Companies Are Looking for Diverse Talent, but Only in the Back Office
Do diversity signals translate to actual diversity?
Half of job postings since 2022 have included an EEO statement to signal the companies’ commitment to diversity. This is a 10 percentage point increase from the share of postings in 2020.
Companies that signal commitment to diversity adhere to their pledge. These companies have more racially diverse hiring practices compared to companies that do not include EEO statements in their job postings.
Customer-facing roles are targets for diversity hires less often than back-office roles are. Companies that signal commitment to diversity include EEO statements in job postings for back-office jobs more than customer-facing jobs. They have more diverse hires in back-end roles compared to customer-facing roles.
Since the George Floyd and Stop Asian Hate protests, companies in the US have been facing the uphill battle of combating workplace discrimination and promoting a diverse and inclusive workplace. Many companies have been posting Equal Employment Opportunity (EEO) statements in their job postings to pledge to uphold equal opportunity and fair employment practices. Companies are not legally required to disclose their commitment to diversity in their job postings, unless they are federal contractors. Therefore, EEO statements are meant to provide a signal to prospective employees that the company values diversity and adopts inclusive hiring and retention practices.
Pro-diversity statements may give companies a more diverse applicant pool, but do they translate to actual diversity? In this newsletter, we use Revelio Labs’ workforce data to answer this question. We exclude federal contractors from this analysis since they are required to publish EEO statements in their job postings.
How frequently do companies include EEO statements in their job postings? Roughly half of job postings since 2022 have included an EEO statement: a 10 percentage point increase from the share of postings before the George Floyd protests in 2020. However, it is worth noting that some companies choose to signal their commitment to diversity by including an EEO section on their career pages, without necessarily including EEO statements in each job posting.
Do companies that signal a commitment to diversity adhere to their pledge? According to our workforce data, yes! Companies that signal commitment to diversity through EEO statements have more ethnically diverse hiring practices. 33% of inflows in companies that include EEO statements in their job postings are employees of color, compared to 28% in companies without such signals.
Companies that include EEO statements in their job postings often fail to extend their commitment to diversity across all functions in the organization. Surprisingly, these companies appear to focus on attracting diverse talent primarily for back-office positions. Job postings for back-office roles, such as engineering and data science, are more likely to include EEO statements than those for customer-facing positions, like customer service roles.
This signaling translates into actual hiring practices: Companies that demonstrate commitment to diversity tend to hire non-white employees more frequently for back office jobs rather than customer-facing roles. In these companies, 30% of hires for customer facing positions are non-white, compared to a share of 35% in back-office roles.
Studies examining the effectiveness of EEO and pro-diversity efforts have found that pro-diversity statements do not work. We provide evidence that they do work, but only as companies please. Companies intentionally discriminate in signaling their commitment to diversity: They signal their pledge to prospective employees in back-office positions to attract more diverse talent to these positions, and they adhere to their pledge in these positions. Companies must both signal and act on steps to promote diversity, but doing so in the uneven pattern we observe begs new questions of what diversity looks like and how committed companies really are to it. One way to ensure that diverse workers are represented in all functions within the organization is to create dedicated DEI teams that actively pursue their DEI objectives in minority hiring and retention efforts. Like our work with the Washington Post highlights, corporate America may need to rethink its strategy of cutting DEI jobs.
