It’s not breaking news that a robust diversity and inclusion strategy is good for business.
Companies in the top quartile for gender diversity on executive teams are 25% more likely to have above-average profitability than companies in the bottom quartile…[ ] They also had a 27% likelihood of outperforming their peers on longer-term value creation.
Source: McKinsey & Company
Companies with more diverse management teams have 19% higher revenues due to innovation.
Source: Boston Consulting Group
Gender-diverse and ethnically-diverse organisations perform 15% better and generate 35% more revenue.
Source: McKinsey & Company
What is perhaps less known, is the powerful potential a diverse contingent workforce can bring to your business; almost a bigger potential from that derived from a diverse full-time workforce.
You see, the incredible difference is this: contingent workers typically have a limited shelf in your business. So by the very nature of their engagement – a multitude of different workers coming through your business on a regular basis – you’re going to amplify the business benefits and learnings from engaging a diverse mix of these workers.
Keep in mind, diversity and inclusion initiatives in today’s workforce, factor in a far broader scope of worker types than years gone by. Gone are the days when diversity was simply about race, gender and ethnicity. Today, the scope of diversity includes:
So why is a diverse contingent workforce important? And what can you do to achieve a strategically designed, quality program of diversity and inclusion in your contingent workforce?
Read on for more…
Benefits of Diversity and Inclusion in Your Workforce
Firstly, let’s take a look at the proven benefits of a diverse workforce – that is, across all categories of workers. These are just the tip of the iceberg…
- Diversity employers who sit in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians (Source: Diversity for Social Impact)
- A Deloitte report found that cognitively and demographically diverse teams can enhance innovation by 20% and identify/reduce risks by up to 30%
- Gartner predicts that through 2022, 75% of organizations that boast a diverse and inclusive culture among frontline decision-makers will exceed their financial targets
- In 2019, IBM announced its effort to embrace neurodiversity by hiring high-functioning individuals with autism spectrum disorder (ASD). The company stated that “Neurodiverse people approach problems differently and have to think harder to get around what the rest of us accept.”
- Recruiting from a diverse pool of candidates increases the likelihood that you’ll find the best-fit worker person for the contract or job at hand. And, these workers are more likely to feel valued and respected as part of an inclusive work environment, and so are less likely to leave.
- Teams with a high deviation from the “standard” perspective (in other words, cognitive diversity) are more likely to solve a problem than non-diverse teams, according to an experiment run by the Harvard Business Review.
Total Talent Strategy
You can’t achieve the true benefits from a total talent strategy if your approach to diversity and inclusion for your full-time workers is different from that of your contingent workers. Plain and simple.
The whole ‘total’ part of the ‘total talent strategy’ approach, means managing and engaging your workforce as an integrated whole, rather than individual segments.
So by establishing a robust, broad-based diversity and inclusion policy, you can implement it across all categories of workers in your business, and reap maximum diversity benefit.
Don’t Rely on your Suppliers
So… you have an established diversity and inclusion program for your full-time workers which has been in place for some time.
And your contingent workers?
Well, they’re taken care of by procurement.
Which includes, one or two ‘diversity’ credible agency suppliers for the provision of your contingent workers.
Think that’s enough?
Well, it isn’t.
If your contingent workforce program is currently led by procurement, your business is unlikely to have the practical expertise to facilitate a quality diversity and inclusion policy, across your contingent workforce. And in light of the continued growth of the contingent labour market, a total-talent solution (see above), is the smartest way to go. This includes engaging HR, the executive team, line managers and policymakers in the diversity program.
Gig economy is growing 3x faster than the overall U.S. workforce, with freelancers predicted to make up the majority by 2027.
As a cost saving measure, 32% of the organisations are replacing full-time labour with contract workers.
Gartner 9 Future of Work Trends, Post COVID
I noted at the start of this article, that the contingent workforce, being short-term in nature, offers a huge opportunity for organisations to reap a broad range of diversity and inclusion benefits, as different workers come and go. This is particularly so from tenure-limited workers.
But what about those contingent workers who are with you for six, eight, 12 months, or more.
And what about when contingent labour contracts get extended?
The benefit here is clear: including contingent labour in your diversity and inclusion strategy will offer innovation and cultural influence, over time. Something your business may stand to enjoy as a competitive advantage.
Post COVID World
The use of contingent workers in the post-COVID world is expected to continue to rise.
Agility, flexibility and being able to scale as businesses rebound, will likely call for more contingent labour. Importantly, as demand for contingent workers rises, so too will the options available to these workers. And if your diversity and inclusion strategy doesn’t cover contingent workers, both your potential talent pool and your appeal as an employer will be limited.
No doubt, your organisation is across the benefits of hiring workers with diverse backgrounds, life experiences, perspectives and beliefs; the opportunity for a positive cultural impact from a diverse workforce is very real, especially when considering tenure-limited contingent workers. Keep in mind though, diversity and inclusion require an ongoing commitment.
There’ll be challenges and risks – like co-employment, for example – but with an established diversity and inclusion framework and a strategy to follow, you will consistently be able to attract the better contingent workers in the market.
As one of the world’s leading providers of contingent worker management solutions, CXC is well positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across five continents and decades of experience, we can assist with every aspect of your program.
If you would like to find out more about how we can help, please contact us here.