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Companies like Wells Fargo, Delta enact diverse hiring targets

Professor of Social Sciences at Harvard University Frank Dobbin joins Yahoo Finance’s Kristin Myers to discuss the outlook on companies committing to more diverse hiring practices.

Video Transcript

KRISTIN MYERS: Well, can quotas fix diversity? Some companies like Wells Fargo and Delta have set hiring targets to increase diversity among their employees. So to chat this move, we're joined now by Frank Dobbin, Professor of Social Sciences at Harvard University. Professor, I guess the first question that I have for you here, are quotas even legal? I feel as if I'm sensing some sort of lawsuits coming down the pike with these sorts of moves as people are upset that perhaps they were not hired because they were not a diversity hire, perhaps, so what's the legality of these moves?

FRANK DOBBIN: Well, over the years, the courts have allowed some kind of quotas, but for the most part, they've struck down quotas as discriminatory against whites when the quotas for example, take the form or you have to have one Black person for each white person you hire, which is a typical form quotas take. So as a consequence, most employers, if they do set targets or goals, they don't call them quotas, and they don't make a hard and fast rule that, for example, exactly half of the new hires in a particular job category have to be diverse, to be African-Americans or Latinos, for example.

KRISTIN MYERS: So how--

FRANK DOBBIN: Essentially, they're illegal enough that employers are unlikely to actually call them quotas, because they'll get pegged in court for that.

KRISTIN MYERS: Right. Well, how effective are these, if we're not calling them quotas, at least initiatives, the push for more diverse employees? How effective are they? Because it seems as if we talk time and time again in industry after industry after industry this need for increased diversity, yet we're not really seeing it. I'm not sure if that's because these companies have never actually tried to increase diversity prior or if these initiatives just frankly have not worked.

FRANK DOBBIN: Well, I will say that goals and targets generally have worked when everybody in the workplace knows about them and when all the managers who are supposed to be striving for those goals know about them. So for example, in the 1970s, most federal contractors put in their affirmative action plan goals and targets, and they distributed them to managers so everybody knew what the goals were, and they made a difference. It made a difference if you had goals and targets.

That is [INAUDIBLE] more likely to add Black employees if they had a target. But what's happened though is that most federal contractors still have goals, but they don't distribute them to managers. So basically, they have a goal, but it's secret from the people who could be trying to achieve that goal.

KRISTIN MYERS: So to that end, is there any other reason that perhaps, you know, change has been so slow? It's well known, there's been many studies written about it that diversity is financially beneficial to companies. So is it the fact that these initiatives were not put in place properly, or at least not put in place to ensure success? Why has change been so slow on this front?

FRANK DOBBIN: Well, our research shows that the problem is that most employers put in practices that don't work, that are there to symbolize their commitment to diversity but that don't really change how things happen on the ground. So for example, most companies put in diversity programs that include mandatory diversity training, civil rights grievance procedures and bureaucratic hiring and promotion rules like using job tests to hire people. And what we see is that managers who are in charge of making, hiring and promotion decisions are put off by those kinds of innovations, because they blame managers.

They essentially push the problem down, suggesting that managers are biased, so they need training, they need a grievance process so that employees who work for them can file a charge against them, and they need rules that prevent them from practicing discrimination. So these things don't just not work, they backfire. Companies that put them in see actual decreases in the diversity of the workforce, particularly the managerial workforce. There is a pattern, though, among the things that do work.

So one of the issues that we have now is the things I just mentioned are very common. Most employers now, for example, have civil rights grievance procedures. They mostly use job tests for certain jobs, but there are a bunch of things that work, but they take a different approach, that is they use managers to be part of the solution, particularly white male managers, and that is much less likely to turn people off.

So when employers ask managers to join special recruitment visits to hire women and people of color, for example, going to historically Black colleges. When they asked him to be part of formal mentoring programs to mentor women and people of color, when they asked them to join in-house management training teams that will train the next generation of managers where they get to know a diverse group of people who want to be managers, and when they asked them to join a diversity task forces, all of these things actually lead to increases in workforce diversity. Now, these things are more work, because they don't just involve sending managers to an hour of diversity training once a year.

KRISTIN MYERS: Right.

FRANK DOBBIN: You know, they all require some work on the part of managers, but these things all actually lead to significant increases in the workforce, not just the low level frontline workforce, in the managerial workforce. So I think that the big issue is that we're doing too many of the things that backfire by blaming managers and not enough of the things that actually tend to work, and they work by getting managers involved in solving the problem and taking responsibility for it.

KRISTIN MYERS: Right, well, we'll have to leave that conversation there. Professor Frank Dobbin, Professor of Social Sciences at Harvard University.