Google’s 2017 diversity report, released last week, expands on the information included in previous reports to cover the retention and attrition of underrepresented talent, as well as an intersectional analysis of race and gender at Google. Overall diversity figures were little changed from last year’s report and showed limited progress since 2014, when Google first began making this data public. Men make up 69.1 percent of the tech giant’s workforce, while its racial makeup is 53.1 percent white, 36.3 percent Asian, 2.5 percent black, 3.6 percent Hispanic or Latinx, and 4.2 percent multiracial. In 2014, the Googler community was 61.3 percent white, 30 percent Asian, 1.9 percent black, 2.9 percent Hispanic/Latinx, and 3.6 percent multiracial.
The company has made some progress in improving the gender balance of its leadership over the past four years, with its the percentage of women in leadership globally rising from 20.8 to 25.5 percent. Google’s US leadership is 66.9 percent white, 26.3 percent Asian, 2 percent black, 1.8 percent Latinx, 0.4 percent Native American, and 2.7 percent of more than one race. Black and Latinx representation in leadership have improved slightly since 2014, while the report highlights that 5.4 percent of new leadership hires in 2017 were black.
The attrition data included in this report touches on an issue that tech companies struggling with diversity and inclusion have discovered to be of critical importance: not just recruiting diverse candidates but also retaining those employees for the long term. Based on an index of US attrition, Google’s report shows that attrition rates are highest among black and Latinx employees, at 127 and 115 compared to an overall index of 100. “Black Googler attrition rates, while improving in recent years, have offset some of our hiring gains,” Google acknowledges, “which has led to smaller increases in representation than we would have seen otherwise.” On a global index, attrition was slightly higher for men than for women, however, at 103 compared to 94.
Effective onboarding often makes the difference between a successful hire and an early quit. To better understand the causes of attrition among recently hired employees, Microsoft created a survey that was given to new employees after their first week and again after 90 days to find out about their experiences and first impressions of the company. The tech giant’s workplace analytics team also compared anonymous calendar and email metadata with engagement survey data from around 3,000 new hires.
At the Harvard Business Review last week, Dawn Klinghoffer, Candice Young, and Xue Liu revealed what this investigation uncovered and how it shaped Microsoft’s decisions about how to improve new hires’ experience. One thing the survey revealed was that having a working computer and access to the building, email, and intranet on day one was important for new hires to be productive and engaged from the very beginning, making an important first impression that colored their overall experience. Their more complex analysis produced another insight: New employees who had a one-on-one meeting with their manager in week one were more successful than those who didn’t:
First, they tended to have a 12% larger internal network and double network centrality (the influence that people in an employee’s network have) within 90 days. This is important because employees who grow their internal network feel that they belong and may stay at the company longer. For example, employees who engage internally intend to stay at a rate that’s 8% higher on our intent-to-stay measure. They also report a stronger sense of belonging on their team while maintaining their authentic self.
The investment bank Morgan Stanley recently announced a set of new policies for its junior associates, offering higher base pay and a faster track to promotion, while also underscoring its work-life balance policies, Preeti Varathan reported at Quartz last week:
According to its memo, Morgan Stanley is raising base pay for associates in investment banking and capital markets by 20% to 25%. It is also speeding up its promotion timeline for high-performing analysts—the entry-level position below associate—from three years to two. The memo also reiterated the bank’s current vacation and hours policies: two mandatory one-week vacations every year and limited staffing on Fridays and weekends.
Wall Street has long had a reputation for debilitating hours, consecutive all-nighters, and frequent weekend work. But even the most competitive firms are now grappling with a new generation’s insistence on rapid promotions and better work-life balance. “The ability to recruit, develop, and retain top talent by offering attractive career opportunities is a key priority,” the memo noted.
Indeed, at a time when the labor market is tight and employers in all industries are having to compete harder for talent, it’s unsurprising to see another large employer make investments in its most junior employees. The financial sector, however, has also been grappling for several years now with a particularly difficult employer brand problem. More than ever before, prospective employees now question whether the lucrative rewards of investment banking’s traditional high-stress, high-pay model are worth the costs to their quality of life.
In the wake of the Tax Cuts and Jobs Act passed by the US Congress in December, which slashed the corporate tax rate from 35 percent to 21 percent, some large employers announced that they were raising pay, expanding benefits, or (most commonly) issuing one-time bonuses for their employees with the billions of dollars in savings they would gain from the tax reform package. Critics of these tax cut bonuses say they are a cynical attempt to curry favor with the Trump administration and mask the fact that investors are reaping the lion’s share of the rewards. Most of the windfall is being passed on to shareholders through dividends and stock buybacks, as the Wall Street Journal noted in a recent article noting the impact of the tax cuts on corporate earnings in the first quarter.
Some companies are investing their tax cuts in in employees in a different way. The aerospace manufacturer Boeing, for example, announced in December that it was investing $300 million of its tax savings in employee programs, one third of which would go toward learning and development (its total savings from the tax cuts are expected to be around $400 million a year, the Seattle Times reported in January).
In fact, many organizations are putting part of their tax savings toward learning: Our pulse survey on tax reform at CEB, now Gartner, found that among organizations allotting part of their tax savings to HR, 39 percent were investing in employee training, development, and education—the second most common target for these allotments after pay and benefits. (CEB Total Rewards Leadership Council members can see the full results of that survey here.)
McDonald’s announced last week that it was expanding its education benefits program for employees to both increase the value of the benefit and widen the pool of employees who are eligible for it, USA Today reported on Thursday:
Previously, employees had to be on the job for nine months before having a shot at tuition assistance, but that’s been dropped to 90 days. Plus, the weekly shift minimum was 20 hours and now is 15 hours. The changes will make close to 400,000 U.S. employees eligible, the company said. Now, staffers can get as much as $2,500 a year from the Archways to Opportunity program for a trade school, a community college or a four-year university — up from $700. For managers, the figure jumps from $1,050 per year to $3,000.
Some employees’ family members will also now be eligible for assistance. The changes, which McDonald’s attributed to a tight labor market and the savings it accrued from the recent cut in the corporate tax rate, are funded by a $150 million commitment the fast-food giant is making to the program over the coming five years. Since launching in 2015, the company says, Archways to Opportunity has distributed over $21 million in assistance to around 24,000 people.
The program, which is open to employees of both McDonald’s franchises and company-owned restaurants, is offered in partnership with the online education company Cengage Learning. Amanda Eisenberg goes into more detail about how the expanded program will work at Employee Benefit News:
The high cost and limited availability of child care is one of the major burdens facing working families today, particularly in the US, but also in the UK and other countries: Parents are spending a sizable chunk of their incomes on child care, making career decisions based on these costs, and sacrificing earnings by pursuing flexible schedules or part-time work in order to make more time to spend with their children.
Unable to afford full-time child care, many mothers (and it’s almost always mothers) are forced to work part-time or drop out of the workforce entirely to take care of their children, especially when they have more than one. Because responsibility for child care still falls predominantly on women, this factor contributes heavily to the gender pay gap.
In the US, a historically tight labor market is driving employers to reckon with this problem, now that they are feeling it more acutely than ever, Jennifer Levitz reports at the Wall Street Journal. Levitz hears from employers around the country that are increasingly concerned about retaining female employees amid a dearth of child care options and have begun to look for ways to expand these options for their employees, including lobbying state governments for legislative solutions. Some coworking spaces have also experimented with child care programs as a benefit for their members.
The gold standard of child care benefits are on-site facilities, such as Patagonia famously offers at its Ventura, California headquarters and its Reno, Nevada distribution center. While these services are expensive to implement, Patagonia maintains that this investment nearly pays for itself between tax incentives, better retention, and lower turnover. From an employee perspective, on-site daycare is the family benefit most preferred by employees all over the globe, according to our research at CEB, now Gartner. This is particularly true in the US, where employees are twice as likely as in other markets to say they would prefer on-site daycare over a 5 percent increase in pay.
The US is growing more ethnically and racially diverse. By 2040, non-white people are expected to make up a majority of the population. The best organizations are getting ahead of this trend by creating a workplace environment that supports diversity. These efforts are leading to better results for employees and the organization: Companies in the top quartile for racial and ethnic diversity have 35 percent higher financial returns than the national industry average, according to our research at CEB, now Gartner.
To increase racial and ethnic diversity throughout the organization and leadership team—and to realize the benefits of a diverse workforce—organizations must attract diverse employees and remove barriers to their career advancement. Taking these five steps can help you meet both of these goals:
- Highlight organizational stability in job postings. When considering new employment opportunities, racially and ethnically diverse candidates are 1.2 times as likely as other candidates to list organizational stability (i.e., the relative continuity of the organization over time, particularly as it relates to long-term roles) as a key factor in a new job search.
- Train managers for success. Racially and ethnically diverse candidates are 40 percent more likely than other candidates to consider switching jobs if the prospective organization promises more skilled direct managers and colleagues.
- Offer financial wellness benefits. Student debt reimbursement programs and family-related benefits, such as emergency or onsite daycare and parental leave, are among racially and ethnically diverse employees’ top benefits preferences.
- Create specific initiatives for all levels in the organization. Most senior leadership teams do not reflect the diversity seen at the frontline and lower management levels of the organization. Identify specific initiatives to strengthen the pipeline of diverse talent at each stage in the employee development cycle.
- Encourage networked management. Time spent coaching does not always translate to better performance outcomes. Our research shows that connecting employees with relevant formal and informal learning opportunities is the most effective way to improve their performance through coaching.
CEB Diversity and Inclusion Leadership Council members can access a range of additional resources to learn more about attracting and retaining diverse talent.