a range of initiatives
to achieve it," says Deborah Holmes, national director at E&Y’s Office
for Retention. "Through initiatives like mentoring, networking and
flexible work arrangements we have successfully retained women."

E&Y,
however, has avoided the traditional advertising route. "It’s not always a
smart strategy, as you can risk overselling yourself, and run into problems of
portraying women in a way that may be disagreeable to them – so we let our
record speak for itself," explains Holmes. "The market turns out to
be a good source of information. We’re among the Fortune Top 100 companies to
work for, and on Working Mother’s list of 100 places to work."

Diverse
recruitment fairs are another way. Cadbury Schweppes gets involved in AISEC’s
(the world’s largest graduate organisation, which facilitates thousands of
exchanges a year) initiatives. Last year it supported AISEC’s Developing
Leaders Day 2000. "Not only did this event give us the opportunity to meet
and develop leaders of the future, but it also gave us access to some 50,000
graduates from 84 countries," says COO John Brock.

AISEC’s
president, Jose Pablo Retana, believes many blue-chip firms have begun to take
an interest in AISEC because it’s the perfect place to find those diverse
leaders who will eventually replace today’s Anglo-Saxon-dominated boards, many
of which lack the key market insights needed to capitalise on today’s global
opportunities.

Other
career fairs organised by companies like Women For Hire are also popular with
leading US corporations. By attending this type of event, companies can access
a diverse selection of high-calibre women under one roof. "Employers get a
chance to see those female students who don’t sign up with their college career
service offices [approximately 75%]," says Tory Johnson, CEO and founder
of New York-based Women For Hire. "Our events have been successful with
high-potential women because they don’t have to rely on a piece of paper to
define them. They can come and select 10-15 companies that they’re interested
in and approach them in person."

Surprisingly,
the best and most cost-effective method the corporates are using to attract a
diverse following is through their existing employees. According to SHRM’s
survey, almost three-quarters (71%) of companies surveyed reported that
employee referrals resulted in the most minority hires.

Lance
Richards, international HR director of Canadian telecommunications company
Teleglobe, claims that one-third of his firm’s 2000 employees scattered in more
than 51 countries have been hired this way. The phenomenal response was
generated through word of mouth after simply pinning up posters in six
different languages throughout its offices offering a referral bonus.

Diversity-friendly
credentials

It
is very easy for prospective employees to gauge just how diversity friendly a
prospective employer is:


The answer is just a couple of clicks and a few phone calls away. Most
potential candidates will have a friend who knows someone that’s connected to
someone on the inside of a particular firm. "And they will pick up the
phone to get the real story," claim Sharon Hall and Ginny Clarke of
executive search firm, Spencer Stuart. "That coupled with Net access will
quickly reveal any bad publicity."


Minority candidates will look for people who look like them. They’ll check the
corporate literature and pictures in the lobby and hallways to see
representation of people they look like.


What special efforts are being made to attract diverse groups? "A company
serious about its diversity initiatives will be active and visible in minority
communities by sponsoring things like youth and internship programmes. It will
also have affinity groups where like-minded people can share the same interests
and network," says Lisa Willis Johnson, chair of SHRM’s Workplace
Diversity Committee. "If, like Microsoft, it has hundreds of groups for
every possible nationality and every interest you can think of, from the
Filipino community to plant lovers, you know that the firm is pretty committed
to diversity."


Can you prove minorities stay and progress within the firm? According to Mike
Reed, a partner and vice president of Cook Ross Inc, a US-based diversity
consultancy, candidates only have to look at retention rates of diverse
applicants to see whether a firm is serious about diversity or just paying lip
service.


What percentage of middle and senior managers are women or people of colour?
"Is there clear evidence of diversity in every rank of the organisation,
or just a token person here and there?" asks Peter Harrison, MD of UK
consultancy DiversityNow. If they are genuinely diversity friendly, you’ll see
women, people of colour, disabled, young and old generations, in every rank.


The ultimate test though is the composition of the board. If the board is as
diverse as it should be, then it passes with full marks. Unfortunately few pass
with flying colours because that’s one attribute that many firms, even the most
diversity friendly, still lack.

Minority
MBA graduates

The
most sought-after population in the US

Minority
MBA graduates have suddenly become the new hot targets for corporate America.
"Because there are so few of them, they are aggressively being courted by
Fortune 500 companies desperate to get them into their organisations,"
claims Margaretta Cullen, senior VP for global HR at recruitment consultancy
TMP Worldwide. A study by St Louis-based Consortium for Graduate Study in
Management confirms this trend – 76% of the 146 Fortune 500 companies surveyed
planned to increase the number of minority MBA graduates hired in 2001.

"As
the demand for minorities with an MBA outstrips supply, these candidates are
certainly spoilt for choice," says Cullen. "Those coming out of a
good MBA programme will not only have three or four job offers to consider, but
they can also command signing-on bonuses of $50,000 upwards before they even
consider stepping through the door."

Ginny
Clarke, who co-leads the diversity practice of executive search firm Spencer
Stuart, agrees: "These graduates can afford to be picky. As well as
offering a competitive salary, which is usually at the higher end of their
salary bracket, companies have to make these individuals feel welcomed in both
the workplace and the community. That means offering benefits like membership
of a country club, or finding them a suitable home."

So
why the sudden rush for minority MBAs? For a start, there is a lack of
minorities in senior ranks who can be groomed for boardroom and CEO positions.
According to Spencer Stuart, a firm that’s reputed to carry out half of Fortune
500’s board and CEO searches, corporate America has a very limited pool of
board-level minority applicants to fish in.

"They
are sharing between 50 and 70 people who sit on about a dozen boards each
because they are the only minority candidates qualified to do the job,"
claims Clarke. She cites Ann Fudge, a group VP at Kraft Foods, as one such
example. Fudge, an MBA graduate from Harvard, sits on several boards, including
Honeywell International, General Electric and the Federal Reserve Bank of New
York.

"But
if these firms looked harder and in non-traditional places, like universities
for professors with corporate backgrounds or at those sitting on other
executive committees, they would find there are, in fact, more than 500 people
of colour who are board-ready," adds Clarke.

An
MBA, however, doesn’t automatically guarantee entry to a board position, claims
Cullen, because additional years of experience, coupled with mentoring and
coaching, are required. So in the short term, the meagre 4% of minorities that
make up the total number of Fortune 500 company CEOs is unlikely to change.
However, it’s only a matter of time before more minorities will be joining
African-American CEOs like Ken Chenault of American Express and Franklin Raines
of Fannie Mae at board level and CEO positions.

The
other reason commonly cited for their sudden rise in popularity, is that
minority MBAs are needed in senior ranks as role models to mentor the younger
minority generations coming up through the management ranks. "If
organisations are to succeed in recruiting and retaining minorities in junior
and middle management, they need to see people that look like them in senior
positions, so they can see there’s a future for them within that company
too," adds Cullen.

Sourcing
minority graduates isn’t a problem though. The obvious place to look is
business schools, especially international ones like IMD in Switzerland or
France’s INSEAD, who are making a concerted effort to increase diverse
populations. To get closer to MBA minority communities, companies like Dunn
& Bradstreet, Ernst & Young (E&Y) and Daimler-Chrysler Corp partner
and forge links with organisations that produce qualified minority MBA talent,
such as the National Black MBA Society or the National Society of Hispanic
MBAs. The National Black MBA Society, for example, holds a national conference
every year where corporations can have access to a few thousand MBA candidates.
To show their commitment to these organisations, firms not only sponsor their
events and offer scholarships to potential candidates who are members of these
societies, but take out stands and do presentations in the hope of attracting
some of this rare talent.

E&Y
is a case in point. "The only trouble is, there’s just not enough to go
round," says partner and national director of E&Y’s Office of Minority
Recruiting and Retention, Allen Boston. "Although we’ve doubled the number
of minorities at E&Y since 1995, finding those with advanced degrees and
MBAs is still proving difficult," admits Boston. "So to make up for
the shortfall, we’re cultivating our own. As well as providing special
scholarships to potential candidates through organisations like the National
Black MBA Society, we offer new recruits the opportunity to do an advanced
degree on a part-time basis even before they join us."

Of
course, companies can also hire the services of executive search firms to find
experienced minority talent already in employment. But poaching them isn’t
easy. According to Clarke, it’s very difficult to recruit talent from companies
with a good track record of diversity, even when they’re offered a better
package. "For example, when we’ve approached potential recruits for
clients from companies like Kraft – one of the few firms with a diverse board –
we often get turned down because they feel that the chances of succeeding with
their existing employer are better than moving elsewhere."

So,
for now, those who want to get their hands on this limited supply will have to
fight for it. The winners, according to Cullen, are those that offer these MBA
graduates more than just an attractive package. These candidates will want to
see real evidence of mentoring programmes and career-pathing opportunities to
help them get into the boardroom and those COO/CEO positions before they sign
that all-binding contract of employment.

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