Asked by Sarah F
While it may be true that many factors contribute to the employee mix within any company, the very fact that your question targets annual reports as the information repository implies that the analysis would be focused on mid-sized and/or large companies.
The point that an annual report focuses on a point in time may be valid but most annual reports provide charts and graphs that illustrate the company’s performance over time: Year-over-year comparisons are commonplace. These reports measure performance in many areas that are definitively more external to the company than hiring practices.
While the rationale used to define the reporting criteria would need to be stated clearly, given the changing demographic within America – and the rest of the world – any stockholder should be interested in learning whether or not the company is utilizing its hiring practices and strategies to create a company that reflects the customer environment.
In America, that environment is increasingly more diverse especially given the increased access to global markets enjoyed by even the smallest companies. I managed a division of a company that enjoyed a workforce where 50% of our employees were minority.
Since the closest companion division’s minority mix was only 15%, the only conclusion that I could draw was that the failure to hire more minorities was a conscious decision on the part of the management teams.
I should point out that my own division, which was initially comprised of two smaller units, reflected a similarly disproportionate mix at the start. The transition and accompanying 600% growth in the size of the workforce, occurred over 18 months.
What I learned through this process is that diversity has to be measured, rewarded and protected just like any other business asset. This not only includes the hiring of racial/ethnic minorities but persons with disabilities as well.
That will never happen as long as managers are not required to report on the impact of their decision making regarding the equal provision of employment and advancement opportunities — at all levels of the organization. This reality has lead to the federal government to require such reporting from its contractors for decades, thereby supporting and fostering a healthy and diverse contractor base.
In my view, there could only be one reason for a company to shy away from the reporting of such statistics: A realization that such an analysis — presenting the realities of their hiring practices in measurable numbers and percentages — would empower their workforce and others to either rejoice or revolt.
However, if we can require a company to report on the amount of pollution and waste that it contributes to our air, land and streams, we can certainly compel a company to report on its contribution to ensuring a diverse workforce. What do you think?