Most employers unprepared for changing workforce

The makeup of the workforce is changing and companies will need to adapt if they want to continue attracting and retaining top talent, according to a new study by Paradigm. Researchers found that the U.S. population is becoming increasingly ethnically/racially diverse, while generational diversity is expanding and more people identify as neurodivergent and LGBTQ+ than ever before. 

The data also show that most organizations are not prepared to handle this change as they struggle to hire racially/ethnically diverse employees, develop talent from underrepresented backgrounds and create positive workplace experiences across demographic groups. 

According to the study, 83% of companies saw more racially and ethnically diverse candidates during the hiring process than were eventually hired. Within these companies, a white candidate was 1.7 times more likely to be hired than candidates from other racial/ethnic backgrounds. 

Meanwhile, referred candidates are 4.5 times more likely to get hired, yet candidates of color represent less than 50% of the referred applicant pool and more than 60% of the non-referred pool. 

When it comes to leadership, the study found that white people and men are overrepresented in leadership compared to their representation as employees overall. At the executive level, 72% of leaders are white, compared to just 17% who are Asian and 9% who are Black. 

According to the study, one notable factor contributing to the lack of diversity in leadership is the availability of roles. The study suggests that white people and men have been better represented in the workforce for a longer period of time, and unless an organization adds more leadership roles or established employees leave, there is not much room for diversification. 

Finally, when it comes to the employee experience, many communities feel that they are not engaged and do not belong. The study found that LGBTQ+ employees are 35 % less likely to feel that decisions are fair and 12% less likely to feel a sense of psychological safety compared to non-LGBTA+ employees. 

Additionally, employees of color reported that they are 60% less likely to feel that decisions are fair compared to white employees. 

In order to improve these gaps in the workforce, the study says that, “even companies that may not be as motivated by the moral or business cases for diversity, equity and inclusion should be motivated by a future inability to attract and retain top talent.”