Hope you are doing great. Hope you are getting ready to enjoy the holiday season. We have plan to bring a summary of the yearly trends and the expected forecast across various parameters
In this email, we have looked at two topics
- What have companies done with respect to Diversity in 2020 (major types of initiatives)
- A template for Recruiter to monitor peer trends
- Gender Pay Gap: Several companies published the gender pay gap difference in 2020. There is a wider acknowledgment among various types of companies that this is an issue. Companies reported a mean gender pay gap in the range of 6.5% to 12.5%. (average across multiple job functions). Some companies reported gender gaps in bonus payments (especially in Europe, where there are mandatory reporting requirements in several countries). As companies start tracking this aggressively, the issue will hopefully be resolved over time
- Investments in Black and Latinx led venture funds: This is another big trend in 2020. Black and Latinx founders have been underrepresented in venture capital funding for far too long. PayPal, for example, is investing in Black and Latinx-led venture capital funds: Chingona Ventures; Fearless Fund; Harlem Capital; Precursor Ventures; Slauson & Co.; VamosVentures; Zeal Capital Partners. I have always believed the best way to fight for Diversity is to influence venture capital. Hopefully, this trend will expand further
- Board Room Targets: Many companies have expanded board room representation targets. It is surprising that many boards still do not have minority ethnic representation. Although newly-appointed directors are increasingly diverse, 37% of S&P 500 firms did not have any Black Board members in 2019, and Black directors comprised just 4.1% of Russell 3000 board members that same year. Perhaps this process should be led by Talent Acquisition to bring in more transparency.
- Supporting Non Profits and Youth Directly: Post the pandemic, many companies fund the STEAM programs run by many non-profits. (STEAM = Science, technology, engineering, arts, and math (STEAM). The American Honda Foundation has awarded grants of more than $700,000 across various non-profit initiatives. Companies have always done this in the past but what is changing is they are managing and monitoring progress more closely (in an agile manner)
- Executives Salaries tied to Diversity Goals: Companies are tying executive salaries to Diversity goals. Next year, Starbucks will tie their executives’ salaries to diversity goals. While they’re not specific on exactly how their salaries will be affected, they are clear on their goals. By 2025, they plan on having 30% of their corporate levels and 40% of their retail and manufacturing roles to be Black, Indigenous, and people of color. Right now, minorities make up less than 20% of senior vice president positions or higher. Compared to the US population, people of color make up around 40%.
- Large Talent Pool Development: Companies are also thinking about large, diverse talent pool initiatives. General Motors will be one of the founding members of the new OneTen initiative, which hopes to provide one million Black Americans with jobs within the next decade. The OneTen initiative was founded by Merck CEO Kenneth Frazier and the executive chairman of IBM, Ginni Rometty. The group’s goal is to provide up to one million Black Americans without a college education with jobs paying $40,000 or more per year. The group will also help potential employees network with leaders from major companies like GM and provide them with the necessary skills to succeed in various industries.
- Reporting Structure of the Chief Diversity Officer: In several companies, Chief Diversity Officers report directly to the CEO, signaling this is a strategic initiative. Recently, US-based AMC Networks has appointed Aisha Thomas-Petit as its first chief Diversity, equity, and inclusion officer, who will report to the company CEO. (Also note the emphasis on the word Equity)
- Companies Committing to more reforms: Citibank predicted that issues around social Diversity might cost the global economy somewhere in the tune of 16 Trillion dollars. As a result, companies are investing in education and awareness programs around Diversity and inclusion in the communities they operate.
- An integrated plan: Companies realize that Diversity variables cannot be looked at in isolation. For example, one cannot look at women’s leadership proportion in isolation with ethnic leader proportion.
For Recruiters, understanding the trends of the various companies they target is very useful. One more tool kit that is useful in tracking the headcount in a given location by various functions. This type of tracking is very useful to refine the recruitment efforts. Here we have provided a sample from the Toronto area. We can build similar dashboards for you. Also notice the trends in the footnotes that will help you validate the reasons why the headcount is changing
Sample from Toronto Area (we can build any Geo/functions for you)