We are pleased to share this blog from Everest Group analysts, Varun Malik, Practice Director, and Akash Shukla, Senior Analyst.
Increasing globalization and competition have made Diversity, Equity, and Inclusion (DE&I) a key focus for most enterprises in recent years. The massive business transformation driven by COVID-19 forced organizations to think about DE&I even more holistically given that women and ethnic minorities were among the workforce segments most impacted by the pandemic.
Post-pandemic, organizations are expected to be more socially responsible, and enterprises recognize that having diverse backgrounds and cultures in the workforce not only promotes different thoughts but also enhances business performance. Improving DE&I emerged as one of the top three priorities for 32 percent of respondents to an Everest Group survey of 100-plus senior HR and procurement executives across organizations of all sizes and geographies on enterprise priorities in the next 12-18 months.
Rapid changes in the talent market also have posed significant challenges for organizations to find the right talent with the right skill sets. The survey found 69% of respondents desire access to high-quality talent while increasing agility and flexibility was a priority for half of the executives polled.
Adopting a Total Talent Acquisition (TTA) approach can help organizations increase overall workforce diversity, find the right talent with the right skill sets, and become more agile. TTA takes a holistic approach and incorporates a company’s talent strategy with its overall business strategy to advance consistency in hiring every type of worker, from traditional permanent employees to contingent temporary workers.
Incorporating Direct Sourcing to Foster DE&I in TTA
Technological challenges and siloed organizational structures have slowed TTA implementation. Companies also frequently struggle to determine where to begin the TTA process. Direct sourcing, which allows enterprises to use permanent recruitment-related practices even for a contingent workforce, is rightfully emerging as the starting point of TTA. Historically, the HR department handles permanent recruitment while the procurement department is responsible for hiring contingent talent. Focusing on DE&I has been less common in the contingent workforce because it has been typically regarded as a commodity for enterprises to procure.
Direct sourcing enables companies to bypass third-party recruitment/staffing agencies and create a common talent pool (a database of qualified prospective applicants) for all workforce categories. This is changing perceptions of contingent workers and Everest Group's survey found that 67% of enterprises expect direct sourcing to improve diversity in sourcing.
Benefits of Leveraging Direct Sourcing to Enhance Diversity in TTA
DE&I-focused direct sourcing and intentional talent pooling not only allow enterprises to address talent shortages but also to hire individuals from diverse backgrounds. Direct sourcing can enhance DE&I in the following important ways:
- Diverse sourcing and diverse talent pool
Finding diverse candidates to interview is one of the primary problems businesses confront when seeking to increase workforce diversity. This issue is further amplified for the contingent workforce as enterprises typically procure contingent workers through third-party providers.
In direct sourcing, the DE&I initiative can start from the top of the recruitment funnel. This gives enterprises a diverse talent pool to draw from for both permanent and contingent positions, furthering TTA efforts. - Inclusive employer/talent brand and job posts
As the scope and skill sets of contingent workers expand, businesses need to align their employer branding to the overall workforce accordingly. Brands that have a positive reputation for being inclusive employers have greater potential to attract diverse
candidates into their talent pool. Organizations that extend their DEI branding to job postings using inclusive language will have a better chance of attracting job seekers who connect with their organization. - Leveraging technology and advance analytics in the hiring process
Despite having diverse talent pools, companies often fail to achieve workforce diversity because of human bias in the screening and shortlisting process. Technology platforms such as VMS and direct sourcing platforms can support diversity hiring by masking specific personal information, delivering Artificial Intelligence (AI)-based candidate recommendations, automating communication to engage with curated talent, etc.
Data collected throughout the direct-sourcing process such as self-identification information can enhance diversity, equity, and inclusion. Organizations also can leverage analytics and reporting to track talent demographics, diversity hiring performance, and benchmarking. Furthermore, analytics can help organizations identify diversity pipeline leak in the hiring process.
Implications/Considerations for Enterprises
Simply put, DE&I hiring creates equal opportunities for candidates of diverse sexual orientation, gender, age, race, abilities, and ethnicities to participate in the hiring process. But it takes time. Companies must first examine their current state and then create goals to improve DE&I hiring.
Appointing a chief diversity or talent acquisition officer can create the alignment required among stakeholders responsible for recruiting permanent and contingent talent, and brand marketing.
Hiring contingent workforces quickly without a DE&I lens has shifted since the early post-pandemic days. Today, contingent hiring has become strategic to organizations – making it imperative for employers to think about DE&I more holistically and implement TTA practices.
About the Authors:
Author 1: Varun Malik ("Varun Malik is a Practice Director on Everest Group’s Business Process Services team, managing contingent staffing and candidate attraction and engagement platforms (CRM) research across both published and custom decision support offerings. He assists clients on topics related to value creation through inorganic and organic routes throughout the talent acquisition landscape. Prior to joining Everest Group, Varun worked as a strategy consultant with KPMG Deal Advisory. He holds a bachelor’s degree in engineering from Bharti Vidyapeeth’s College of Engineering, Delhi, and a master’s degree in business administration from Narsee Monjee Institute of Management Studies (NMIMS), Mumbai.")
Author 2: Akash Shukla ("Akash Shukla is a Senior Analyst on Everest Group’s Business Process Services team. His primary focus areas are Contingent Workforce Management (CWM) and Managed Service Provider (MSP) research across published and custom decision support offerings. He assists clients by providing strategic insights, market trends, and competitive landscapes in areas like Diversity, Equity & Inclusion (DE&I), employer branding, talent acquisition technology, and other areas of talent acquisition. He holds a bachelor's degree in engineering from Vellore Institute of Technology and a master's degree in business administration from Narsee Monjee Institute of Management Studies (NMIMS), Mumbai")
