How HR Can Tackle Diversity Using the Rooney Rule
With President Obama’s endorsement of the Rooney Rule, workforce diversity is center stage. Here are a few diversity metrics you should be monitoring.
Recent events have called attention to the state of workplace diversity at organizations in all industries. As leaders search for ways to improve D&I across the employee lifecycle, the Rooney Rule is more important than ever. Earlier this year, the NFL approved several changes to the rule. These changes include a requirement for all 32 teams to establish a minority coaching fellowship program and an expansion of the rule across the league for executive positions.
This isn’t the first time the Rooney Rule has influenced the D&I landscape. In August 2015, the need for more workforce diversity was spotlighted in a big way when President Obama issued a call to action to technology companies, encouraging them to hire more women and minorities by implementing the Rooney Rule.
During the White House’s first-ever Demo Day, over a dozen major technology companies committed to ensuring more diverse recruitment and hiring practices, including Facebook, Amazon, Microsoft and Box.
What is the Rooney Rule?
The Rooney Rule requires “at least one woman and one underrepresented minority [to] be considered in the slate of candidates for either every open position or every open senior position (the details vary from company to company).”
Originally implemented by the National Football League (NFL), and named after Pittsburgh Steelers chairman Dan Rooney, the original Rooney Rule sought to increase the opportunities for minorities to hold NFL head coaching positions. The results were impressive – minority head coaching hires in the NFL increased from 6% to 22% in 2006 – and as the White House strives to show, the implications of the rule can be far-reaching.
Many companies are also setting lofty goals as a result of the call to action:
In the next two years, Mozilla has committed to doubling the percentage of Black and Latinx representation of its 1,000-person U.S. staff
Google will roll out training for its employees that explores systemic racism and racial consciousness in 2021
Restaurant Brands International committed to ensuring that at least 50% of all final round candidates for corporate office positions are diverse
Why does the Rooney Rule matter to HR?
With the war for talent at an all-time high, more inclusive and diverse hiring practices are key to a company’s success. Defining and measuring diversity and inclusion is critical, and the Rooney Rule is a good example of an organization prioritizing both.
Diversity describes variations in characteristics among a group of people. Some characteristics include gender, race, and age. Inclusion refers to the way that we embrace those differences and create a supportive culture in the workplace.
Promoting diversity in the workplace requires organizations to bring people of various backgrounds together as part of the organization. Inclusion is the act of making that workplace a welcoming environment. One is not possible without the other.
Benefits of diversity in the workplace
New 2020 research from McKinsey has shown time and time again that organizations with diverse and inclusive workforces win:
Top-quartile companies outperformed those in the fourth one by 36 percent in profitability, slightly up from 33 percent in 2017 and 35 percent in 2014
Companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile—up from 21 percent in 2017 and 15 percent in 2014
Companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30, and in turn these companies were more likely to outperform those with even fewer women executives, or none at all.
The need to hire diversely goes beyond dollars and cents. As baby boomers head into retirement, companies will face a huge shortage of skilled workers to replace them. Consequences of this can range from reduced competitiveness and productivity to increased employee turnover to higher compensation costs. By waiting too long to make diversity a priority, companies run the risk of having a small talent pool to source from later on and rushing through the hiring process in order to fill critical roles.
Diversity metrics that support Rooney Rule initiatives
As the world continues to address systematic racism and inequality, workforce diversity is center stage. Keeping an eye on your talent demographics is a helpful way to monitor your pipeline and evaluate the success of your recruitment practices. Here are a few demographic metrics you should be monitoring:
Who’s getting interviewed?
Who’s moving through each stage?
Who’s doing the interviewing?
Who’s getting hired?
1. Who’s getting interviewed?
To ensure a diverse group is getting into your slate, you need to start by making sure the applications coming through fit your diversity and inclusion requirements.
Metric to watch: Diversity of interviewed candidates
Keep track of the demographic details of the people at the interview stage of your hiring process and then, use this data to show whether or not one ethnically diverse person or one female is part of this pool. If you’re seeing low numbers, this may be a sign that you need to re-evaluate your sourcing channels, and/ or screening tools. Think about using new channels or revamping your screening approach to bring in more candidates with a more diverse background
2. Who’s moving through each stage?
Continuously monitoring candidates progress can help you see whether diversity increases or decreases as they move through the pipeline.
Metrics to watch: Ethnic diversity by hiring stage / Female diversity by hiring stage
Use this metric to track the movement from the application stage to screening and down through interviewing and into offers accepted. This will make it clear where in your hiring process you lose your diverse candidates. A drop in diversity at different stages requires a different response. For example, if diverse candidates are rejecting offers of employment you need to understand why and make a change.
This visualization shows the number of female applicants at different stages within the hiring funnel. *Fictional data
3. Who’s doing the interviewing?
Research shows that there is reduced bias when the diversity of a job interviewer is matched to the candidate. In fact, the 2020 Inclusion Index by Diversity Best Practices, revealed that of the 98 organizations surveyed (a list that includes Johnson & Johnson, Accenture, New York Life, and more), 75% require the panel of interviewers to be diverse.
Metrics to watch: Diverse interviewer vs non-diverse interviewer
Use your people analytics to monitor how matching the gender or ethnicity, for example, of the interviewer to a candidate has an impact on your hiring process. Are more, less, or the same number of diverse candidates moving through the funnel? Make adjustments as necessary.
4. Who’s getting hired?
Keep an eye on how many women and underrepresented minorities are getting hired compared to your existing workforce and the industry standard.
Metrics to watch: New hires vs. existing workforce / New hires vs. industry benchmark
This data will show whether you’re meeting your organization’s diversity goals and keeping in line with the rest of your industry. If the numbers are low, this is a good indication that you need to review your recruitment process to determine where there’s room for improvement.
Alternatively, if your hiring process is doing well and landing a diverse set of new employees, but you see no change in overall organizational diversity, then you need to review the retention of your diverse employees – not just the hiring part.
Remember: It’s not enough to say ‘diversity went up by 10%.’ When improving workforce diversity is one of your business objectives, it’s essential to keep track of hiring success rates by diversity group. For example, if the goal was to hire more veterans, you need to be able to show how many were successfully hired. Workforce analytics easily separates your diverse candidates by group and shows you how successful you were in each category.
Make diversity a priority throughout your employee lifecycle
Keep in mind that inclusivity doesn’t end once the job has been filled. On a regular basis, it’s good to check on the health of your workforce diversity. It is common for organizations to invest a lot of energy into hiring a diverse group of employees only to find they are losing them as fast as they are hiring them – leading to no overall change in organizational diversity.
A powerful people analytics solution provides the analytics and planning capabilities that make diverse recruitment and retention much easier to oversee. From beginning to end, insights that are both easy to access and analyze will enable HR and managers to better comply with the desire for more workforce diversity.
And while the Rooney Rule isn’t yet the standard, the commitment of numerous high profile technology companies to diversifying their applicant pool and workforces has certainly given it precedence. If businesses want to succeed now and in the future, being proactive with diverse hiring is a crucial way to achieve this.
On the Outsmart blog, we write about workforce-related topics like what makes a good manager, how to reduce employee turnover, and employee burnout. We also report on trending topics like the Great Resignation and preparing for a recession, and advise on HR best practices like how to present headcount data to your CEO, metrics every CHRO should track, and connecting people data to business data. But if you really want to know the bread and butter of Visier, read our post about the benefits of people analytics.
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