Over the next ten years, record numbers of leaders and managers will approach retirement in the U.S. labor force and look to off-ramp.
The trend provides companies with a unique opportunity to accelerate their demographic profile at the management and executive level.
Leaders need to assess their organization’s demographics and age profile, identify when employees in mission critical positions will retire, understand what knowledge and skills will be lost, and develop a plan to advance and onboard the next generation of diverse talent.
This report provides some high level statistics related to the benefits of diverse teams, gender and ethnic diversity in the U.S. workforce, as well as information and tips on leveraging succession planning to increase diversity at senior management and leadership levels.
Over the next ten years, record numbers of leaders and managers will approach retirement in the U.S. labor force and look to off-ramp. The trend provides companies with a unique opportunity to accelerate their demographic profile at the management and executive level.
Leaders need to assess their organization’s demographics and age profile, identify when employees in mission critical positions will retire, understand what knowledge and skills will be lost, and develop a plan to advance and onboard the next generation of diverse talent.
This report provides some high level statistics related to the benefits of diverse teams, gender and ethnic diversity in the U.S. workforce, as well as information and tips on leveraging succession planning to increase diversity at senior management and leadership levels.
One of the biggest things stopping managers from implementing diversity is that they’re afraid that introducing people who may not agree with each other will hamper productivity. Because diverse teams outperform non-diverse ones, companies should actively try to engage with diversity initiatives as soon as possible to make sure they’re implemented, instead of trying to hamper them out of fear.
In fact, the awkwardness that comes with not understanding those around you is what makes diverse teams work so well. In a cognitive intelligence study done by MIT engineers, researchers observed that successful teams had three things in common:
In other words, having different types of people on the same team can help others look at problems more carefully while also being more innovative, creative and inclusive about their solutions.
Another stat that supports moving toward greater gender diversity. When companies employ more women, they’re able to take advantage of a greater wealth of perspectives. This, in turn, causes companies to have more angles from which to tackle big business issues. The results are faster solutions, more creative thinking, and higher overall revenue.
Women of Color Have a Greater Wage Gap
• In 2017
• Black women working full-time earned 61 cents for every dollar white, non-Hispanic men earned.
• Latinas working full-time earned only 53 cents for every dollar white, non-Hispanic men earned.
• Asian women working full-time earned 85 cents for every dollar white, non-Hispanic men earned.
Women of Color Represent Almost Half of the Low-Wage Workforce
• Among the low-wage workforce in 2016
• Black women: 18%.
• Latinas: 24%.
• Asian, Hawaiian and/or Pacific Islander women: 7%.
Women of Color Remain Underrepresented in Leadership Positions
• In 2017, Black and Hispanic women made up a smaller percentage of total women employed in management, business, and financial operations occupations than white or Asian women.
Whatever your organization’s size and your target, a succession plan should focus on certain core elements:
• It’s up to CEOs, CFOs, COOs and other C-level executives to set the stage and agenda for succession.
• Be sure your HR leadership has a seat at the executive table to ensure that succession planning strikes that fine balance between a data-driven initiative and a people-centric approach to talent management.
• Identify mission-critical positions and any current or impending talent gaps—based on the strategic opportunities you identify and how you create competitive advantage. Which jobs and skills are must-haves? Do those positions already exist or do we need to create them?
• Identify employees at every level who have the potential to assume greater responsibility advancing your organization’s strategic goals and how they fit together—what combination of A, B and C performers do we need and how do we attract and keep them? As leadership roles rapidly evolve in our digital age, the succession plan and profiles of future leaders must keep up.
• Encourage meaningful investment in a training and development program for high-potential employees—be ready to defend allocating resources to a given talent pools. Many organizations find that the women and culturally diverse employees don’t quite have the experience and skills they need to become top leaders. Be sure you’re expunging unconscious bias in your systems and your culture, so your assessments and succession plans
reflect gender-neutral and race-neutral standards.
• Establish a process for revisiting and revising your succession plan as conditions change.
• What are the external and internal factors affecting this specific position?
• How will the position be used in the future?
• What competencies or skillsets will be required?
• What is the current bench strength?
• How will you provide stretch opportunities to high-potential employees?
• What is the path from where they are to where you need them to be?
• What are the gaps (competencies or skillsets not possessed by current employees)?
Workforce goal setting should be based on a sound methodology. The methodology should be able to stand up to any challenges and be able to answer the simple question of: What is the basis for establishing this goal?
Is it based on:
• US Census? Global Market Region Data availability? Designated market area (DMA *)?
• # of ethnic groups available in the workforce for each particular function/role or industry?
• % of demographic represented in the business unit’s DMA?
• Based on the year over year hiring trends for diverse groups in each department?
• Determine the scope: Will you establish by region? By country/location? By business?
• Or a combination of the list above?
All workforce goals would be based on Meeting or Exceeding the designated market area (DMA) for each business unit. In more simplistic terms, we want to look like the places where we live, work and play.
A review of talent data at ADP, including mobility analysis, succession planning, associate engagement survey and talent acquisition identified areas of opportunity. A combination of strategies were deployed including diverse slates for executive openings; reporting on diversity metrics monthly to executive committee; expanding the role and number of employee resource groups to include business outcomes; implementing “the business case for diversity” in executive and leadership programs; expanding unconscious bias training for leaders; establishing 3-year diversity goals for women and minorities in executive leadership and
introducing accountability scorecards by business area.
One of ADP’s programs, “Cultivate Your Career” was focused on advancing women of color. ADP became the title sponsor for the
Black Enterprise Women of Power Summit and sponsored approximately 45 high potential women of color across multiple disciplines. In addition, the company sponsored quarterly development programs targeting these high potential women covering topics like executive presence and business acumen.
Another program, Multicultural Leadership Development, offers high potential men and women of color a one-year leadership seminar focused on leading self, leading others and leading the business. ADP also initiated key partnerships with non-profit organizations focused on gender and ethnic diversity to support its talent pipeline.
The company has achieved a 5-point improvement in the representation of both women and minorities in executive roles. Engagement for women and minorities improved over the same period.
Baker Tilly is taking a more comprehensive approach to succession planning by pinpointing talent development intersections and applying a lens of age, gender and ethnicity along with competency criteria. These intersections include: a) learning and development programs at different career stages; b) selection for special projects; c) inclusion on client engagement teams; and d) firm governance. Additionally, Baker Tilly is launching a revamped mentoring program initially geared toward women, with the goal of expanding to non-majority male team members. The mentoring program has four objectives: 1) increase diverse leadership; 2)
improve retention; 3) learn and lead differently with empathy; 4) reach one’s full potential with whole self.
In two years’ time, the company increased women representation on all firm governance committees by 25% with several committees chaired by women. The company is also taking a more deliberate approach to ensuring equal gender representation in learning and development programs—especially those geared toward partner track. The company revamped its five-year partner projection process in two key ways: 1) elevating its visibility with the board of partners and national management committee and 2) actively selecting candidates from the five-year partner projection list for visible leadership opportunities throughout the year. The
selection of teams for firmwide projects now considers age, ethnicity and gender in addition to knowledge and experience. Baker Tilly is increasing awareness of inclusion throughout the firm by using its intranet and internal communications to highlight successful client engagements whose teams are also diverse.
