Indeed, “Second Chance” or “Fair Chance” hiring — when done right — is good for business. Companies can fill workforce gaps and reduce turnover, increasing productivity and cutting on-boarding costs. This practice also has community benefits and is a place where corporate value and social values dovetail. When people with criminal records are employed, economic activity and new tax bases are created, and public safety increases.

A 2021 survey of human resources professionals found that 81% believed that the quality of workers with criminal records is generally the same or better than workers without records, with nearly identical hiring costs. Studies have also shown that retention rates are higher, turnover is lower, and employees with criminal records are more loyal to their employers once hired.

Recent job openings reports from the U.S. Bureau of Labor Statistics showed thousands of open positions in accommodation and food services and in manufacturing — just two of the many industries in which talented people who happen to have criminal records could fill the labor gap.

Offering a second chance

Second-chance hiring is good for employers’ bottom lines in whatever industry they operate. Fortunately, many more business leaders are also recognizing the significant value in second-chance hiring. The Second Chance Business Coalition, led by Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., and Craig Arnold, Chairman and CEO of Eaton, has brought large businesses into the space.  Corporations such as Walmart, McDonalds, Verizon, Accenture, and Koch Industries are among more than three dozen companies that have been brought together by the coalition to work on this issue.

When I was incarcerated, no one asked me for money, but nearly everyone asked me to help them get a job after they were released. Today, I work with businesses to help them develop organizational and risk management strategies to better recruit and retain people with criminal records.

A 2021 report from the Alliance for Safety and Justice estimates that one-third of American adults — roughly 78 million people — have a criminal record. The problem is even worse for Black men. A University of Georgia study found that, as of 2010, 33% of Black men had a felony conviction compared to 8% for all adults.

Unemployment also has been an inescapable by-product of a criminal record. The Prison Policy Initiative calculated that the unemployment rate for people with criminal records is over 27%. By contrast, the country’s overall unemployment rate currently stands at just 3.5%.

Expungement as a risk management tool

Expungement, or record-clearing, is a powerful risk management tool for businesses, but the system can vary drastically among states. For example, a minor drug offense in Florida can stay on a person’s criminal record for life, while a much more serious offense that involved prison time may be expunged in another state. When an employer performs a background check, the Florida person who never served a day in jail will be classified as a “felon” while the person who did years in prison will not.

Fourteen states now broadly allow felonies and misdemeanors to be expunged, while another 23 states have narrower expungement criteria for felonies and misdemeanors. Five other states allow expungement only for pardoned felonies and certain misdemeanors, and three states and the District of Columbia allow only misdemeanor expungement. Five states and the federal system have no expungement law. Without broad record-clearing laws, a person with even a minor criminal conviction will always wear that scarlet letter.

Broader expungement laws have risk management benefits as well. This creates additional issues for chief human resources officers, corporate general counsels, and employment lawyers. Most businesses will never learn of an expunged record, which generally adds additional protections against negligent hiring cases and creates no additional work for corporate staff. In contrast, when a background check has a criminal conviction, the business may have to take additional steps before it can hire the person under the Fair Credit Reporting Act, applicable state laws, and its own risk management strategy.

Without expungement, the risk management landscape is largely governed by state law. For example, Colorado law prohibits an employee’s criminal record from being introduced as evidence in a lawsuit against an employer unless there is a direct relationship between the criminal history and the underlying facts of the claim (Colo. Rev. Stat. Ann. § 8-2-201(2)(a)(I)). Florida — a state without a record-clearing process — protects employers from a negligent-hiring presumption in cases in which the criminal-records check “did not reveal any information that reasonably demonstrated the unsuitability of the prospective employee” (§ 768.096, Fla. Stat.).

Hiring and retention are core business functions and are not an option for companies to achieve success. Unlocking this relatively untapped talent pool can help businesses grow and thrive, creating profits for the business and benefits for its stakeholders, employees, and surrounding community.

Hear more about John’s work, his former legal career, and his journey from prison to expert on re-entry into society after prison on Episode 108 of The Hearing: A Legal Podcast from Thomson Reuters.

While talent issues remain high on the board agenda for many companies, organizations need to do more to explicitly tie the well-being of their people and corporate purpose directly to corporate ESG activities on a consistent basis. Indeed, measuring social impact — the S in ESG — through the lens of people’s well-being is not yet mainstream, although it is gaining traction.

Multinational food manufacturing giant the Kellogg Company (Kellogg’s) is among those companies that consistently link their global purpose platform to their sustainability agenda and ensures their purpose is centered on the well-being of their employees and other stakeholders. More specifically, the company, through its Kellogg’s Better Days Promise, aims to advance sustainable and equitable access to food by addressing the intersection of well-being, hunger, sustainability, and equity, diversity & inclusion to create better days for 3 billion people by the end of 2030.

Enacting a multi-pronged stakeholder engagement strategy

Kellogg’s also embeds its corporate purpose into its growth strategy. This definitive integration of purpose and growth dates back a century to its founder and is well entrenched within the organization’s business and culture today, says Stephanie Slingerland, Senior Director of Philanthropy and Social Impact at the Kellogg Company.

The Better Days Promise is a key element of Kellogg’s Deploy for Balanced Growth strategy, which includes consideration of the varying sustainability-related preferences, needs, and desires of the company’s multiple stakeholder groups — employees, customers, consumers, investors, and the communities in which the company is based and operates.

With the recognition that the “company should and can do well by doing good,” Kellogg’s has taken a proactive approach to engaging with stakeholders to communicate how its corporate ESG strategy remains central to its operations and growth strategy through a people well-being lens, Slingerland explains.

Kellogg’s has seen positive implications by intentionally collaborating with stakeholders to integrate the organization’s corporate purpose and social impact into its ESG strategy in a variety of ways, including:

• • • Cross-stakeholder ESG initiatives — Honoring World Food Day is a month-long event at Kellogg’s. It is an opportunity for the company to engage with many of its stakeholders, including food banks, retail partners, and employees, through workplace and community volunteering opportunities, donation drives, communications, and events.
    • Employees — Kellogg’s employees regularly engage with ESG initiatives over the course of the year. Indeed, cultivating employees as ambassadors through the promotion of the Better Days Promise to employees’ networks, customers, and partners enables a multiplier effect on the company’s ESG communications and social impact.
    • Consumers & community — Kellogg’s has a long history of involving consumers in its philanthropic activities. In the summer of 2022, for example, the company’s launch of the Build for Better program and competition, executed in partnership with Minecraft and the nonprofit KABOOM!, allowed consumers to design a virtual playground on Minecraft and submit it for the chance to see it built in real life. The winning design was built at a Boys and Girl Club of America in Marietta, Georgia in November 2022.
    • Customers — Likewise, the company’s retail customers recognize the importance of ESG initiatives and are eager to partner on Better Days Promise. For example, Kellogg’s collaborated with a retailer to launch Kellogg’s InGrained, a program that helps rice farmers reduce climate impact. Another retail partner, recognized Kellogg’s commitment, investment, and partnership on philanthropic, sustainability, and well-being initiatives, named the company the first-ever ESG Supplier of the Year.

Storytelling & data are essential

Data and storytelling are key to executing holistic, multi-pronged communications to a wide variety of stakeholders. While it is sometimes tricky to address all audiences’ preferences and expectations, “sharing stories about the people behind our strategy who have such a passion for their work, or the people that the initiative impacts, resonates the most,” Slingerland says. “Data helps to contextualize the impact of the stories.”

One of the most common challenges in implementing an ESG engagement strategy is how to influence late-comers or those who question the validity of the widespread attention that ESG is receiving. To make progress, companies should stay focused and highlight the positive impact company initiatives can have on the surrounding communities, and how these initiatives help drive company’s growth, Slingerland advises.

As a result, these topics will become part of the normal course of business discourse in 2023. More specifically, here are five ESG themes that will be on the horizon this coming year:

1. ESG takes two steps closer in becoming just “business”

At its core, sustainability is about using fewer resources — natural, financial, and human — to generate increased efficiency and effectiveness in business performance, while reducing risk and identifying leveraging opportunities. John Friedman, Managing Director of ESG at Grant Thornton, advocates for the idea of calling sustainability “business” and reframing it in that way, because “no matter what you call it, it is just smart business to understand and manage those things that are levers for attracting more customers and investments [and] engaging your workforce, which all drive profitability.”

To underscore that point, a recent Deloitte study found that more than half of executives said they anticipate benefits from enhanced ESG reporting, including increased employee retention (with 52% of survey respondents citing this as a benefit), improved return on investment (52%), stronger stakeholder trust (51%), elevated brand reputation (49%), and reduction in risk (48%). Indeed, Infosys research found a strong correction between ESG and financial returns and realized financial benefits, including the lower weighted average cost of capital, according to McKinsey & Co.

2. Return to office is so 2022

Hybrid work is here to stay, and employees continue to crave flexibility. In addition, there is emerging evidence that remote working does not automatically mean a lack of engagement based on recent research of metadata gathered from virtual meeting platforms from 10 large global organizations, spoiling one of the major arguments for bringing employees back to the workplace immediately.

3. Employees still maintain an advantage over employers in major markets, albeit a smaller one

The tight labor market is likely to continue in major markets, despite the expectations of a recession in the U.S. and Europe in 2023. A key factor behind this is that labor force participation rates in the U.S. and in Europe continue to shrink over the long term. Further, attracting retirees back into the work force and shrinking net migration rates in the U.S. and the European Union are unlikely to fill in the gaps.

Moreover, one-third of European workers surveyed in mid-2022 said they were expecting to “quit their jobs, even amid the destabilizing conflict in Ukraine, rising inflation, and [as] growing fears of hiring freezes and job losses have created a difficult set of conditions for companies.” Against this backdrop, the European Commission is seeking to attract and retain foreign talent in the region through the Skills and Talents Package, a set of operational and legislative proposals to attract highly skilled foreign individuals, that was established last year.

4. Power skills get the attention of corporate boards

There is a growing need in the nation’s workplaces to rebrand so-called soft skills and instead refer to them as power skills, which can be key to motivating and engaging high-performing teams consistently, especially in the aftermath of the pandemic. In fact, “executives and shareholders are now crystal clear on the value of the human side of leadership, meaning the capability to connect with others, show empathy and compassion, be inclusive and resilient, and excel even in uncertainty.” As a result, boards of directors now want even more involvement in workforce issues.

5. The “S” rising in importance

The momentum of the human side of business has been building since early 2020. In addition, elements of the “S”  are quickly becoming a key success indicator of an ESG strategy. These include workers’ well-being, executive pay increasingly being tied to diversity, equity & inclusion goals, and pay equity and transparency, according to Brian Bueno, ESG Leader at Farient Advisors.

Jenn Ramirez Robson, Vice President of Employment Services at disability inclusion nonprofit Northwest Center, and Gayatri Joshi, former Executive Director of the Law Firm Sustainability Network and Partner at Vorgate Legal ESG Impact, both say that pay transparency and equity are emerging as issues of increasing importance, even as jurisdictions enact additional laws.

In fact, concentrating on the individual well-being aspect of ESG highlights other areas of ESG, such as a critical focus on the environment, Joshi explains. “When we can give respect and equity to all people, the S paradigm will often shift to support E.”

One aspect of how society gains greater awareness of environmental sustainability is through its impact on people, she adds. “When we don’t have equity, we don’t have equal power and choices, and it can translate to whether you can afford to live in a place free of pollution and climate risks or affording healthy food. It’s one of the reasons why the S is so important — we need all those stakeholders to have power and have a say.”

As we enter 2023, business will continue to become increasingly human-centered, and as a result, ESG and workers will keep moving to the forefront, gaining critical attention and importance throughout the coming year.

The intersection of climate change and inequality is reshaping the world, and the social contributions of private sector companies are increasingly part of the expectations and solutions to a just transition for investors, members of communities in which companies operate, and members of civil society. However, myths around the lack of measurement of social impact persist, despite well-known ways of doing so.

Tackling the “S” through investors’ eyes

Investors and the financial sector have been tackling how to account for, measure, and communicate companies’ social impact for a while, according to Bettina Reinboth, Director of Human Rights & Social Issues at Principles for Responsible Investment (PRI), a UN-supported network of institutional investors that promotes responsible investment through the use of sustainability practices. In a recent article, PRI clarified how the UN Guiding Principles on Business & Human Rights set expectations for investors to act on human rights.

Institutional investors, particularly those considered universal owners, maintain a long-term investment horizon. This takes a multi-decade view of how the transition to a sustainable global economy impacts people internally and externally, the main component of the social part of ESG.

Likewise, corporate directors are focusing on holistic employee well-being now in large part because of investors’ demands and the upcoming regulatory requirements to meet their fiduciary and oversight obligations. “Talent is a part of everything an organization does, and we see boards leaning into talent matters with management more than ever,” says Carey Oven, National Managing Partner at Deloitte’s Center for Board Effectiveness. “They are requesting more data around engagement and sentiment and exploring enriching ways to get feedback from the workforce in a much bigger way than they had before.”

Up until a few years ago, companies could get away with having a human rights policy with the expectation of adherence from the top of the organization to the bottom, including board oversight, as important foundational elements. More recently, however, investors’ savvy is increasingly on the rise, and investors are looking for more detailed information about measurement. Some of the more pointed questions on investors’ minds include: i) how actual and potential negative outcomes for people are identified; ii) what due diligence and verification of the adherence to policy and practices are performed; and iii) what is the process for dealing with effective grievance mechanisms.

In part, this is the reason for the spike in investors noting publicly when there is a gap between what a company says it does and what it actually does within ESG.

Culture & well-being as a key measurement of the “S”

The well-being of people is central to the social performance of firms. Investors and now corporate directors are looking for ways to capture social indicators as part of companies ESG strategies. Yet, in order to measure an organization’s social impact, a company must first define its stakeholders, which include employees, consumers, and local communities, including those that may be part of the company’s supply chain.

Because employee well-being is central to that of society, for companies to understand the full scope of how their actions and policies contribute to well-being is important. Critical elements of a comprehensive corporate approach to well-being include: i) aspects about the work itself, and the social interactions that employees have at work; ii) the skills each employee gains through employment; and iii) the sense of purpose from the job experienced by each employee.

In addition, measures of employee inequality, representation, pay, promotion, and overall working conditions are equally important. More specifically, there are many people well-being indicators organizations can use to measure their social impact, according to the Organisation for Economic Co-operation and Development (OECD). These indicators include:

• • • • Employment — such as hiring, turnover, and promotion.
      • Earnings — wages, benefits, executive pay gap, and financial insecurity.
      • Learning & skills — skills obtained on the job and the intersection of work and personal development.
      • Health —absenteeism, mental health, and health & safety in working conditions.
      • Social support — manager effectiveness and trust between workers.
      • Work/life balance — annual leave, parental leave, and average working hours per employee.
      • Employees’ voices & feedback — trust in management, upward feedback of managers, and mechanisms to give employees a voice.

Further, to address the impact on the well-being of local communities and society as a whole, the OECD highlights the following indicators:

• • • • Economic — Taxes paid and revenue generated in each locality.
      • Human — strategic community investment, such as when a company brings its banking relationships to assist in small business funding for local entrepreneurs.
      • Social — board composition and compensation, political contributions, and fines paid.

Analyzing the social risks and impact through lens of well-being of employees and society is one of many ways to measure the “S,” but also a simple and logical one. The interplay between the social impacts during the climate transition will only grow.

Many assume that the expected global economic slow-down will stall sustainability efforts, but PRI’s Reinboth argues the opposite — that progress on sustainability will accelerate based on recent evidence of momentum because of the simultaneous, negative multiple shocks to the well-being of people and society during the global pandemic as the crisis shined a spotlight on the global vulnerabilities and how the social part of ESG intersects with the “E” and the “G” as well.

The discussion came during The Independent Director Initiative, a two-day program designed to help individuals from under-represented backgrounds land board directorships in venture-backed private companies.

During the session, panelists warned CEOs not to rely solely on their networks or to strictly target C-suite credentials to staff a board. Company leaders need to reevaluate their criteria and methods for filling board seats and broaden their pool of candidates.

“It’s a loss for the companies that can’t see these candidates, and it’s a loss for the prospective candidates who don’t get to bring their expertise into the boardroom,” said Ann Shepherd, co-founder of Him for Her, an organization aimed at addressing women’s under-representation on corporate boards. It’s also a loss, Shepherd noted, for all those stakeholders who are invested in the company.

Search and reach beyond personal networks

Before starting Him for Her, founder Jocelyn Mangan interviewed more than 90 CEOs and sitting directors — all of them men — and found that all filled their last board appointment with someone from their personal network. “It makes sense if you’re filling a board seat to go to people you know and trust,” Shepherd explained, cautioning that such an approach often excludes potential talent, especially among people of color.

The key to disrupting this approach is to “teach boards and teach the people seeking board positions to fish where the fish are,” said panelist Keith Dorsey, an executive recruiter at global search firm Boyden. “There is rarely malice behind executives’ process for filling board seats — it’s just that people don’t know where to find a pipeline of candidates.”

Members of the panel on board diversity, held during the recent “Independent Director Initiative”

Executive search firms can help bridge the gaps between these networks and the diverse candidates that corporations hope to reach, said Dorsey, warning, however, that search firms also need to consider making changes to how they work with aspiring board members. His research showed that women in particular felt some reticence in dealing with old-line executive search firms, where they sometimes felt unheard.

“The talent is out there,” said Ozzie Gromada Meza, vice president of member and talent services at the Latino Corporate Directors Association (LCDA). Meza highlighted the work the LCDA has done amplifying the talents of those pescados — or fish, in Spanish — in the Latino community. When working with potential board candidates, Meza said it’s important that the individual’s mission and values match those of his organization.

Panelist Josh Green, a former venture capitalist and corporate director, said he believes those corporations that are genuinely committed to serving stakeholders are naturally motivated to pursue board diversity. “The principles of stakeholder capitalism give guidance to making that happen,” Green said, explaining that in stakeholder capitalism, companies orient their activities to satisfying the needs of shareholders, employees, customers, and the community in which they operate.

Too often, however, organizations mistake diversity goals for embracing representation — so-called “board washing,” Green noted. And in those situations, diversity candidates must be prepared to ask the hard questions of the interview panel and even step away, if necessary, he added. “If you truly see a focus and devotion to stakeholder capitalism principles, then I think it becomes of interest.”

Find your “you-sized” hole on a board

Seeking out diversity also means considering candidates with experience and skills outside of the CEO and CFO to other executives in the C-suite, panelists explained. “What we have to do a little bit differently right now is challenge those boards as to why they’re seeking yet another CEO or CFO,” said Dorsey. “If you have nine [board] slots and you currently have eight CEOs or CFOs today, what are you hoping to get from a ninth?”

Companies must look to other executives to find the skills that today’s rapidly changing business world demands, Shepherd said. She urged board hopefuls to evaluate and highlight their competency in a few key areas — such as functional and industry expertise, customer and business model experience, and scale — and then explain their specific value to boards.

Overall, panelists said that board seekers should do their homework and determine which of their favorite companies would be the best fit for their own skill set. “Clean up your LinkedIn, do your homework, and develop your value proposition by looking at the skills needed on several of your favorite boards,” Meza explained.

Beyond that, candidates should “know that you have a story to tell,” he added. Relying too heavily on the resumé gives short shrift to human elements that can make certain candidates more relatable. “How you deliver your message is going to be super-key,” he said. “It’s a brand thing that you’re trying to build, so just be very cognizant of that.”

When it comes to the mechanics of securing a board position and serving as a director, the panelists offered advice on everything from advisory roles to knowing the right time to leave. Fit is important, panelists advised, especially in the areas where boards typically focus — management, service, and governance.

In the end, “it’s all about serendipity… and finding the board with the you-sized hole in it,” Shepherd observed.

The issue of toxic behavior in law firms, tax & accounting firms, and corporations is a cause for concern among diversity, equity & inclusion (DEI) advocates and other professionals because it means that roughly one-third of employees within these organizations are experiencing a lack of inclusion and belonging.

However, some believe the current paradigm of DEI with its top-down approach and its priority on individuals with a single underrepresented identity will not adequately address this type of systemic exclusion, while others believe in an integrated strategy of all three components with an increased focused on belonging.

Problems with the current ways DEI is framed

Stephanie Felder, Director of Professional Development and Diversity at Groom Law, is a proponent of the combined approach. “I don’t think it’s quite that black & white as the need to focus on diversity versus belonging,” says Felder. “Both are important, but until you level the playing field and eliminate the exclusionary practices, processes, and systems within your organization, you can’t actually build diversity or belonging.”

Helen May, Director of Belonging@Work, is one of those who calls for an overhaul in assessing and addressing issues of belonging and inclusion based on the human experience. Organizations and human resources in the years leading up to the pandemic evolved to emerge as “bureaucratically diluted of the human element, including diversity and inclusion,” she explains, adding that the current DEI paradigm causes greater division because of the prevalence on setting and achieving targets and too much focus on “othering” large sets of people.

By focusing on a single underrepresented identity, many white men feel othered even as those with underrepresented identities already feel othered in the current environment. In addition, the current DEI approach does not sufficiently address intersectional needs of those with more than one underrepresented identity.

Another challenge concerning the current DEI paradigm is that it is driven mainly in a top-down manner rather than from the bottom upward though the organization. When approached primarily through a top-down perspective, the root causes of what is driving a sense of exclusion are difficult to identify, says May. Because a lack of belonging tends to stem from exclusive behaviors by individuals from both majority and minority groups, it is hard to work out exactly where within management the sources of the issues are occurring, she argues.

Pursuing inclusion through a belonging lens

May advocates for a revised approach to inclusion through the lens of belonging and well-being that uses human-focused questions as a starting point. These questions include:

• • • What is going to make people perform at their very best?
    • What is going to make everybody create that psychological safety they need?
    • What is going to protect well-being and foster a sense of belonging?

Working through the lens of belonging by default is intersectional because it is human-focused, she explains. “We live in a very intersectional world, and it disincentivizes people with other identities to participate, despite many efforts in the current DEI paradigm to invite ‘allies.’”

Using the belonging and inclusion lens, small networking groups within the overall firm or company are created as a safe place for people to have discussions that focus on people empowering themselves and empowering others. Curiosity is used to explore individuals’ unique qualities and experiences as a way of being within the organization and community that has a responsibility to protect the well-being of everyone, regardless of who they are or into what demographic they fit.

How to execute a belonging strategy

Using belonging and well-being as a fundamental context, May says organizations should start with a future vision of culture that defines a framework to attract the right sort of talent at the board level. Then, once the board is in place, it should then in turn focus on identifying individuals who display these culture framework attributes as part of the board’s succession plan. The board also needs to partner with future board members to outline how to empower employees based on activities and behaviors. Along the way, existing systems of promotion and performance evaluation are left alone.

To demonstrate the positive results from this approach, May describes how one client emerged through this process as an employee-owned business with a four-day work week and unlimited paid time off because it asked employees what they wanted. Those next-in-line for the board have evolved into a hub of the community rather than being seen at the top, directing down.

She says that a key part of the solution is to have first-line and middle managers appoint someone to ask the following questions “until it becomes a habit to ensure inclusion is weaved into every process, including performance evaluation, promotion, recruitment, training, and onboarding system.” These questions include:

• • • Who have we forgot to consider while we’re making this decision?
    • Who might we have disadvantaged with the action we’ve just decided upon?
    • Is there anybody else that we should ask about this decision who may be able to give us an alternative perspective?

The result allows law firms, tax & accounting firms, and corporations to build their culture through behavior and habit because people will start skewing their decisions in the in the right way by default without it having to be a formal process.

Indeed, a few men believe that DEI efforts at their firms and companies disadvantage them and voice some real concerns about it. To learn how best to respond to these concerns, the Thomson Reuters Institute consulted with its Equity, Diversity & Inclusion advisory board to gain the experience of members and learn their thoughts on effective responses.

3 ways to address concerns about specific initiatives being unfair

Employee resource groups (ERGs) and targeted leadership programs have been part of the DEI fabric for a while. In fact, ERGs started off being a group for support, networking, and mentoring; however, as the need for increased representation of diverse individuals at senior levels within organizations has expanded, there is a growing perception that ERGs are providing an advantage to under-represented talent.

Here are some of the best ways to respond to concerns around ERGs and other internal efforts that white men may see as more advantageous to minority talent:

1. Collect more information and listen for common ground — Seek to understand what men are perceiving as unfair by saying, “Tell me more about what you see as unfair…”

Then, perhaps explain to those concerned that some communities — such as first-gen college and law students — don’t have access to family and friend networks of white-collar professionals. Therefore, they have a need for mentors and sponsors who can help them navigate the unwritten rules and norms for success. And that’s why forward-thinking employers have put together targeted programs as part of their offer.

2. Point out that diverse talent is good for business — Explain to them that clients want diverse perspectives in their supply chain. There are hundreds of in-house counsel and corporate accounting and tax functions that are looking for diversity on the teams that staff their engagements because they see the value of having different perspectives — such as gaining new insights or avoiding blind spots. Failure to adhere to these requirements means that law and accounting firms run the risk of losing work, which hurts everyone.

In addition, all employees benefit from having diverse teammates, supervisors, and stakeholders because leaders are consistently working on and stress-testing key cross-cultural skills like cultural fluency, delivering and receiving feedback, effectively addressing conflict, and learning how to grow and support the development of diverse teams.

3. Make it personal about legacy — Ask those who have concerns, “Wouldn’t you want your daughter (or wife, mother, niece, or LGBTQ cousin) to be in an environment where their perspective is valued, and they can thrive?”

Then, emphasize that white men may also identify as members of under-represented or marginalized groups at times. All communities are multidimensional, including people with disabilities, veterans, first-gen college students, and LGBTQ+ individuals, among others. In this way, white men may be members of an under-represented group as well.

How to respond to concerns about lack of future job opportunities because of DEI

One of the default, yet problematic, criticisms around DEI is that it is a zero-sum game. While this is an alluring belief where someone wins and someone loses, it is exactly the opposite. If the organization is stronger and performs better, more opportunity is created for all. Here are a couple of ways to deal with this “zero sum” game mentality:

Use an analogy, such as the “curb-cut effect”  — Shane Lloyd, Head of Diversity, Inclusion & Belonging at Baker Tilly US, points out that one way to think about DEI efforts is with the example of installing curb-cuts on sidewalks to make it easier for people in wheelchairs to cross the street. Yet, it had unintended benefits for others, including people pushing strollers, cyclists, and people with temporary injuries.

Workplace DEI efforts similarly contribute to the curb-cut phenomenon by establishing policies that benefit a broader group. For example, while flexible work arrangements are typically considered women’s issue, men benefit from flexible work arrangements too, allowing them to balance the demands of caregiving or pursuing other interests outside of work.

Highlight what can be gained in terms of leadership — Explain how the most effective leaders are those who can lead diverse teams. Opportunities are expanded when this competency is demonstrated and consistently stress-tested. To lead and actively demonstrate respect from others who are different, it is imperative for leaders to hone these skills by working in normal and challenging conditions.

Today’s business environment requires leaders not only to run an effective operation but also speak to a broader set of issues. An organization with a strong DEI focus will provide opportunities to frame polarizing or highly political issues in a manner that allows for focus on how these dynamics impact people. Framing issues in this way allows leaders to develop an invaluable long-term skill.

In addition, as many companies invest in DEI, it becomes important that leaders have experience playing an active role in DEI efforts. Serving in a leadership role of an affinity group, working towards increasing representation for under-represented talent, or fostering an inclusive culture are competencies and skills that strengthen candidacy for promotion or stretch assignments.

In order for every individual within an organization to have a sense of belonging, to feel comfortable bringing their authentic selves to work, and to engage in friendly debate about work and other issues, everyone needs to be able to engage in healthy dialogue around different understandings and perspectives around DEI.

The workplace is one of the most meaningful environments in which people are engaging across differences. It is important to ensure leaders can enable all team members to have the skills to engage cross-culturally in order to help the business thrive and support an inclusive culture throughout the organization.

These recruitment and retention headaches risk triggering broader operational resilience concerns and require employers to adapt to changing work culture and expectations.

Asia skills shortage “particularly acute” post-pandemic

Consultancy firm PwC has described the skills shortage across Asia as “particularly acute” based on findings from a recent survey in which 18,000 employees based in the Asia-Pacific region participated. Similarly, findings from a report released by Poly Research in March found that 60% of organizations surveyed in the Asia-Pacific region believed that they faced the risk of losing staff and being unable to attract new talent, compared with 53% in Europe, the Middle East, and Africa (EMEA) and 53% in the Americas.

Skills shortages in the region have further brought into focus how recruitment and retention risks could impede the ability of businesses to expand. Data center operators in the Asia-Pacific region will face challenges in expanding capacity to meet demand over the next few years, due to skills shortages, according to research conducted by automation company ABB and Data Center Dynamics.

More than 40% of respondents said data center construction in the region has not been able to keep up with demand during the pandemic. The unavailability of specialist skills was named as a major contributing factor, along with access to specialist sub-contractors and trades.

“Quiet quitting” and “lying flat” receive attention

Following the Great Resignation during the latter part of the pandemic, labor and skills shortages have emerged. A survey of 52,000 workers in 44 countries conducted by PwC found that 20% of workers plan to quit their jobs before the end of this year, suggesting that talent retention will continue to be a concern for employers.

Many countries are also grappling with regional attitudes towards job dissatisfaction. Across Europe, Canada, and the United States, a phenomenon known as “quiet quitting”, in which employees intentionally do the bare minimum to complete their job duties, is prompting companies to look for mitigating options.

A survey of 15,000 workers conducted by U.S. workplace researcher Gallup in June found that more than half of the respondents described themselves as “not engaged” and could be considered quiet quitters. Further, 18% of respondents described themselves as “actively disengaged,” the highest percentage since 2013.

In fact, workers in Europe ranked at the bottom for workplace engagement, compared with their peers around the world. Gallup found that only 14% of workers in Europe said they were engaged at work, compared to 33% in the United States and Canada, 24% in Southeast Asia, and 17% in East Asia, Australia, and New Zealand.

In China, a budding movement of “lying flat” and rejecting high-pressure work culture in favor of a minimalist anti-consumption lifestyle has gained momentum over the past two years. Initially spawned from backlash against high-stress overtime work that is a hallmark of corporate culture at Chinese companies in the digital economy, lying flat has spread beyond the tech industry and could have longer-term impacts on economic growth in China.

Considerations

As today’s skills shortage poses recruitment and retention challenges that could result in wider business continuity risks for organizations, corporations must endeavor to understand how regional attitudes towards work are evolving in order to adapt and mitigate their risk exposure.

In western markets, discussion over quiet quitting is prompting some employers to review job responsibilities for employees, with a view toward expecting only what is formally outlined. This shift in expectations is likely to have a wider effect on corporate cultures, with businesses moving towards more transparent and prescriptive methods of performance evaluation.

In China, regulatory reform and pressure from authorities have prompted many technology companies to cut back on overtime and be more mindful of their compliance with Chinese labor laws.

Businesses around the world are becoming increasingly aware that upskilling their workforce is their best option to mitigate retention risk and shore up skilled labor. Equally important — yet less emphasized during the tail-end of the pandemic — is the need to factor employee well-being into talent retention planning. Overlooking employee job satisfaction potentially risks losing valuable resources spent on upskilling key employees to competitors.

Guidance for employers

Hispanic and Latinx leaders continue to be underrepresented at the executive ranks within the accounting and legal industries. Collaboration with the National Association of Latino Professionals for America, which serves more than 100,000 professionals, and the Hispanic National Bar Association (HNBA) are helping employers make progress, but conversations with Hispanic executives suggest additional effort is necessary.

Compare your internal Hispanic/Latinx representation and that of your customer base — More than 18% of US consumers are from Hispanic backgrounds, according to the US census. Dumitrache Martinez, chief financial officer at Kind and Nature’s Bakery, advises corporations — particularly retail companies — to have similar ranges of representation between their Latino employees and their customers.

If there is a big gap between the countries and cultures from which your customers come and internal representation at the executive level, then there is some work to do. This gap, if left unaddressed, could impact business performance and how marketing messages are created and delivered to Hispanic customers based on different uses and habits, explains Martinez.

Formally sponsor Hispanic and Latinx talent — Intentional effort to develop executive talent from Hispanic and Latinx backgrounds is required by those organizations that have a very large majority presence in the executive suites. The careers of both Martinez and Gerardo Casahonda, Senior Director for International and Indirect Tax at Thomson Reuters, both benefitted from sponsorship by non-Hispanic executives. The HNBA’s PODER25, which seeks to increase the number of Hispanic attorneys occupying senior positions within corporate legal departments, is one example of the type of partnership in which employers can seek to partner with advocacy groups in this area.

Without intentionality, affinity bias, which causes people to gravitate toward others who appear to be like them, kicks in more often than not. Therefore, formally matching Hispanic and Latinx rising stars with executives for sponsorship helps to build bonds across differences that are not so obvious without a formal opportunity to forge a personal connection with someone from another function.

Invest in pools of talent from countries in Latin America — Casahonda indicates that the fact multiple activities of his business is done in Mexico and Costa Rica signals to employees that the company is vested in the development and advancement of talent in these locations and the communities in which these businesses operate.

Moreover, people in the US who work with people from other jurisdictions help to hone cross-cultural skills and develop future potential leaders. Indeed, all employees benefit from having diverse teammates, supervisors, and stakeholders because they are consistently working on and stress-testing key cross-cultural skills like cultural fluency, delivering and receiving feedback, effectively addressing conflict, and learning how to grow and support the development of diverse teams. These conditions are exceptional for building competent leaders of all backgrounds.

Train executives to embrace differing cultures — It is important for leaders and executives to signal proactively that different perspectives are appreciated. They can do this by proactively seeking the thoughts of others from underrepresented backgrounds. In fact, Casahonda says that individuals come to him for his views and insights because of his international work experience and his heritage outside of the US.

Advice for ambitious Latinx and Hispanic employees

In addition to investments made by employers, there are actions for both Hispanic/Latinx professionals. In fact, both Martinez and Casahonda share ways that they got ahead in their own experience and career journeys.

Hone cross-cultural leadership skills by working with others from different backgrounds — Martinez sought to work with a global company with locations in different countries to better expand his breadth of experience working with colleagues across regions. It forced him to work on his cross-cultural communication skills daily.

Improve mindset by reframing thought limitations on English as a second language — Casahonda says he once received feedback from a job interviewer that he needed to stop thinking that English was his second language. The interviewer emphasized that Casahonda should change his mindset and have confidence that he earned the interview because of his talent and be confident that his communication skills would improve over time.

Make ambitions known and seek feedback — One way to proactively communicate the desire to advance within an organization is to ask for management’s advice on what individuals need to do to get their moved up to other jobs. Casahonda sought guidance on how to get his manager’s job and followed the advice.

Of course, there is no magic formula to rise through the ranks of an organization today. It takes both the efforts of the individual and the guidance of mentors, sponsors, and managers in addition to organizational investments to advocate for rising stars and help them get the necessary experience and skills to advance. Employers taking these actions in combination with proactive action on the part of ambitious individuals increase the likelihood of improving representation of Hispanic/Latinx employees at the senior levels within the finance, accounting, and legal industries.

To date, most employers had used a gentle nudge approach for RTO because of the need to retain employees. Even now, flight risk among accountants and lawyers continues to remain at 30% and above and is even higher for those professionals from underrepresented groups. Indeed, the flight risk for lawyers of color in most cases was at least five percentage points higher, according to a survey of 1,500 legal associates, and in the case of Black lawyers, it was 12 percentage points higher.

Further, the process for returning to the office for employees, in particular those from underrepresented backgrounds, also is tricky. Working remotely provided a huge relief and improved mental health to employees with diverse identities because many did not encounter microaggressions as frequently as when they were in the office, pre-pandemic.

This means, however, that many employees are facing a potentially lose-lose situation. They might have to sacrifice their mental health to return to office; or if they seek to continue working remotely, potentially sacrifice their career progression because of management’s tendency to favor those people who are closer to us in time and space. This is known as distance bias or the “out-of-sight, out-of-mind” concept.

Without effective awareness and proactive tactics on the part of management to mitigate distance bias, those professionals who the most vocal, most visible, and present in person may inadvertently be regarded as “high-potential” over others who are more introverted and prefer to work virtually — yet, work just as hard with better results.

Here are some ways to reduce the impact of distance bias:

1. Conduct “stay” interviews regularly

Managers who proactively initiating conversations to get to know team members on a deep level are laying the groundwork for better retention of these employees. Managers may not feel comfortable with doing this at first; so, it is best practice to provide managers with a template and guidance on how to effectively administer these kind of stay interviews.

Bill Bradshaw, head of Diversity & Inclusion at Withum, said managers conducting such interviews with employees should include three questions:

• • • How are you really doing?
    • What can I do to support you?
    • What can I do to ensure you have a rewarding career here?

Consistently asking these questions builds trust, helps the employee to feel appreciated, and assists the manager in supporting the employee in exploring career opportunities. Remember, however, it is important to note that employees may have different timescales on trust-building — some may take months, while others just days.

2. Brainstorm “inclusive” norms and behaviors within teams

Another exercise is to crowd-source inclusive ways of behaviors and expectations within the team for those in the office and also for those working remotely. Start with these questions:

• • • What does an inclusive team look like at the firm?
    • What would be some of the observable behaviors to demonstrate inclusivity?
    • What are one or two things that people should be doing to show inclusivity?

For those managers who may be hesitant, Shane Lloyd, Head of Diversity, Inclusion & Belonging at Baker Tilly, recommends posing additional questions to the team that bring in the “client lens” to give more focused insight for managers, partners, and executives.

• • • Start with the question, “If our team were known as the most inclusive in our organization, what behaviors would we observe?”
    • Follow that with, “If we were known as the most inclusive organization among its clients, what would our clients be saying?”
    • Next ask, “What belonging challenges are we likely to encounter?”
    • Finally, engage in a group discussion on the question, “What behaviors resolve these belonging challenges?”

Questions such as these provide direct insights for leaders on how they can effectively foster the conditions that bring to life the responses provided by employees while offering a kaleidoscope approach to viewing efforts of inclusion. “We want to understand these important dynamics from a variety of vantage points — individual contributors, groups, leaders, and clients,” Lloyd adds. Additionally, normalizing conversations about belonging challenges and discussing them openly allows teams to think about how to effectively address those experiences when they arise. Although it seems counterintuitive, openness around discussing belonging challenges is an evidence-based practice that contributes to fostering an inclusive climate.

3. Have an on-call “belonging” coach for executive leaders

This service allows managers to have a resource available to learn more about microaggressions or help them navigate among the different managerial challenges they are facing. These coaches can also help managers shore up their vital personal communication skills. Based on the “warmLine” service implemented by Intel in 2016, Baker Tilly used a similar approach for employees and now plans to do so for managers soon, according to Lloyd.

Withum took a different approach and hired a full-time coaching team to serve the entire organization, which included the option of offering full-time roles from the business teams that sit within the talent management function of the firm. Specifically for managers and senior managers, the coaches helped executives increase their effectiveness in managing a team of people from diverse backgrounds, while delivering superior business outcomes for clients and helping to fulfill outside-of-work commitments.

Remember that different engagement strategies are necessary to manage employees who work in-person, hybrid, or remotely, and for many managers those differing strategies are not intuitive. On way managers could engage remote workers would be, for example, to create the virtual equivalent of “water cooler” chats by hosting open hours for employees to drop in.

4. Enhance performance evaluation documentation requirements

Keeping quality records on performance over the course of the working relationship (not just during performance evaluation time) is also key. Adding and aligning all of the critical work that employees do for leading employee resource groups, or for vital endeavors like coaching, mentoring, and sponsorship are important investments to recognize as part of the overall value that each individual brings to the organization every year.

At the same time, managers should encourage employees to keep track of their own performance successes and other feedback regularly. This is important ingredient when it comes to performance evaluation time. Then, the manager and employee can compare records, and this action helps to reconcile differing recollections of events and mitigate distance bias.

Overall, the best way to retain all employees is to equip leaders with the tools they need to ensure their own accountability for keeping their finger on the pulse of all team members. Following these aforementioned steps can help guarantee that this happens.