Diversity Recruitment and Hiring Guide for Small Businesses

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A diverse group of co-workers meet at a conference table.

One of American society’s highest ideals is a commitment to diversity and allegiance to the idea that our nation represents a true melting pot of racial, ethnic and cultural backgrounds. Statistical evidence certainly supports America’s increasing diversity. For example, statistics compiled by Catalyst from the U.S. Census Bureau and U.S. Bureau of Labor Statistics show that women now make up nearly half of the workforce (47%), that the Latino share of the total population has risen by 6% since 2000 and that people of color currently make up 40% of the total U.S. population.

One of the challenges small business owners face is ensuring that their workforces mirror this cultural diversity, with well-rounded teams that represent a range of viewpoints and backgrounds. The best way for a small business to achieve this goal is by putting the right diversity recruitment and hiring strategies in place.

Why Workforce Diversity Matters

Before considering specific diversity recruitment and hiring strategies, stepping back and considering why diversity is so valuable to small business owners may be helpful.

Cultural Competence

One benefit that a diverse workforce delivers is cultural competence: the ability to interact with people from across a broad spectrum of cultural and ethnic backgrounds without being stymied by linguistic or cultural barriers.

A more diverse and inclusive team will naturally have a greater aptitude for communicating cross-culturally, which can have a positive impact when developing marketing messaging, trying to sell across cultural boundaries or simply interacting with customers from different backgrounds.

Empowering Marginalized Groups

Pursuing a diverse workforce is a practical way to provide autonomy and authority to groups that have historically been marginalized or left out of key conversations regarding business and commerce.

In other words, recruiting folks across cultural lines helps provide them a seat at the table, and it creates a more even playing field within a business and more broadly within an industry.

Closing the Talent Gap

Small business owners naturally want to hire and recruit the most talented, capable and versatile employees they can. This is much easier to do when drawing from the widest possible talent pool.

Broadening hiring and recruitment efforts to include people of different racial identities, to seek women as well as men and even to recruit people from other countries is a good way to take full advantage of all outstanding applicants, rather than restricting recruitment to a narrower population.

Diversity and Small Business

Some other reasons why diversity recruitment and hiring practices are beneficial to small businesses include the following:

  • Bringing in employees with different backgrounds and skill sets can ultimately increase cross-functionality and productivity across a team.
  • Diversity helps generate new ideas, creative angles and lines of thought that a more homogeneous team wouldn’t produce.
  • A commitment to diversity and inclusion may help foster a stronger reputation for a business, solidifying it as a socially conscious place to work.

The Benefits of Workplace Diversity

Small businesses that pursue diversity recruitment and hiring strategies may reap a number of benefits; in fact, diversity can be a useful consideration when seeking to optimize a team’s productivity and overall effectiveness.

Improved Conflict Resolution

One thing that makes diversity so beneficial is that a plurality of perspectives can lead to a smoother conflict resolution process. Diversity of thought and experience may lead to creative resolutions and breakthroughs that significantly improve how team members function and collaborate.

Enhanced Business Reputation

Another reason to pursue diversity recruitment and hiring policies is that doing so may engender goodwill among customers and clients, throughout the community and in the industry as a whole. A business can cultivate a reputation as being one of the more progressive, inclusive or forward-thinking companies in a field, committed to social justice and willing to embody those values through hiring practices.

Profitability and Growth

Ample evidence supports the notion that workplace diversity can improve the bottom line, helping to increase profitability and growth. A 2020 report from McKinsey shows that companies committed to gender diversity in the executive suite have a 25% higher chance of maintaining above-average profitability within their industry. The same study shows that companies committed to racial and ethnic inclusion dramatically outperform those that aren’t. “The most diverse companies are now more likely than ever to outperform less diverse peers on profitability,” the report summarizes.

Ability to Conduct International Business

By assembling a more well-rounded team through diverse hiring practices, companies can increase their reach in doing business internationally. Selling, collaborating or marketing across cultural lines is much easier when someone in-house understands international clients and can facilitate business interactions without cultural missteps.

How to Incorporate Diversity into a Recruitment Strategy

Clearly, pursuing diversity recruitment and hiring efforts is beneficial for small businesses owners. The question is, how can it be done? Here are a few pointers for making diversity a priority when filling open positions.

Assemble a Diverse Hiring Committee

One way to ensure that diversity practices are honored in hiring decisions is to choose people to make those decisions who are themselves representatives of diverse groups and backgrounds. Establish a hiring committee that helps develop job descriptions, review applications and recommend top contenders to the hiring manager. Be sure this group is inclusive in terms of gender, race and more.

Protect Against Bias

Make an effort to minimize bias during the resume and pre-interview stages of recruitment. One way to do this is to screen and filter resumes in terms of skill set but remain “blind” to applicant names and other personal information. Also, determine interview questions in advance and ask each applicant for the same information.

Connect with the Right Organizations

It’s important to connect with organizations that work to promote diversity recruitment and hiring. Some examples include diversity job fairs and diversity recruitment partners. These can be valuable resources for tapping into a more diverse pool of applicants and for eliminating any unwitting biases in company hiring practices.

Promote Diversity Through Outreach

Seeking diverse applicants is one thing; proving that a company has a genuine commitment to diversity and inclusion is something else. One way to instill this kind of goodwill is to align with social causes that promote diversity, including local charities or nonprofit groups.

Use Diversity Recruitment Strategies

A company can ensure a commitment to diversity recruitment and hiring in a number of other ways. For example, invest in diversity training, including confirmation bias training, for anyone involved in the interview process. Also consider working with diversity consultants to identify opportunities for improvement in hiring policies.

Further Reading

To learn more about diversity recruitment and hiring, consider these resources.

Workplace Diversity Resources for Small Businesses

For small companies looking to incorporate diversity hiring practices into their recruitment processes, a number of tools and resources may help.

Tools to Ensure Diversity in Recruitment

With the right hiring and recruitment software, human resources leaders can automate processes associated with finding and screening applicants. In doing so, they can eliminate their own subconscious biases from the process. G2 provides a helpful roundup of diversity software solutions.

Connections with Diversity Outreach Groups

Small businesses may also benefit from facilitating relationships with diversity outreach groups that can help them tap into broader talent pools. Diversity and bilingual job fairs can be especially useful.

National Agencies

The Small Business Association (SBA) provides a number of resources for hiring managers looking to honor diversity and ensure compliance with civil rights laws. Diversity hiring resources may also be available at the state level; North Carolina provides an excellent example.

Additional Resources

For further information, consider these links:

Make Diversity a Top Priority

Diversity isn’t just a buzzword. It’s an ideal that can yield significant business benefits in team cohesion as well as overall profitability. For small businesses in particular, using every available resource to embed diversity into the hiring and recruitment processes is crucial for future success.