We discussed the business and social impacts of diverse workforce populations in Part 1 of our series and it’s clear there are many drivers for inclusiveness in talent management practices. The industry continues to grasp for clarity in the practice of defining the return on investment (ROI) of inclusion practices. This is a key practice since after all, the ROI is the bottom line driver for most organizations.
Let’s take a closer look at performance measurement practices used to measure the contingent portion of the workforce. At the individual contributor level, performance evaluations are typically pretty straight forward: the contingent worker is replaced, completes the temporary engagement, or is converted to a full time internal employee of the organization. Performance evaluations of contingent workers look very different from performance evaluations of full time employees. They are not subject to regular performance reviews which is done to avoid co-employment territory, however operationally speaking, the measurement of the individual contribution (or loss) of each contingent worker becomes impossible.
When we look at one of the largest suppliers of contingent talent, the staffing partner, performance metrics are standardized and ROI becomes clearer: quarterly scorecards provide metrics on performance against key performance indicators and rank performance against competitors. One of the greatest benefits of these metrics is that organizational spend is easily defined as “diversity spend” based on the staffing partners certification.
So back to the challenge of circularity with determining the ROI of a diverse workforce. Current metrics provide insight only into contingent spend associated with the staffing partner, they do not provide insight into the value of the inclusion practice or the contribution of the diverse contingent worker.
An effort to create more robust metrics and translate an inclusive culture into business practices begins in the following ways:
• Standardize the organization’s definition of diversity – traditional definitions of diversity based on gender and ethnic background have evolved to include orientation, parental status, and socioeconomic background.
• Welcome new relationships – it’s likely that many of the organization’s business partners will evolve and accommodate the changing climate. It’s also likely that some business partners may no longer be effective. Create a plan to optimize (exit) partnerships that no longer fit and to welcome in new partners on a trial period.
• Set performance targets – define and measure performance against organizational goals, then tweak partnerships as needed.
• Require diversity fill rates of staffing partners – request that partners move beyond diversity classification of their organization to help the organization define true ROI on inclusion practices. Staffing partners should provide metrics demonstrating their commitment to creating a diverse contingent workforce in their recruitment and placement practices.
• Provide 24 hour lead time on search to diversity staffing partners based on their diversity fill rate – reward and incent the behaviors you are trying to attract.
• Create diverse micro and macro communities that are inclusive of the contingent workforce population – doing so creates a space that capture the contribution of diverse thought.
In Part 3 of our series, we’ll explore the role of the buying organization (client) in developing and managing a diverse and inclusion contingent program.
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This series is co-authored by Leslie Marsh and Kanita Harris Brown.
Leslie Marsh is the Procurement Strategist with HireTalent. Kanita Harris Brown is a Supply Chain Professional at K.H.Brown Solutions @ khbrownsolutions.com