AWS Cloud Enterprise Strategy Blog

Addressing the Digital Workforce Gap through Diversity and Inclusion

A frequent topic in our conversations with enterprise leaders is just how difficult it is to find people with the right skills for the digital age. We often suggest that their go-to-strategy should be to grow talent internally, developing the skills of people they already employ (an earlier blog post covers this subject as well). But when enterprises do look outside, particularly when they try to grow by adding new employees, I wonder if they are always taking advantage of all the skills that are out there. My experiences as a CIO have taught me that cultivating diversity can be a powerful strategy for the digital age.

In another blog post I suggested that—perhaps a surprise to some—there are many things commercial organizations can learn from government IT. In my time as a government CIO, I learned that diversity and inclusion (D&I) offer a tremendous opportunity for addressing the skills gap. I discovered that, with some deliberate focus, we could cast a wide net to find the skills we needed, and that innovation was also enhanced by building diverse and inclusive teams.

In the federal government, D&I were core values, taken very seriously, and constantly re-assessed. As a member of the Senior Executive Service, I was measured and incentivized on my role in fostering a diverse workplace. The government invested in training me…which was fortunate because I knew little about the subject when I began my role there. Though I am still no expert, I’d like to share here some of what I learned.

This post will focus on just a few of the reasons why you might want to foster a culture of diversity and inclusion. In particular, I want to emphasize that D&I can:

  • help you find employees with the skills you need, even in a tight labor market
  • increase your ability to innovate, both in finding and selecting good ideas
  • enable you to develop a workplace where millennials and post-millennials want to work

First, in a competitive hiring environment where many organizations are looking for the limited set of candidates with digital skills, you want to take a proactive approach to looking everywhere such candidates can be found. You might think you are already doing so, but it is surprisingly easy to limit your field of vision.

Secondly, as many studies have shown, diverse and inclusive organizational cultures do much better at innovation—and innovation, as we know, is the centerpiece of digital transformations. According to a Bersin/Deloitte talent management study, the companies highest on their diversity and inclusion maturity scale—“companies that look at leadership and inclusion as a hallmark of their talent strategy”—are 1.8 times more likely to be change-ready and 1.7 times more likely to be innovation leaders in their markets.[1] According to a Harvard Business Reviewarticle, “new research provides compelling evidence that diversity unlocks innovation and drives market growth.” Its authors report that companies having what they call “2-D diversity” out-innovate and out-perform others, being 45% more likely to grow their market share and 70% more likely to capture new markets.[2]

Thirdly, diversity and inclusion are important to millennials—who will make up 75% of the workforce by 2025 and will continue to drive your transformation into the future. Interestingly, another study by Deloitte found that there seems to be a large difference between how millennials view diversity and how their predecessor generations did (Baby Boomers and GenX-ers). While earlier generations think of diversity as a matter of fairness, millennials view it as a matter of teamwork, of assembling a mix of unique experiences, identities, ideas, and opinions—and a way to achieve business results.[3] According to the Deloitte study, “83 percent of millennials are actively engaged when they believe their organization fosters an inclusive culture, compared to only 60 percent of millennials who are actively engaged when their organization does not.”[4]

The millennial workforce also strongly associates inclusivity with innovation: 74% of millennials say that their organization fosters innovation when it has an inclusive culture, as opposed to only 10% who find their organizations innovative when it lacks one.[5]

Research from McKinsey shows a connection between diversity and greater profitability and value creation. They found, for example, that companies in the top quartile for ethnic diversity at the executive level are 33% more likely to have above-average profitability than companies in the bottom quartile.[6]

In short, D&I can give your enterprise a competitive advantage.

My Education in Diversity and Inclusion

When I joined the government as a member of the Senior Executive Service I discovered that one of the seven performance criteria I would be evaluated on was how well I fostered workplace diversity. I was honest with myself: I had no idea how to do so. I was also honest with my boss. He gave me some coaching and feedback and put me in touch with our agency head of D&I, who, in addition to mentoring and answering questions, also arranged training for me.

I learned that there are three key elements to fostering a diverse and inclusive workplace:

  1. Make sure it is a comfortable, appealing workplace for the groups you want to include (all groups, in other words). Make it clear to all groups that you welcome them.
  2. Cast a wide net, making people aware of your opportunity even if they do not frequent the places you usually advertise your openings.
  3. Once you have a diverse workforce, take advantage of that diversity to stimulate innovation, avoid groupthink, test ideas from multiple perspectives, and retain the employees by developing a culture where they continue to feel valued.

I am talking here about diversity in its broadest sense, in the “millennial” sense of cognitive diversity—getting people with a variety of backgrounds and points of view onto your teams, reaching out broadly to find people with the right skills. But a good way to start is to look at your current workforce and assess where your best opportunities are; that is, to ask yourself: What groups are under-represented today?

A few populations to consider: women (generally under-represented in technology, as we know), racial minorities, immigrant populations, people with disabilities, veterans, even people who have served time in prison (who can find it very difficult to find employment).

Are you creating a workplace environment that is friendly to those groups?

Perhaps you can ask people already working for you whether the environment is comfortable, and how you could make it more so. This too was a regular part of our government approach. Often, we are not aware of things we are doing that work against this objective. One enlightening example I received in my training: do “the guys” go out for drinks on Friday evenings after work? Perhaps some employees are feeling excluded: those who don’t drink or for whom Fridays are a holy day, for example, or even employees who just don’t like to socialize in this way. I am not necessarily suggesting that you ask your employees to stop that behavior, but I do mean to point out that it is one of many things that might be making particular groups feel uncomfortable. You will need to think about how to make those other groups feel welcome as well.

Another example from my experience: I fielded a complaint from my employees’ union that a deaf employee had been offended by her manager’s behavior. One of the issues was that the manager had been speaking directly with her interpreter, rather than to the employee herself. I realized that I could easily have made the same mistake and that other employees might have as well, so I arranged to have training offered to all of us on how we could make the environment better for employees with hearing disabilities. For someone with good hearing, it is very difficult to imagine what life might be like without it. In training we learned about social norms in the deaf community and ways that deaf people express themselves.

Are you casting a wide net?

An important step in fostering diversity is to “cast a wide net” when hiring (sorry for this uncomfortable but common metaphor, which I think is due for a change); that is, to make sure that a broad range of applicants will learn about your job opening and feel like they are welcome to apply. You might be surprised at how much you limit your audience by where you advertise your positions or how you word your job descriptions. In the government, we deliberately recruited at minority-focused job fairs, at universities with diverse student populations, and through organizations that placed people with disabilities, for example.

Have you checked the wording of your job announcements to see if they assume a particular gender or otherwise exclude potential applicants? Are there requirements for your positions that exclude certain groups (people with disabilities, for example, or single parents) that don’t really need to be requirements?

Another interesting area: in government IT we were required by Section 508 of the Rehabilitation Act to make sure all of our IT systems were accessible to people with disabilities. We took this responsibility very seriously, and had dedicated and trained “Section 508 testers,” who checked to make sure every system complied with accessibility requirements. They did a fine job. But—strangely—none of these testers was blind. They were testing compliance but not really planning for usability, which really would have required testers who were forced by their disabilities to use the accessibility features.

To what extent do you make accommodations for people with disabilities? Do you already encourage teleworking? Have you thought about the possibilities it opens for hiring employees who would otherwise have difficulty working in an office?

Are You Making the Most of Diverse Teams?

Congratulations—you now have a diverse and welcoming environment. Does everyone on the team feel comfortable contributing? Are you framing tasks for the team in a way that will allow them to be innovative, question assumptions, and react in ways that take advantage of their unique backgrounds and points of view? When an employee or team has a good idea, is there a way for it to become reality?

The Bottom Line

A digital transformation is all about empowering cross-functional teams to innovate. It is one thing to be cross-functional, but research shows that diverse, inclusive teams with cognitive diversity are even more likely to innovate with beneficial outcomes for the organization.

There are many reasons for fostering diversity and inclusion in your organization. But for those organizations looking to transform digitally, it is of paramount importance. It is a matter of innovation, accessing important skill sets, creating competitive advantage—and ultimately, of bottom-line results.

In a way, the challenge of D&I is exactly the challenge of the digital age: creating a dynamic, innovative, experimental, and open culture and encouraging deeper interactions with customers and within the enterprise.

Mark

@schwartz_cio
A Seat at the Table: IT Leadership in the Age of Agility
The Art of Business Value
War and Peace and IT: Business Leadership, Technology, and Success in the Digital Age

[1] Josh Bersin, “Why Diversity and Inclusion Has Become a Business Priority,” 12/7/2015, https://joshbersin.com/2015/12/why-diversity-and-inclusion-will-be-a-top-priority-for-2016/

[2] Sylvia Ann Hewlett, Melinda Marshall, Laura Sherbin, “How Diversity Can Drive Innovation,” Harvard Business Review, https://hbr.org/2013/12/how-diversity-can-drive-innovation

[3] Deloitte, “The Radical Transformation of Diversity and Inclusion: The Millennial Influence,” https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-the-radical-transformation-of-diversity-and-inclusion-the-millennial-influence.pdf. According to the Deloitte study, “when asked about the business impact of diversity, millennials are 71 percent more likely to focus on teamwork compared with 28 percent of non-millennials who are more likely to focus on fairness of opportunity.”

[4] Ibid.

[5] Ibid

Mark Schwartz

Mark Schwartz

Mark Schwartz is an Enterprise Strategist at Amazon Web Services and the author of The Art of Business Value and A Seat at the Table: IT Leadership in the Age of Agility. Before joining AWS he was the CIO of US Citizenship and Immigration Service (part of the Department of Homeland Security), CIO of Intrax, and CEO of Auctiva. He has an MBA from Wharton, a BS in Computer Science from Yale, and an MA in Philosophy from Yale.