With a pandemic, a recession, and protests over racial injustice, the need for more equity and equality is amplified now more than ever. Diversity and inclusion (D&I) initiatives have been brewing for a long time in the traditional employee space. Lately, it has been picking up momentum as a talking point in the contingent workforce space, especially among contingent workforce program leads under HR.
D&I matters not just for employees but for non-employees as well. Focusing on D&I should encompass your entire workforce, becoming embedded as a large part of your company’s culture. Your external workers hold a significant opportunity for you to take a giant step forward when it comes to promoting diversity, advancing inclusion, and encouraging belonging.
How Diversity and Inclusion Affect Your Organization
Diversity, inclusion, equity, and belonging are not just industry buzzwords. Studies show that a company that leads the way in D&I often excels above competitors. For example, McKinsey & Company and Harvard Business Review find that racially, ethnically, gender and ability diverse companies have superior outcomes such as:
- 36% better financial performance
- 22% better investment success
- 87% better decision-making
- 40% higher revenue
And according to the latest SIA research,, companies considered leaders in D&I efforts around their extended workforce have a competitive advantage in:
- Integration of external and traditional workforce program (not to be confused with co-employment)
- Higher ROI for contingent labor
- Ability to retain talent
Yet, for real and lasting change to happen, the people who are in charge (at all levels) need to believe not only that it’s the right thing to do but that it’s doable as well. Knowing what to do and having confidence that D&I programs for the total workforce are suitable for the company can then mobilize to change its culture
Your diversity and inclusion program doesn’t need to be a vast undertaking out of the gate. You can start small in one region and replicate where legally permitted, engage other business units, work with HR’s existing D&I, and start collecting data.
By starting small, you can learn what works in bite-sized pieces, experiment, then roll it out across the company.
“Let's experiment and try to gather some of this data. And then from there [ask]: Is this replicable in other regions? Is this something we can ask? Is this legal to ask in other regions? Or is it on a country-by-country basis? So right now we're the test pilot here in the U.S., and then whatever is successful, we'll try to mirror in other regions, obviously staying within the law of what we can and cannot, collect,” - Jennifer Coe, Global Senior Program Manager, Contingent Workforce at Uber.
Executive sponsorship is critical
It’s imperative to the success of your diversity and inclusion program to build on the foundation that HR has created for employees. With chronic talent shortages and SIA surveys of buyers finding that median large businesses engage one-fifth of their workforce on a contingent basis, few organizations can afford to ignore contingent workers in D&I.
Although there’s an underlying concern of crossing the line into co-employment, the single most crucial issue cited in the SIA D&I survey as a barrier to include D&I in contingent workforce programs is having clear senior-level executive sponsorship to capture and track diversity-specific data for non-employees. “While executive sponsorship, D&I data, and infrastructure may appear as distinct factors, it is important to keep in mind that they are interrelated, with executive sponsorship serving as the key that unlocks the others. Clear signals from the C-Suite provide the corporate will to capture the necessary data and overcome the obstacles that may block access,” the SIA report says.
Drive value from your systems
Capturing, storing, and making D&I data easily reportable is necessary for both employees and external workers. Several actions may help your organization improve diversity and inclusion among your non-employees, such as:
- Ensuring most contingent workers are captured in systems to enable understanding of all the ways external talent is utilized
- Establishing an exact code of conduct regarding how external workers are treated
- Providing D&I training and education to managers responsible for hiring and coaching
Working hand-in-hand with your Human Resource Information System (HRIS) is crucial to tap into the entire workforce population to ensure a consistent experience among employees and external workers. Visibility and insight into your real talent will help you make changes to your whole D&I program as it evolves. Consider the type of complete view of extended workforce diversity you want to achieve:
- Insight into diversity, equity, and inclusion dashboards for external workers
- Breakouts of races, ethnicities, genders, ages, religions, disabilities, and sexual orientations
- View of differences in education, personalities, skill sets, experiences, and knowledge bases
- Comparison of diversity metrics between employees and non-employee worker populations
- Tracking suppliers performance against your diverse business objectives
Tools such as vendor management systems (VMS) that capture external workforce data are often disconnected from HR and have other weaknesses that don’t make them an ideal solution.
For example, they don’t provide visibility into your total talent workforce. This makes them inadequate to manage a total global workforce talent pool.
It gets complicated even when working with items you would typically think are easy tasks, such as preferred names. For example, in Latin America, people can have multiple names; it’s not just first name and last name, but two first names, three last names. Or this situation regarding preferred terms that Jennifer Coe describes: “...we've had a problem where we have a trans person trying to change their name. And you would think that'd be super easy, but unfortunately, our VMS can't support a preferred name functionality. So when you get into something like that, we typically require the suppliers to put in legal names because that's what flows down to invoices, and that's what's tracked in SOCs. And there are all of these compliance components that you need to have around a legal name.
A lot of these types of D&I functionality are simply not available in most VMS solutions. There’s no native functionality and no configurability. And building out custom-defined fields is a long process because some areas are not reportable, and others are not downloadable. So, when considering the technology to support your D&I initiatives for the extended workforce, it’s essential to understand your system’s capabilities. Does it have the infrastructure that will allow this type of data capture in a secure, private, and worker-centric way?
Align and collaborate across HR and Procurement
You don’t want to start a non-employee D&I program in a silo. HR and Procurement should work together so that all contingent workers have a consistent experience yet also designate clear ownership of the program. The SIA study found that often HR and Procurement follow competing agendas, resulting in disjointed and even contradictory approaches. As such, the study advocates the creation of clear ownership across groups to enable corporate D&I infrastructure. Successful programs have clear ownership that is consistent across organizations and geographies.
Consider Your Global Footprint
When you start collecting raw data as a global organization, you have to remember that various regions have their own rules about what is legal and what’s not. It’s important to understand that not everything is U.S.-centric. Your program can have a vast global footprint, and what might work in the U.S. is likely not to work in Sub-Saharan Africa. Contingent workforce program managers with experience building successful D&I programs recommend taking what’s good, seeing what can be translated, and then working within the specific country or region’s parameters.
“Globalization drives a lot of different things, but diversity means different things to different people, and so we can't just apply U.S. diversity metrics across the board. But you can look at it and say, Okay, there are some general categories, people of color, indigenous populations, veterans, disabled populations, and maybe use those as the overarching categories. And then apply and understand what you can gather in terms of data and get that starting point for your regional program,” - Jennifer Coe, Global Senior Program Manager, Contingent Workforce at Uber
Inclusion is Important
It’s essential to think about diversity and have the initiative to include external workers’ experiences in your workforce planning. It’s a bit tricky when it comes to the extended workforce since it’s often problematic for enterprises to communicate directly with their workers. Often, suppliers are tasked with sending surveys and gathering information.
However, systems such as Utmost Extended Workforce System (EWS) obtain worker data via a secure opt-in process. Since workers own their profiles, they can access and update details easily. The worker can choose to share their gender, education, skills, certification, etc., information with a company.
This means that you can easily send surveys to workers and suppliers to capture additional diversity and inclusion information with consent. Then, in turn, use this to assess your non-employee talent for D&I objectives. For example, you might want to send surveys to:
- Gauge how extended workers experience the workplace
- Measure feelings of belonging, access to mentorship, and advancement opportunities, incidents of harassment or micro-aggressions, and more qualitatively
- Benchmark and track worker satisfaction
Don’t Forget About Your Suppliers
Interestingly, organizations are pushing for closer relationships with narrower groups of suppliers. This enables a more in-depth partnership in which both sides are committed to fostering a long-term approach for recruiting diverse candidates. Enterprises focusing on building or adapting D&I programs for their external workforce prioritize this deep, long-term supplier relationship as it results in better and more comprehensive diversity data. From the supplier’s perspective, it provides the ability to invest in recruitment that will deliver a more diverse applicant pool.
An effective diversity and inclusion program is a long-term business goal that won’t happen overnight. However, making a consistent investment and a concerted effort will reap benefits over time. As multiple forms of research show, companies advancing D&I in their contingent workforce program outperform companies that don’t. Creating a culture where people of all backgrounds thrive will be a key to your organization’s success.