There’s no question that having a diverse workforce is beneficial for companies. Historically, diverse companies have consistently outperformed their industry peers and found success in attracting fresh perspectives and quality talent.

However, the road to becoming a diverse company can be tricky. There is a lot of debate around diversity targets and quotas. In this blog you will learn the difference between diversity quotas, targets, and goals, and what each of those terms actually means.

  1. Terminology

  2. Let’s start understanding what diversity quotas, targets and goals really mean.

    • Diversity quotas
    • – quotas are established by a governing body and are usually time-bound and have measurable objectives. Quotas are not common in the United States, but Italy, for example, requires 33% of each gender on state-owned boards.

    • Diversity targets
    • – diversity targets are also measurable and time-bound, but instead of being established by a governing body, targets are established by individual organizations. It may sound like something along the lines of “A commitment to increase gender representation by 20% in the next 5 years.”

    • Diversity goals
    • – Unlike quotas and targets, goals don’t have to be measurable and time-bound. Goals are more broad, aspirational statements made by companies in order to push forward their values. An example would be, “We strive to hire teams that represent the diverse client base we serve”

  3. Diversity Quotas
  4. In the United States there is no requirement to hire a specific number of ethnic minorities, women, people over age 50, or differently-abled individuals, however, there are civil rights laws in place to punish employers from declining to hire members of those groups solely because of race or gender or physical characteristics.

    To avoid expensive audits from the EEOC, US corporations typically try to hire a workforce that looks like their area; if the general population in town is 30% African American, then showing that your staff is 29% African American is a good way to shrink the time EEOC spends with your HR team, and a defense against lawsuits.

    If a large employer cannot find qualified candidates in various races, genders, etc, they document efforts to try, to help fend off lengthy audits and lawsuits. This was the case in the 1990s when few African Americans were entering accounting firms.

    The large firms would document the number of people of color graduating with that major, proving it was hard to find candidates meeting their requirements, as well as documenting their scholarships donated to attract people of color to the field.

    If there is a justifiable reason to discriminate, employers have been successful in defending their practices. An example would be Hooters Restaurant hiring only young women for servers.

  5. Diversity Targets
  6. Unlike quotas, diversity targets can be company-specific, continuously adjusted, and monitored by the company to ensure they remain appropriate and feasible for the environment in which it operates. Additionally, targets set internally have a higher adoption rate by employees than targets determined by an external force.

    A voluntary 25% target for women’s board membership by 2015, established for the FTSE 100 by the Davies Report and supported by amendments to the UK Corporate Governance Code, led to an increase in the share of women holding directorship roles to 26.1%, exceeding the target within the specified time frame.

    Target-driven change may take longer than mandatory quotas, but it’s clear that diverse talent really does exist ‘out there’. Setting achievable targets may be just the incentive HR and recruitment teams need to bring that talent on board, e.g. by pro-actively advertising roles in wider places to reach a more diverse pool of potential candidates.

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  7. Diversity Goals
  8. A diversity goal is the equivalent of an aspirational statement, e.g. ‘to have a culture where everyone can feel their voice is heard’. Organizations may be reluctant to set goals and targets for fear of failure to meet them. Linking specific diversity goals to overarching organizational goals helps to embed diversity and inclusion into company culture.

Organizations that take account of diversity and inclusion in every decision they make and in everything they do enjoy increased productivity and profit; maximize and retain the best talent; nurture creativity, innovation and flexibility and foster committed, motivated staff who feel fairly treated and respected.

If you want to know more about diversity and inclusion, visit our website Nota Inclusion