Season 2, Episode 10: The ROI of DE&I

Roberta Cucchiaro (00:31): Hi, and welcome to the 10th episode of the Transform Talent Podcast. This is Roberta Cucchiaro…

Dominika Gałusa (00:37): …and Dominika Gałusa. June is known as Pride Month, when individuals and organizations come together to celebrate the LGBTQ+ communities and champion inclusion at work and in society. The war for talent is intensifying, and embracing workforce diversity and inclusion is more than just the right thing to do. Plus, it keeps you ahead of the competition. But when most organizations focus their efforts on their full-time employees, they also need to be able to tap into the diverse contingent talent pool.

Roberta Cucchiaro (01:08): And that's something that unfortunately hasn't been a priority for organizations. So in today's episode, we will talk about diversity and inclusion in the contingent workforce as supply classification is no longer enough when it comes to satisfying DE&I objectives.

Dominika Gałusa (01:24): To discuss this, we have invited Consciously Unbiased, an expert in transformation and tackling bias in the workplace as well as TAPFIN who have partnering with them bringing and measuring diversity in contingent workforce programs.

Roberta Cucchiaro (01:36): So welcome to Ashish Kaushal, founder of Consciously Unbiased and Jennifer Torney, our North American VP for Client Engagement at TAPFIN. Hi how are you guys?

Ashish Kaushal (01:48): Good, how are you? Thank you for having us.

Jennifer Torney (01:50): Thanks for having us.

Roberta Cucchiaro (01:51): Cool, so we'll start with a question to both of you. So I want you to define the D-, the E- and the I- in DE&I and what each of these really mean in the workplace.

Ashish Kaushal (02:04): Jen, do you wanna start?

Jennifer Torney (02:04): Ah, I knew you'd say that!

Jennifer Torney (02:07): So, so the easy one is, so it's Diversity, Equity and Inclusion. You know, there's a lot of different ways that you can define all of those terms, but, you know, at a high level, diversity is exactly what it sounds like, having diversity in your workforce as we're talking about within the lens of, of workforce management. Equity is being treated fairly, hiring fairly and equally. And then inclusion truly creating an, an inclusive environments where everyone, from all of that, those diversity categories feel as though they are being treated fairly, can be themselves, can be self-expressed, can operate equally amongst all of their peers and colleagues. What did I miss, Ash?

Ashish Kaushal (02:51): I think it was great, actually. I can't believe I'm following you on this. I always say diversity is when your organization has so many different people in the culture that you stop noticing because it feels natural. And then I say inclusion is when diverse people feel empowered to share their input, but true belonging to me is when diverse people are not only encouraged to share, but their voices are also celebrated for a scenic perspective and acted upon. And I think the acted upon is a very big piece of this. And then the equity piece comes into play when we look at policies and opportunities. Are the marginalized groups given the same pathways to advancements, access to sponsorship and the ability to influence decision making process as, as everyone else does. And so I think that's a key part is that, I always say, it's great if you hire diverse candidates but if you can't hold on to them because they don't feel like they belong, then you're kind of spinning your wheels because I think it's important to have all the cultures together.

Dominika Gałusa (03:41): And before we deep dive into, you know, that other topics, I would like to hear some background stories. So Ashish what led you to found Consciously Unbiased? And, you know, what does it mean to be consciously unbiased?

Ashish Kaushal (03:53): So I'll give you the background, so HireTalent is the organization I've been running for about 20 years and when I built that company I wanted to make sure we had diversity of thoughts. I hired people intentionally from different socioeconomic, cultural, religious, sexual orientation backgrounds. And as an end result of it, people still really didn't relate to and so we organically created a very large diverse talent pool. And then about two and a half years ago, I was working on a Sunday and I was thinking, you know, all these clients are asking me to hire diverse talent, both from a contingent labor and even a full time site because their senior managements were pushing these initiatives, putting pressure on HR, procurement, the MSPs, the staffing firms to provide that talent.

But the ultimate decision maker was the hiring manager wasn't necessarily buying into the process. And so I started wondering why is that and so I took a step back and said, I started thinking about society and we're so polarized where the left and the right speed past each other and everyone feels like a victim. So, I'm like, that's where everyone's commonality, we're all victims, so let's start there. 'Cause a commonality actually brings us familiarity and understanding, right? And so, it wasn't a bad thing that we all felt this way, right because I think things are changing so quickly right now.

And so then I started thinking about training. We spend about $8 billion on training in corporate America on diversity and inclusion training. And a lot of it, it's not resonating because in our efforts to be inclusive, we've made training generic. Ultimately for you to impact the hiring manager's decision making process, you have to connect the mind and the heart and it affects them or somebody they love and then they're gonna make it a personal initiative. And so then, and I always felt like you're forced to go to this training because your manager makes you go, which is almost like your parents telling you to go. And you're not really gonna pay attention until your friends start doing the same things.

And then if you did pay attention, because you are actually interested in this, a lot of it was stemmed in guilt. And I think guilt is one strategy to motivate people but I don't think the majority of us respond to that. And so, I was like let's rethink the argument. Let's say biased, not all, let's say biases are based on life experiences, how you grew up, your family values, your community and part of it, it's about survival so let's own it. Let's be proud about it and now it's just a matter of how you apply it. And then if I teach you a new bias in training session you don't feel bad about it, you actually say, you know, I'm going to actually apply this bias in the right situations and that's where Consciously Unbiased was born.

And then Amy and I, Amy Doyle from TAPFIN… I had gone on to see her, to see her shortly after that, and we spent about eight hours brainstorming different ideas and how to automate things in the industry, things around diversity and inclusion. And she left me with some homework to do so I went back and did some research and then I was walking and it just hopped in my mind, you know, we could build a solution that scalable. I would say phase one of diversity and inclusion really happened in the '60s when the government set forth, policies around equaling the playing field for minorities in business. And so that's where diversity spend came from.

But now we're 30 years later and I think it's important that we take it to the next level and go down to the granular level and so we came up with a solution where literally it was over text message and like two days later she set up a call with Jen and Bill Peters and a bunch of other people, Dave McGonigle, and said all right let's do this. And the idea was to build a true MSP solution where you had diversity spend, diversity hiring and education of the managers, the education of the suppliers to really push diversity and move the needle in a meaningful way. And it was also tied to making sure we had ROI in diversity because I think companies earn business of making money and so doing the right thing is one component of it but it also has to show you that there's some strategic advantage. And I think we were a little bit ahead of the curve because I think society's kinda moved there at this point and showed us that this is the right way, right path or-

Jennifer Torney (07:28): Yeah and every time I hear the story it kind of gives me chills. I'm not kidding. Because I just think it's really neat and I think for the 12 years that I've worked here at TAPFIN, you know, there's a lot of value in, at minimum, supporting the diversity community to be able to drive more diversity spend within your program. And so we've always mentored and supported diverse suppliers. You know, we've taken it that step further so we can still provide diverse spend captured, but also really support it such that, you know, you can grow that area. But that was literally all we were able to and sort of focused on doing because for so many years that was the contingent labor focus that was all we could impact.

So when this happened it was like this radical shift and the market was so ready and Ash, I remember when we went to CWS in 2019, I think it was and I mean, I think you had already, you know, launched the brand, but we had come in at 2019 together, and it was, the conversations were fast and furious. Everybody was so excited to talk about what we could do and how we could do it differently and what would it look like if we did, you know, this, that and the other. And I've never seen so much excitement in contingent labor industry too, I mean, there's only so much you could do that's new. So it is really exciting to see us, really making an impact in a bigger way.

Roberta Cucchiaro (08:47): So talking about diversity and inclusion in the contingent workforce, so most organizations have focused on diversity and inclusion with their full time employees, but likely haven't given this topic serious thought when it comes to their contingent workforce. So, a question to both of you, why hasn't diversity and inclusion historically been a priority for contingent workforce programs?

Jennifer Torney (09:11): And this is actually a big part of the discussions that we have with clients when they do express the interest, is that frankly there's a big co-employment risk. There's a lot of exposure and there's fear around if I do this wrong... And honestly I think for a while too, I mean, if you even take it a step further, contingent labor wasn't always considered a part of your true labor strategy. I mean it's really only until it became 30% of your workforce did people go, "Oh wait, you know we have actually, let's think about our talent plan here." Because, you know, a lot of our talent is coming through non-traditional sources, or at minimum non-FTE sources and so, I think there was all of a sudden a little bit more of a focus around looking at that particular category differently.

But the truth of the matter is, is that there are a lot of areas of exposure, so even if an organization wants to do the right thing in driving better diversity practices within their contingent workforce, there's a lot of risk that you have to navigate. Doesn't mean you can't, just means you have to navigate it. And I think there's just a lot of unknown and then there's fear around the unknown. So I, I tend to see organizations sort of get paralyzed at that point where, what we're trying to do is help them navigate, you know, what are the gotchas so that you can actually get to that point B in a way that protects you, but also allows you too, and enables you to move the needle in this category. And Ash, I don't know if you have a different perspective, but that's been kind of from where I sit, the big issue.

Ashish Kaushal (10:38): Yeah, no, absolutely co-employment is definitely a huge risk. But I also think they really didn't think about it on some level, right. Because as Jen said their contingent labor workforce percentage is very low but if you look at today, there's three things that converge. The last 10 years though we've been training the hiring managers in corporate America as full time to embrace diversity and inclusion, so they're already trained on how to evaluate talent and push the needle forward on the full time side.

Those same managers are interviewing our contingent labor. And so if we just got the pipeline to go where we need it to, I guarantee that organically you're just gonna start seeing the hiring happening. And the second thing was procurement and D&I and HR kind of all ran in different silos. But if you think about strategically if my goal is to be 30% women in our organization, that's our ultimate goal, and we're ignoring 50% of our population, for example, like Google's workforce is 50% contingent labor at this point. Then the max they could ever get to holistically is 15% women in organization because I'm ignoring a whole subset of population. And if I want to change the culture, secondly I can't really change the culture if I'm ignoring half the people that are showing up at work.

And so I think those two things kind of converge and then the thing that makes me most excited is that just Corporate America themselves seem to be really pushing the moral fiber of society, or doing some really good things around that. So I think the fact that that's happening is sort of overcoming these barriers that we went through before that I think are now being thought of. And so, it's kind of funny because even from a managing, risk management standpoint, I think Jen and I had to slow them down a little bit because they wanted to move things so fast. But we're like wait there's going to be some repercussions around how you do this. You have to be very mindful of how we're rolling this out and I think that's the real, real value that, that the partnership we've brought is that we're gonna do this thoughtfully in a way that helps society but also helps manage risk on the corporate side.

Roberta Cucchiaro (12:29): As we talk about this, so what do you think are the key, or most frequent barriers to diversity and inclusion adoption in the contingent workforce and, and how do we overcome them?

Ashish Kaushal (12:38): I'd say the first thing is having a holistic strategy. So having your D&I groups work with your HR group and your procurement group to create the actual overall goal and have leadership buy-in to that. The second thing is partnering with the MSP and actually having them in the part of the process, the planning to get those goals and then let's figure out how to increase the pipeline. And some of that's through having the right suppliers in the mix, but it's also educating the managers within the organization, 'cause it's one thing for you to bring the talent, but if they're not willing to hire them, then it's kind of a mix bag and so.

And the third thing is making sure that the environment's inclusive and so I think some of that is building policies around that. So a quick example is that you wanted to bring more women in your organization, you have to have a little bit of flexibility, even if it's a time and material separate person to give them the ability to, to be a primary caregiver for their children and still not affect their productivity.

Jennifer Torney (13:35): Yeah, and you, you talk about barriers too, we kind of, we mentioned co-employment but just risk in general, but you know, when you think about just the nature of, of this particular category of worker. You know, they actually are employees of a supplier through the MSP. So, let's just say it's ABC Corporation. They have TAPFIN as their MSP. It might be Higher Talent from Ash's organization that actually is the true supplier and employer of record so they actually are the W2 of that particular suppliers. And so, if that's the case then, it does impact your ability. There's, there's very little control that you truly have over, you know, operating as though they are your employee. And yet you still have them on, likely, working with all of your employees on the full time side daily. So we think about, you know, things like exposure around what is your commitment to action on the data.

So like for example, if you say you want to grow your gender diversity, like Ash has been referencing, but you have no true commitment to action on that data, meaning if you wanna capture people's placements in a certain category. Um, if you're not gonna use that for improving that particular segment of, of hiring, then you failed. You know, you've actually exposed yourself to more risk and you've also not really done anything other than just capture some information. So we talk about data capture and trying to move the needle and there's a lot of exposure around that just in, from a co-employment perspective, but also just from a legal perspective across the board.

Dominika Gałusa (15:07): Talking about data, the importance of data. So, TAPFIN build the MSP 3.0 which has significantly extends the D&I ROI. So, Jennifer, first of all, I wanted to ask you what is TAPFIN's MSP 3.0? And what are the problems it is trying to solve?

Jennifer Torney (15:26): Yeah, so when you talk about MSP 3.0, that's a big concept and for us, it's a couple of things and diversity is one of them, but it's really like an omnichannel foundation for people to be able to source their talent through all different categories. But it's also a way that enables diversity and equity and inclusion strategies holistically like we've been talking about. So it's bigger than just capturing spend. It certainly allows for you to have your supplier diversity spend capture goals enabled. But it also allows for hiring manager training. It allows for employee training. It allows for conscious conversations that, I can let Ash talk a little bit about, that truly transform the way in which the organization's culture operates around inclusivity. It allows for full review of, you know, even how you're showing up in social media, if that's something that's of interest to you so that you truly are attracting the right talent.

And it's four things, like, kind of conceptually, it's, it's kind of four things. It's, you know, supporting the supply base that is, you know, enabling your workforce strategy. It's attracting the right talent, the talent that truly supports your diversity, equity and inclusion goals. It growing, so it's growing your talent in, in certain categories so if you are looking to grow your gender diversity or your ethnicity diversity within your organization, it's growing that. And then it's truly transforming the way that your culture operates so that you are a more inclusive culture. So for us, it's kind of, it's this holistic approach to driving talent in the right direction.

Dominika Gałusa (17:09): So, how can you actually measure diversity and inclusion and track this?

Jennifer Torney (17:15): We just had a conversation about this Ash. We can, we can-

Ashish Kaushal (17:16): Ifs, ands and buts-

Jennifer Torney (17:16): ... there's a lot of ifs, ands and buts.

Jennifer Torney (17:20): Yeah.

Ashish Kaushal (17:21): That's why you have to call us.

Jennifer Torney (17:23): Yes, exactly.

Ashish Kaushal (17:25): And I think there are, there are definitely some barriers and one of the other things I'm really excited working with you guys is that we're putting under a consortium of 50 or so procurement professionals, lawyers and lawyers and we're gonna write a public policy document, hopefully change the laws to make it a little easier to measure this. But in the short term our approach has been very intentful. And so I think if you think about diversity and there's sometimes hesitation, like, if I'm the white male, like, where do I fit in this whole scenario. And the reality is diversity is not exclusive to anybody. And so, and I think the thing that organizations have done in the past is that they've measured the micro level and what that ends up happening is, let's say all your, you wanna push the women minorities to target for example, right. And all your women are actually in the marketing group and then all your engineers are Indian and then all your finance people might be Asian.

You essentially created three companies, countries inside your company and you're not getting the leverage of diversity. And so, the idea is if you measure the micro level then a white male is of minority in, in the engineering group. And so if we start doing that, we're really trying to get to diversity of though which actually increases competitive advantage for organizations since that's one of the unique things that we're doing within this partnership.

Roberta Cucchiaro (18:34): You've also mentioned the diversity of thought, as a key, something organizations should, should keep in mind. Question is around how do you, how can you measure it? Or what would be your advice on that from your side for organizations?

Ashish Kaushal (18:48): Um, I mean, doing baby steps, I think the first thing is to make sure you're tracking the type of talent that actually is getting hired. And then number two is look at the people who didn't get hired and if the, if for example it's a silver medalist that somebody who was a second choice. If you see they weren't hired, but they were minority, then you can kind of push past that idea of that there's not talent out there. Because I think there's this idea that there's no diverse talent out there. I wanna hire and I think it is there, we just, we're just not looking at it properly. So I think those two are the first two steps.

And the second, the third thing is when you measuring, make sure the data's secure and that only the people who should be seeing it are authorized to see it. Because I think that can be very dangerous if you're not doing correctly-

Jennifer Torney (19:27): For a defined period of time too, I mean, they always say, you know, it's like, you know, use the data and then move on.

Ashish Kaushal (19:33): The leadership needs to make sure D&I is a priority for their business and they evangelize it. And then the second thing is once you build a plan, if you don't measure it doesn't happen. And so I think you have to build metrics around it and manage your D&I goals like you would a business unit. I always say if I ever start a new business and I got 2% year over year growth, I'd probably get fired. And so if you're looking, set realistic goals in your diversity goals. Make sure it's multi-year but also hold people accountable, and I think that's a big part of it.

And then, the last thing is, like in the US specifically is being nice is not a co-employment risk, and so I think if you invite your workers to be more engaged, I think more ROI out of it. So I think it's important to set sort of policies that make sense that are risk management policies but they don't tread to the point where you demotivate people from working and staying. I think if you do those three things you'll end the war on talent. Because I think ultimately the unemployment rates are gonna go back down to 4%. And what's gonna win is the people who feel like they're being treated really well and they're being part of a mission. So I think those are the three or four things.

Roberta Cucchiaro (20:40): For you Jennifer, what are the top three benefits of including diversity in an end to end MSP?

Jennifer Torney (20:47): Sure, so, I mean, the big thing is, as we're talking about talent. I mean, ultimately you're gonna see better talent outcomes and right now, especially Ash at the outset of our conversation was talking about this virtual work world that we live in. I mean, it, it's actually becoming harder and harder to find talent because you're competing with people across the globe now. I mean, it's no longer just competing in your market. You're now competing with everyone and so, it is harder to find talent and it is critical that we look bigger. That we look at non-traditional sources. That we look at thinking differently about how we're hiring. You know, so for us it's a talent strategy. So you get better talent outcomes because ultimately you're casting a broader net.

Another one would be, you know, the whole concept of diversity of thought, that drives better business results, period, full stop. I mean, so if you have people from different backgrounds and people from different ways of potentially, um, thinking and being more creative and they feel enabled to speak their mind and be creative together, creativity drives better outcomes, period. And so, you know, that part is really exciting to me and we've always subscribed to that at ManpowerGroup, you know, that is so critical and I think you can only get better outcomes by having more and more diversity.

And then the final thing would be and Ash touched on this too, is better retention. You know, we talk about how difficult it is to get talent. You know, the figure is kind of generic, but it, you know, typically costs about 25% more to try and go and hire somebody else than to just retain the people you've got. And so, you know, it is so important to keep the talent that you have and to keep them happy and to keep them engaged and to keep them feeling like this is the place that they want to be because you're gonna get better work out of those people too. I mean, at the end of the day it helps everything. So for me it's so much bigger than just doing the right thing, which is ultimately the underscore, it's really about all of the different aspects that can drive ROI for your organization.

Roberta Cucchiaro (22:48): Yeah, and I love the idea of what you mentioned: creativity. You don't go very far away if everyone thinks the same.

Jennifer Torney (22:57): That's right.

Ashish Kaushal (22:57): Absolutely. And if you think about, I mean you asked about diversity of thought. If you think about just even what we did together. We had people from all different walks of life, show up to build this diversity solution. And what it's ultimately done is literally lifted the consciousness of the staffing industry and now everyone is sort of trying to push through this. And so I think it shows an example of how you can change the world but also make it profitable.

DE&I Myth Busting / Roberta Cucchiaro (23:19): For the last bit we're doing a bit of a fire round. So it's the first time we do it on the podcast. So very excited. So we want to bust some myths. We are gonna tell you a myth each and then we want some really nice and quick answers on, you know, why is that wrong. Why can we bust it. So we can get started. So the first one for you Ashish, diversity and inclusion are the same things?

Ashish Kaushal (23:49): Diversity is a number, inclusion is your culture. 

Roberta Cucchiaro (23:51): Perfect start.

Dominika Gałusa (23:53): So Jennifer, diversity and inclusion is an HR issue.

Jennifer Torney (23:57): Absolutely not, and I actually just what I just said, it's a business issue.

Roberta Cucchiaro (24:02): Ashish, inclusion is just about gender and race.

Ashish Kaushal (24:05): No, I think humans are multi-dimensional and there are many differences and commonalities that might not be apparent at first glance. When we talk about inclusion it means for everyone and encompasses age, ability, disability, narrow diversity, sexual orientation, gender, parental status, veterans status, formerly incarcerated and mindset. So that's just a few things to give you an example.

Jennifer Torney (24:26): Mindset, I love that.

Dominika Gałusa (24:28): So Jennifer, DE&I is about hiring less qualified candidates and it could limit my talent pool.

Jennifer Torney (24:34): It's the opposite, it expands your talent pool.

Roberta Cucchiaro (24:37): And Ash, is the concept of diversity excludes white men.

Ashish Kaushal (24:42): We need all of us at the table and that of course includes white men. White men aren't one homogenous group, but they have various backgrounds, experiences, mindsets, and that's what the workforce needs. It's, I think, we have to invite everybody to the party and just expand the skills sets and talents that are out there.

Dominika Gałusa (24:57): So, Jennifer, diversity is about meeting a quota. There is such a thing as enough diversity.

Jennifer Torney (25:03): Yeah, that one's not good. I mean the reality is, like, so, diversity spend might be a quota, okay. But diversity is, I mean, even though, I mean it is really about capturing multiple backgrounds in your workforce. It's still a way of being. It's a way of thought. It's a way of operating. There's no such thing as too much, that doesn't even compute for me. I think the more you can focus on it, the better outcomes you'll have.

Roberta Cucchiaro (25:31): Absolutely. And a last one to both of you, give me one reason why DE&I are not just buzzwords.

Ashish Kaushal (25:40): I would say your company won't be able to thrive if you ignore DE&I. According to September 2020 Citibank, Citi Group report, racism costs the US economy 16 trillion over 20 years. And mental health in the workplace as well, which is also another diversity piece we didn't talk about. It costs organizations about $1 trillion in productivity because they're not addressing diversity and inclusion.

Roberta Cucchiaro (26:02): And you, Jennifer?

Jennifer Torney (26:04): I don't know how I follow that, but I would just say, you know, for me I think, diversity, equity and inclusion is a way of being and I think it's our new way of being and thank goodness that we got to this place and, where people are focused on it. I think it will just continue to become a part of who we are in the world, hopefully.

Dominika Gałusa (26:23): I love this round. I think we should do it next time, Roberta.

Roberta Cucchiaro (26:26): Yeah, yeah it's fun.

Dominika Gałusa (26:28): Yeah it was fun. So before saying goodbye, I just wanted to summarize our conversation. So DE&I stands for diversity, equity and inclusion. We also heard very interesting stats about $8 billion as being spent for DE&I training in the US, which is a lot. There are also a couple of things for overcoming most frequent barriers for DE&I and it is: 

holistic strategy, partnering with MSP and having the right suppliers. And then top benefits of including diversity in end to end MSP are: looking at the bigger talent pool, diversity of thought is driving better business results and better retention.

Roberta Cucchiaro (27:14): Yeah, and I would also add, and I actually, I really liked how Ashish mentioned quite a lot the, the importance of education. And educating the teams, the management, and, it starts with learning, you know, knowing also how to, how to be with your team members and, then eventually how to, how to recruit. So I think that was a very big, uh, take away from me.

Ashish Kaushal (27:36): I did wanna add one more thought, um, 'cause people always asking like what can we do as MSPs and staffing agencies to sort of push this forward. And I always say we actually have a special place we can, because we're at the front line of talent. And so, we can influence diversity and inclusion in a way that I don't think any organization kind of the scale we can do it, you know. And so, I think number one is find your own niche and own it. If you copy, it won't resonate respectively. And I think that's what we tend to do in the staffing industry specifically. So, like, this diversity MSP solution that we came up with caption, resonates because the passion comes out, right and copying types of diversity solutions won't help you, help your agency because if it's not a core passion it won't resonate.

So, I think as a solution for the industry, to be part of the solution I think it's important that we connect personally to whatever cause we're trying to push and that will become contagious. And so I'd say let's not make it a crowded field of copycats, but an ecosystem of change that collaborates or raise the consciousness of society. And that's what the power we have as MSPs and agencies.

Roberta Cucchiaro (28:34): Yeah, but that's perfect. The perfect conclusion. Well, I love this episode. It was really interesting and I did learn a lot so hopefully our listeners did the same. So thank you so much for joining us today on the 10th episode of The Transform Talent Podcast. We hope you enjoyed as much as we did. And to all our listeners don't forget to subscribe and leave us a review in your favorite podcast listening app. See you on the next episode and bye for now. Bye, bye!

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