Why diversity can only strengthen the next era of North America’s heavy industry
125-year-old Vogue—owned by media behemoth Condé Nast—released their March 2017 cover featuring “the modern American woman” to unrelenting backlash.
The reason?
Backstage beauty reflected a bare minimum of diversity.
New York Times writer Evette Dionne pithily tweeted, “Vogue is ‘democratizing fashion’ by not including a single woman darker than a paper bag in an ‘inclusive’ spread.”
If a publishing titan on the pulse of international media can’t get it right, North American heavy industry employers are definitely not far behind.
Sure, inclusion in the workplace has a long way to go, but why does workplace diversity matter in the heavy industrial sector?
For starters, an even playing field opens up a substantially larger talent pool while sparking the economic hope North American heavy industries are searching for.
A More Modern Industry
While covering The Automation Conference last year, Automation World Senior Editor Stephanie Neil addressed two elephants in the room: automation and the skills shortage in manufacturing.
Clearly, the industry’s focus needs to zero in on the next generation of science, technology, engineering, and math—STEM—professionals, rather than losing steam over fear of robots taking jobs.
Beyond new policies, there’s a dire need for a rejuvenated approach to recruiting and engaging young, diverse minds, broadening the appeal of careers in the world of modern manufacturing.
Neil pointed out, “We as an industry need to do our part to attract more women, minorities, and Millennials to the manufacturing workforce. That requires a shift in attitude and an overhaul to the current corporate culture in order to make it more diversified and inclusive.”
The evolution of future heavy industry careers relies on a modern update to the very understanding of what workplace diversity is and why a commitment to making every person count—when it comes to gender, age, race, ethnicity, sexual orientation, marital status, spiritual beliefs, physical abilities, work and military experience, and educational background—is key to success.
During the National Society of Black Engineers’ annual conference, 2014 President of the International Society of Automation (ISA) and 2015 Chair of The Automation Federation, Peggie Ward Koon stated, “We must first expand our definition of what workforce diversity is, because it is not only about race and gender, but it is about overall life experiences and relationships. You see things differently depending upon what you’ve been through.”
According to a 2016 report by Deloitte and Alliance for Board Diversity, the ever-changing demographics in the United States has been on the minds of C-suite executives and corporate boards.
The “Missing Pieces Report: The 2016 Board Diversity Census of Women and Minorities on Fortune 500 Boards“ was a call to action for companies to determine strategies for more diversity of thought, experience, and background in both management and the boardroom.
Yes, there have been gains, but Deloitte calls them “negligible at best, and certainly not representative of the broad demographic changes we have seen in the United States in the same period of time.”
Mentoring programs, the Harvard Business Review pointed out, are a huge boost for hiring diverse management.
“On average [mentoring programs] boost the representation of black, Hispanic, and Asian-American women, and Hispanic and Asian-American men, by nine percent to 24 percent. In industries where plenty of college-educated non-managers are eligible to move up, like chemicals and electronics, mentoring programs also increase the ranks of white women and black men by 10 percent or more,” Frank Dobbin and Alexandra Kalev wrote.
Progress in the Boardroom
- Majority of African American male increases occurred within the Fortune 100.
- Fortune 500 African American/Black women board members increased by 18.4% since 2012
- Total Fortune 500 African American male board members only increased 1%.
- Caucasian/White women holding Fortune 500 board seats increased by 21.2% since 2012
- Number of Caucasian/White men has decreased by 6.4%
- Asian/Pacific Islanders’ representation is still near 3% of all board seats (167 seats total) with additional 46.7% increase in Asian/Pacific Islander women
- African Americans/Blacks have one of the highest rates of individuals serving on multiple boards—indicative of companies going to the same individuals rather than expanding the pool of African American candidates for board membership
- Nominal gains for Hispanic/Latino men, while two Fortune 500 board seats for Hispanic/Latino women were lost since 2012
- As of February, 65% of Fortune 100 boards have over 30% board diversity, compared to the Fortune 500 where that percentage drops to about 50% of companies
National Women’s Law Center’s (NWLC) incoming CEO and President Fatima Goss Graves told the Wall Street Journal, “We’re in a moment where the public is seeking increased information about the employment practices and composition of large companies. Companies can’t be afraid to report bad news. Bad news might mean you have to identify clear plans going forward for the future.”
As more high-profile companies release annual “diversity reports”, more improvements and updates are promised.
When it comes to women in construction, NWLC reports the share of women in the industry has remained at under three percent for decades now.
“Sexual harassment and hostility, lack of mentors, and stereotyped assumptions about women’s capabilities all contribute to the problem. Unequal access to construction jobs in turn negatively affects women’s income, as traditionally male fields pay higher wages and have a lower wage gap than those dominated by women.”
There’s a missing piece when it comes women in mining, too.
A 2014 “Mining for Talent” report from Women in Mining UK, PWC, Anglo American, BHP Billiton, and Rio Tinto examined diversity within the top 500 global mining companies. The report concluded that besides the countless human resource and social reasons, gender diversity is great for business.
In fact, of the top 500 mining companies, 18 mining companies that had 25 percent or more of their board comprised of women had an average net profit margin that was 49 percent higher during the 2011 financial year. Mining companies with female board members also had a higher overall profit margin—23 percent.
Workplace diversity barriers are clear in America, but what is mind boggling is that employers—especially in engineering fields—struggle to find qualified workers with vital skills—like strong STEM backgrounds—that keep the U.S. competitive, inventive, and continually growing.
Studies indicate that not only do more women in the boardroom produce higher profits, but diversity can benefit the bottom line, as well.
STEM jobs will grow at a 30% faster clip than overall employment growth. Yet the U.S. will have trouble filling those positions with a STEM worker shortfall of nearly 1 million over the decade ending in 2022
According to U.S. News, companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their national industry norms.
Diverse and inclusive workplaces are almost twice as likely to innovate compared to those that are not diverse:
“Projections suggest STEM jobs will grow at a 30 percent faster clip than overall employment growth. Yet the nation will have trouble filling those positions: It is looking at a STEM worker shortfall of nearly 1 million over the decade ending in 2022.”
According to McKinsey reports, engineering and construction sectors along with the broader business community have “plenty of room for improvement in reflecting real-world diversity.”
This isn’t just gender or the color of your skin, but it also encompasses diversity in lifestyle, social status, age, economics, ethnicity, creed, ideology, and thought.
Exclusion is increasingly becoming an expensive route when it comes to hiring.
In a 2015 Institution of Civil Engineers conference keynote, ex-Chief Executive of Highways England, Graham Dalton shared, “The argument is simple. To attract enough high [caliber] engineers to support the next ten years of major infrastructure investment, we must engage the entire talent pool. We can’t afford to exclude at least 50 percent of potential candidates.”
“The [construction] industry is facing a number of challenges… If we’re to come up with innovative solutions for these challenges, we need more than gender and ethnicity diversity. We need diversity of outlook, values, experience and [behaviors].”
According to Executive Director of the National Society of Black Engineers, Karl Reid, the U.S. is projected to become a majority-minority population around 2040. If the U.S. unsuccessfully cultivates engineering Black, Hispanic, and other minority talents it can impair future industrial success.
“For us, diversity isn’t just a moral obligation, it’s a business imperative. Recruiting and developing employees with a range of backgrounds, including women and people of color, makes us smarter and stronger and helps us make better decisions,” says Vice President of Talent Management at Chicago’s energy company Exelon Corporation.
“As a company in a technical industry that is focused on innovation, this is particularly true when it comes to hiring engineers. And as an energy provider, we serve a customer base that is as diverse as the nation itself. A diverse workforce helps us better understand those customers and bring them relevant solutions.”
In order to face the next decade’s looming skills gap in manufacturing—an estimated two million workers to be exact—Deloitte points out that closing the skills gap means closing the gender gap.
Manufacturing executives reported that six out of 10 positions are currently empty thanks to a massive talent shortage. Manufacturers lack a critical talent pool: women represent less than a third of the manufacturing jobs.
Other industries—retail, consumer products, life sciences, medical devices, technology, media, and telecommunications—are winning at attracting and retaining women. Bridging the imminent skills gap could mean taking a page from these leading fields, strengthened by a K-12 educational system that encourages all students to pursue careers in heavy industries.
Case in point: those familiar with manufacturing are twice as likely to encourage a child to pursue manufacturing.
Canadian Workplace Diversity
According to data from the 2006 Canadian census, people from more than 200 different ethnic groups speaking 150 different languages live in Canada, making it one of the most ethnically diverse countries in the world. The nation is home to one of the highest rates of working-age people of all the G8 countries. Immigration is also quickly altering the makeup of Canada’s population.
In Metropolis British Columbia’s archived 2008 report “Canada’s Visible Minority Population: 1967-2017”, the authors extrapolate on the demographic evolution that Canada has undergone during the last half century. With an older population, decreased birthrate, movement toward urbanization, and various shifts in immigration trends, the composition, distribution, and shape of the Canadian population changed the face of the labor force, too.
Between 1961 and 2001, Canada shifted from a manufacturing-based economy to one based on service industries. The number of jobs in primary industries dropped by almost 20 percent and expansion of the welfare state resulted in a tripling in the number of jobs in social services related industries—health, education, and welfare.
Also, business services increased sixfold, to constitute 16 percent of all jobs, and the number of jobs in consumer services increased two and a half times. Meanwhile, the number of jobs in manufacturing dropped from 22 percent from 1961 to 14 percent in 2001. “While 40 years ago the manufacturing sector was capable of providing good jobs to people with moderate levels of schooling, but the disappearance of those jobs and the increase in skills-based industries has meant that the emerging [labor] force is much more segmented by schooling and skill requirements,” MBC’s report added. “These shifts have the potential to create or intensify social and economic cleavages within Canadian society and it is within the context of these shifts that visible minorities have been entering the Canadian [labor] market.”
“While 40 years ago the manufacturing sector was capable of providing good jobs to people with moderate levels of schooling, but the disappearance of those jobs and the increase in skills-based industries has meant that the emerging [labor] force is much more segmented by schooling and skill requirements,” MBC’s report added.
“These shifts have the potential to create or intensify social and economic cleavages within Canadian society and it is within the context of these shifts that visible minorities have been entering the Canadian [labor] market.”
“These shifts have the potential to create or intensify social and economic cleavages within Canadian society and it is within the context of these shifts that visible minorities have been entering the Canadian [labor] market.”
According to the Mining Industry Human Resources Council’s study of the status of women in Canada’s mining and exploration sector, “A critical mass of women at all levels of an organization, including senior management has been linked to higher organizational performance.”
Why? Besides new industry perspectives, the mining industry if fueled by innovation and collaboration is a priceless resource for increased productivity and cost-effectiveness.
A Brighter, Better Future
The future is getting brighter, thanks to initiatives like The Manufacturing Institute’s STEP Ahead program. While women make up 47 percent of the U.S. workforce, a mere 27 percent comprise the manufacturing workforce. The STEP—science, technology, engineering, and production—Ahead initiative assists in mentoring and recognizing women, while boosting research efforts to tackle improving these numbers.
51 percent of respondents in Deloitte’s Women in Manufacturing study indicated that they have seen positive change in their industry’s attitude toward female professional employees, and definitive action can continue to move the needle.
The Kauffman Foundation is worth noting for its efforts to shut down barriers when it comes to workplace diversity. It recently awarded $4.3 million in grants to 12 organizations to raise rates of entrepreneurship among women and minorities.
Grantees include New Orleans-based Propeller—an incubator that supports ventures working to address issues from the region’s water crisis to community health disparities, and Oakland’s Kapor Center for Social Impact—advancing STEM education for students of color.
“There was not just one thing that worked, but all of the initiatives were focused on the user experience of an entrepreneur: How do we get them in front of the right people? How do we work with communities to support entrepreneurship? How can we create access?” said Kauffman report author, Victor Hwang.
One initiative may prove crucial across all U.S. industries: the Zero Barriers to Startup. This collaborative project identified barriers across the country faced by various demographics and regions.
How can U.S. industries, business owners, workers, community leaders, and government officials tear through these barriers and effectively revolutionize workplace diversity trends? Shift the current discourse:
“By bringing these communities together to share practices and ideas, they can lift each other up and start to accelerate the process of breaking down barriers across the country. This, in turn, will provide strategies to improve entrepreneurship and put an end to these barriers that hold back a more innovative future for the nation,” Hwang says.
