How Small Business Owners Can Retain Diverse Talent

  • Since the recent racial reckoning, many industries have worked to diversify their workforces.
  • Retaining talent from historically marginalized backgrounds remains an issue for some employers.
  • Leadership consultants and executives share tips for companies looking to retain diverse talent.
  • This article is part of Talent Insider, a series featuring expert advice to help small business owners navigate a range of hiring challenges.

When Gena Cox entered the corporate world in 1995, she was used to almost always being the only black woman, immigrant, and person of color in the room.

“I was definitely a first and only in the business, but I felt like my talent was valued,” said Cox, who was born in Barbados.

But later in her career, Cox faced prejudice and exclusion from her colleagues, which prompted her to leave those employers. Cox is not alone: ​​Many workers from underrepresented backgrounds say they left companies because they didn’t feel respected or included.

Since the racial reckoning sparked by the 2020 murder of George Floyd, many industries, from finance to retail, have struggled to diversify their employee bases and leadership. But retaining talent from historically marginalized backgrounds remains a key issue for some employers, especially in times of labor shortages.

Cox, leadership consultants and leaders from underrepresented groups reflected on their experiences and shared several takeaways for companies looking to retain diverse talent. They identified four important steps, including investing in employee mentoring opportunities.

“If you hire people from underrepresented backgrounds and they’re ignored, disrespected, or don’t have access to opportunities, they’re going to leave,” Cox said.

1. Diversity directors aren’t always needed

While having a C-suite manager dedicated to promoting diversity can help companies do important work, it’s not the only way to advance equity, executives and CEOs said. the consultants interviewed by Insider. In fact, some say having a chief diversity officer encourages CEOs and other leaders to channel diversity and inclusion issues to that person, instead of taking them on themselves.

“Instead of focusing on having a diversity director, focus on effective leadership for all of your leaders,” Cox said.

For example, managers should be trained in psychological safety — a term used by mental health experts to describe a space where people feel they can be authentic, supported and validated — Cox said.

In everyday work, psychological safety means having workplaces where employees feel safe to share their ideas. To develop this skill, leaders must practice giving open, honest, and constructive feedback, taking the time to listen to employees, treating workers with respect, and expressing gratitude. If you’re not sure where to start, consider hiring the expertise of a human resources professional or the advice of a consultant.

“Practice listening with empathy. Listen to understand and don’t listen to respond,” said Soumaya Khalifa, CEO of leadership consultancy Khalifa Consulting. “Create a safe space where employees are comfortable and feel safe to share their real workplace concerns.”

2. Engage your employees in the conversations that matter

If you’re not aware of the diversity, equity and inclusion issues in your business, there’s no way to begin to address them. To better understand your company’s issues, ask your employees what they see as issues, said Yolanda Collins, a DEI and marketing strategist who runs her own consulting firm, Straight Outta Corporate.

“Allow employees to define what inclusion means to them and create what it looks like,” Collins said via email.

Otherwise, leaders could be tempted to implement their own solutions, which can create a top-down approach that feels forced or won’t be as effective, she added.

Conducting anonymous employee culture surveys is a good way to take the pulse of how your employees are feeling, Khalifa said. This can help you identify areas that need work, and once issues are identified, leaders can follow up using focus groups.

For example, you might discover through a survey that your Muslim employees feel they don’t have the time or physical space to pray during the day, which makes them feel disrespected, Khalifa said. Getting this feedback could help you establish a company rule that employees are allowed to take prayer breaks in a dedicated room after submitting a written request.

“It’s about leading with fairness by providing every employee with what they need to do their job well,” she added.

Headshot of Jyl Feliciano, executive at Highspot/

Jyl Feliciano, executive at Highspot, emphasizes how important mentoring is in retaining talent from historically marginalized backgrounds.

Darryl Hammond


3. Invest in mentorship and sponsorship

Mariana Cogan, chief marketing officer of software company People.AI, said the companies she stayed with the longest were those that offered her opportunities for professional growth.

“The different challenges and added responsibilities have allowed me to grow,” said Cogan, who is Hispanic. “Even though there were no senior Latin executives at the time, they could all see past my cultural differences and appreciate my talent.”

To effectively retain talent from marginalized backgrounds, managers need to spend time mentoring them, Cogan added. They must also be ready to defend them when it comes time for raises and promotions.

“Mentoring is really critical in investing and creating inclusion,” said Jyl Feliciano, Global Head and Vice President of Diversity, Equity, Inclusion and Belonging. highspot software. “Mentoring allows professionals to connect with others and then bring new ideas back to the business.”

4. Be careful how you distribute opportunities and raises

Cox has a simple phrase for managers to remember when it comes to inclusive leadership: “Put me in and show me the money.” In other words, harness the talent and passion of all your employees, then compensate them accordingly as they add value to your business.

“One of the really frustrating things I hear from marginalized people is that they’re overeducated, overprepared, but underutilized as leaders,” Cox said.

Managers should pay attention to employees who go above and beyond and encourage this behavior when allocating opportunities, resources and raises.

For example, by making diversity and inclusion an imperative in your company, you may notice that some employees volunteer to take on additional responsibilities or demonstrate leadership qualities by mentoring others. Reward this involvement with additional compensation and opportunities.

“It’s not compensation for compensation’s sake, it’s compensation for value and recognition,” Cox said.

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