Why is talent diversity important to your workforce composition and is it the same as supplier diversity? This post will focus on the significant benefits of fielding diversity talent and help clear up confusion about the difference between diversity talent and the frequently mistaken benefits of supplier diversity.
First, let us quickly define the tenets of supplier diversity so readers can understand the distinction between supplier and talent diversity strategies. Supplier diversity strategies are intended to make concerted efforts to engage supplier partners that are minority and woman-owned organizations. The two predominate reasons to pursue supplier diversity are social responsibility and bottom line earnings benefits.
From a social responsibility standpoint, engaging diversity suppliers demonstrates to the market that an organization observes inclusive supply chain practices that work toward more equitable and socially conscious business practices. This helps an organization attract business from a broader range of potential customers – from both diverse communities of customers as well as those consumers who place a premium on doing business with socially responsible entities.
From a bottom-line earnings standpoint, there are significant benefits to engaging diversity suppliers not least of which are the tax incentives that companies are eligible to receive if they meet regulatory thresholds for diversity. Beyond these incentives, supplier diversity programs add economic value to the communities where the organization does business. Diversity suppliers uplift communities through job creation and increased wages within diversity communities which are typically underrepresented. Add to this the increased tax revenue driven within diversity communities and the practice delivers value to local economies and communities.
But this post instead is focused on extolling the benefits of Talent Diversity in driving maximum benefits from a contingent workforce management program. Talent diversity refers to strategies to field a contingent workforce that is ethnically and culturally diverse. That is, to build your workforce with people of multiple races, genders, cultures and backgrounds.
Among the most significant benefits of fielding diverse talent is the all-important return on investment into labor. McKinsey research suggests that businesses with more culturally diverse workforces are 33% more likely to drive profits that beat the average for their industry. However, it isn’t all about the financial benefits. There are numerous operational benefits that derive from a diverse workforce.
Hiring talent from immigrant communities, a regular source of diversity talent, regularly yields a more motivated workforce. Immigrants and newcomers to the US economy often have greater incentive than their native-born counterparts. Many immigrants are forced to leave their career positions behind in their native countries and diversity hiring provides them opportunities to reclaim the professional identities they left behind when they emigrated.
A corollary to this dynamic, industry research suggests that immigrant and other diversity talent assets are more inclined to remain engaged in their positions. The Fiscal Policy Institute reveals employers hiring refugees and other immigrants report lower rates of turnover compared to native workers.
Moreover, diverse workforces help attract new sources of business and can even open entirely untapped markets to the hiring organization. Global employees come with language skills and cultural perspectives that support the attraction of new opportunities and business in emerging and foreign economies and markets.
Other qualitative benefits abound with regard to diverse talent resources. By definition, diversity communities demonstrate innovative ethics, adaptability and resilience that reflects the differences inherent to their divergent life experiences.
For insight and guidance on fielding more diversity talent within your contingent workforce, reach out to nextSource experts today.