Diversity in Contract Hires: An Overlooked Opportunity for Lasting Change?

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Like many professional recruiters, we at Corps Team have seen a dramatic rise in hiring in recent months. Yet, as the economic impact of the pandemic lingers, we’re also observing a trend of employers hedging risk by hiring contractors rather than direct-hire placements.

The latest job numbers confirm what we’re seeing. “Professional and business services added 208,000 jobs in October, with temporary help services (+109,000) accounting for about half of the gain,” according to the US Bureau of Labor Statistics. These waves of temporary workers (who may work only a few weeks or months) and contract workers (who tend to stay between six months and two years) can have a lasting impact on the demographics of an organization.

A second trend we’re seeing, likely a result of this summer’s protests for racial justice, is an increase in employers focusing on diverse hires. Significantly though, while employers are prioritizing diverse candidates for their direct hires, the same is not true for contract hiring. This lack of demand for diversity  in contract hiring is a missed opportunity with potentially enduring impact.

In analyzing our firm’s historic data, we found that typically 20-25 percent of our contract hires go on to direct hire roles with their employers. Similarly, academic research by Lawrence Katz of Harvard University and the late Alan Krueger of Princeton University found that contract workers comprise 6.9 – 9.6 percent of all US workers. That’s 10.5-15 million workers.

Because so many professionals follow this path from contractor to employee, and because contractors may actually stay as long as many permanent hires within an organization, failing to factor diversity into contract hiring is a lost opportunity for those seeking real change.

What can recruiters do to help employers embed diversity into their contract hiring? These five practices can help:

1. Write Diversity Into Your Recruiting Goals

Before launching the search, take time to gather context and set objectives that can help an employer achieve their long-term diversity goals. Provide employers with industry-specific diversity metrics and record the organization’s baseline diversity statistics and goals, particularly at the management level.

Build specific key performance indicators (KPIs) from there, considering the potential impact should contract hires prove their value as future employees. Determine your recruiting goal, how you will know when you attain it, and how you will measure success.

For instance, you may want to hire more women for accounting and finance roles. Determine how many women in the organization currently work in these roles. Then, set a goal for how many more women you want to place in these positions. Fulfilling an order for an employer then becomes something more: real progress toward achieving the organization’s goals for workplace inclusivity.

2. Embrace Flexible and Remote Work

Encourage employers to embrace the rise in remote-work practices. According to a 2019 Forbes article, flexible and remote work arrangements were already gaining preference among workers before the pandemic:

Often employers believe remote working will spark a decline in productivity, yet research has proved the opposite. According to CIPHR, those working at home rate their productivity as 7.7 out of 10, while those in an open-plan office score their productivity at 6.5 out of 10. As well as this, our own data [at PowWowNow] found that more than half of office workers surveyed in 2017 said working away from their office would improve their motivation levels.

Increasing your workplace flexibility can help open the door to more diverse talent pools, including those with mobility limits or disabilities; homebound caregivers; and younger workers, whose preference for flexible workplaces is well recorded.

3. Enhance Your Sourcing

Promote diversity in the methods you use to advertise job openings. Use language geared toward the demographics you seek in your job ads. Explain why your company is targeting specific candidates and why those candidates would enjoy working for you. Focus your sourcing efforts on the places where your target candidates congregate, such as online and in-person groups dedicated to a demographic you seek to engage.

Use blind screening  to review resumes and conduct preliminary interviews. Program your applicant tracking system to filter candidates based on specific skills and experiences. Once you have created a short list, you can send candidates preliminary questions through a recruitment platform that conceals personal information. This significantly reduces the influence of unconscious bias in deciding which candidates advance in the interview process.

4. Share Progress

Once you have defined your KPIs, diligently monitor progress in your diversity recruiting strategy. Common KPIs include changes in talent pipeline diversity and diversity representation in senior leadership, management, and the organization overall. Report your progress toward these KPIs each month or quarter along with your business results. Provide metrics for leadership to use in evaluating overall workplace diversity.

5. Keep Listening

Listening is a powerful form of research. Ask diverse contractors what their hiring experiences have been like. Find out what they were looking for in a role and employer, as well as the factors that drove them to choose to continue or discontinue work for a company. Discuss how interviewers can encourage candidates to share their work experiences. Ask how staff may be unintentionally disrespectful or offensive to diverse candidates. Find out what made the candidate want to work for your company. Use this information to improve both your contract hiring process and the diversity and inclusion performance of the employers you serve.

Allison O’Kelly is CEO and founder of Corps Team.

By Allison O'Kelly