First-class honours in diversity
19 March 2020
The Unsurprising Link Between Diversity and Early Talent
Fresh thinking and emerging talent is a necessity in business, every 30 under 30 lists re-affirms there’s no shortage of new and incredible business minds. Traditionally, the most established entry route in transforming talent into future leaders is the graduate scheme. Internships, apprenticeships, co-ops, and graduate programmes are tough because the competition is vast, and companies know talent is both an asset and an investment. And why shouldn’t these work schemes be difficult? Seems like a fair deal – the brightest and best minds in exchange for job security and a well-known company on your CV.
The reality is, it’s not fair. Since the advent of internships, accepted candidates are assessed against strict qualification criteria and by university rank. Whilst this approach has its merits, it is severely limiting for diversity.
D&I crowning glory
We’re all very well versed in the abundance brought from a diverse workforce. Hiring diverse candidates is great but it’s not enough. A team of different minds, cultures, ethics requires a strong inclusive work environment and a tailored employee experience. No easy feat. You wouldn’t want to put time, money and energy into recruiting incredible candidates for them to leave because they didn’t feel they belonged. In a 2017 Deloitte study, 23% of employees indicated they left their organisations because of the lack of inclusion:
“the most frequently selected reason for leaving was “the atmosphere did not make me comfortable being myself” (33%), while the least cited reason for leaving was “there were not a lot of people of different demographic groups” (12%)‘.”
What if I told you that diversity in early careers addresses belonging – amongst other recruitment challenges – and that I could prove it.
This study explores the highest achievers in diversity to unpack a theory on the correlation between hiring diverse early talent and building an inclusive, retained and cohesive team of innovators and leaders. Let’s begin with a prime example of delivering against diversity and inclusion in early careers. BT retains 85% of its apprentices and 50% are promoted at least once within three years. BT’s head of apprenticeships, Ann Potterton, said about early talent:
“We get ambitious, driven, positive, enthusiastic people who value the opportunity. They pay that back in many different ways….We have CEOs [of individual business units] who started as apprentices.”
If you’re wondering what this has to do with diversity, we’ll get onto that later, but just know that BT was in The Times top 50 employers for women in 2019.
Our vision of the promised land – it’s our mission to get you there
Picture this: each year you populate your company with fresh ideas from different perspectives, whilst simultaneously strengthening your leaders and nurturing the existing networks of magnificent minds. The outcomes are bound to be brilliant. Your organisation is more innovative, it’s investing in employees, meeting their expectations, and treating them like adults. This promised land is simply a diverse workforce that is retained and maintained for longer – to both grow the business and grow within the business. The problem is, as it’s always been, attraction and retention.
The laws of graduate attraction
Each year graduates enter the job market and into relatively stable conditions: in 2018, 87% UK graduates were employed, along with 79% of US graduates. The number of graduates hired in the UK by organisations featured in The Times Top 100 Graduate Employers increased by 4.3% in 2018, following a drop in graduate recruitment in 2017 in the aftermath of the UK’s vote to leave Europe. The great news for final year graduates is that places are expected to grow in 2019-20, with 11 out of 15 key graduate industries planning to intake. The Coronavirus might have impacted this insight since the report was written.
Competition for graduate recruiting is very tactical. Work experience schemes have become an integral part of recruiting new graduates. Early-year students eager for placements are put through the same measures as graduates. Once a placement has been successfully completed, recruiters are able to offer a graduate position, often a full year before they are due to leave university. Sneaky.
According to, Highflyers 2019 graduate report, one-third of graduate employers said:
‘that a graduate who’d had no previous work experience at all with any employers would be unsuccessful during their selection process, irrespective of their academic achievements or the university they had attended.’
This means graduate recruiters start the process much earlier, make relevant experience mandatory and still use qualifications and university as the precedent. Yet 76% said, ‘Achieving diversity targets’ was their main priority last year, and 50% cited, ‘Achieving social mobility targets’. Something doesn’t add up. Diversity still remains an issue.
Potential not pedigree
Graduate programmes, internships, apprenticeships, co-ops and placements are prevalent across all Fortune 500 companies. When Financial Times investigated graduate recruitment, ‘more than 4 in 10 of the graduates hired were privately educated, even though 90% of graduates come from state schools and women continue to be under-represented.’ However you look at this, it seems unfair. To address diversity in early careers, businesses need a recruitment strategy step-change. Recruitment teams need to look past qualifications to potential by prioritising a candidate’s skills, strengths, and achievements. What’s the harm in moving away from career fairs and events that don’t create positive diversity outcomes? Accenture, number 1 on Refinitiv’s Diversity and Inclusion index, has made that step-change. The early talent team looks further than Russell Group universities fairs. They’ve changed their sourcing methods, removed minimum UCAS points and they host their own prospective candidate events.
But what about people without degrees? Richard Branson, Michael Dell, even Larry Ellison (founder of Oracle) – they are without college degrees but all multi-billionaires. Que apprenticeship solution – could this be the most effective route to a diverse organisation? We like to think it has potential.
All aboard the apprenticeship levy
Slowly organisations are coming to the conclusion that diversity can be achieved most effectively by apprenticeship programmes. Apprenticeships are proven to bring a greater mix of socio-economic backgrounds to the workforce. Many of the world’s biggest graduate employers use apprenticeships to tackle diversity in the top ranks of professional life, according to recent research by the Institute of Student Employers. Despite the evidence, Apprenticeship levy uptake fell far short last year. The BBC reported that:
“From May to December 2019, 4,991 employer accounts gave up a total of £401m which they could have used to train apprentices.”
Introduced in 2017, the levy makes employers pay £3m each year to set aside 0.5% of their payroll for apprenticeship training. Companies are blaming the underspend on the apprenticeship levy’s complexity and inflexibility. However, the UK Government is looking to improve the levy this year to, “improve the working of the Apprenticeship Levy, to support large and small employers in meeting the long-term skills needs of the economy.” Great news for Gen Z job seekers. But is the feeling mutual when our younger generations are severely lacking in loyalty?
For Millennials and Gen Z loyalty is a tricky issue
There is conflicting information out there on Gen Z and millennial loyalty – experiences differ from business to business. The fact remains: people today are less committed to an organisation in comparison to 50 years ago when our parents and grandparents had jobs for life. According to the Work Institute Employee Retention Report, ‘More than 27 out of every 100 U.S. employees quit voluntarily in 2018.’ The report calculates a loss of $617 billion to employee turnover. Now that’s expensive. Similar retention challenges ring true in the UK. Deloitte’s Global Millennial Survey 2019 discovered that:
“More millennials than we have ever surveyed—49 percent—would, if they had a choice, quit their current jobs in the next two years. In our 2017 report, that number was 38 percent.”
Why are organisations unable to engage such a high number of millennials? Deloitte’s report also suggests:
“there were strong correlations between those who plan to stay in their current jobs and those who said their companies deliver best on financial performance, community impact, talent development, and diversity and inclusion.”
War for talent – has everyone lost?
Graduate programmes continue to evolve to fit the needs of the candidate because the power has truly shifted in their favour, we are living in a ‘candidate-driven market’. This isn’t new news. What is new is the next iteration – diversity first in a candidate-driven market. In a recent report by Alexander Mann Solutions, ‘Early careers recruitment: What are the opportunities from digitalization, STEM and Diversity & Inclusion?’. The report suggests that recruitment and early careers is where diversity is the most important. In the report, Liz Wessel, Co-Founder & CEO of WayUp said:
“They’re now saying, okay, I’m respected and I actually want to give them my time. Most companies think of their early career pipeline as a big part of their diversity initiatives, because it can be so hard to find diversity at later career stages,”
We would have to agree with this sentiment: we believe that there is a strong connection between top-performing D&I companies and incredibly well-executed graduate schemes. We’ve used data to drive this statement.
Next-gen diversity study
We researched the top 100 companies on the Refinitiv Diversity and Inclusion Index and found that 75% offer graduate programmes, 52% offer internships, 39% offer apprenticeship programmes, 8% offer co-ops, and 66% reference diversity and inclusion on their website careers section.
The discovery that 75% top-rated D&I companies deliver graduate schemes is interesting, but not ground-breaking. Large organisations tend to have more resource to invest in diverse talent, and at higher volumes. 66% of top-rated D&I companies have dedicated diversity pages or D&I is stated in their values or culture pages. Again – this is not a surprise, considering these are companies awarded for their diversity efforts.
So where’s the link? Well, I believe there is a strong connection between successful early talent programmes and diversity, that can be uncovered by analysing graduate and intern feedback. Our hypothesis was that positive early career experiences contribute to companies delivering outstanding diversity outcomes. Why? Because organisations that invest time, energy and resources into upskilling and engaging the next generation are also designing inclusive experiences from day one. We used Glassdoor reviews to help us understand the relationship between positive early career experiences and organisations with top-performing diversity scores.
We found a total of 235,139 Glassdoor reviews on Refinitiv’s top-rated D&I companies, achieving an average score of 3.6 out of 5 across all functions. We then filtered to show only Graduate reviews (1,340) for these companies, bringing the average up to 3.87 out of 5. When we looked at Intern reviews (1,341), the average was higher still at 4.15 out of 5. When we merge graduate and intern reviews for the top 20 most diverse companies, the average is 4.18 out of 5. The feedback results are overtly positive.
Glassdoor review ratings aren’t conclusive evidence but a strong indication of the link between the successful delivery of diversity, inclusion and early careers programmes. To conclude, I thought it might be useful to focus on one of the top 20 D&I companies that achieve great glassdoor ratings. I picked one outstanding example – Diageo.
Diageo – your diversity muse
Diageo is among the top-rated by graduates and interns on Glassdoor. I compared Diageo early careers’ offering with Deloitte’s Global Millennial Survey 2019 to find out if Diageo was delivering exactly what people want from their early career. The crossover is significant. The report states that Millennials and Gen Z want to have a positive impact on society, the ability to travel, flexibility, commitment to professional development and a strong diversity and inclusion strategy.
Here’s what Diageo said about their graduate programme:
“At Diageo we know that for our business to thrive and for Diageo to realise its ambition, we depend on having diverse talent with a range of backgrounds, skills and capabilities in each of the 180 countries in which we operate and to reflect our broad consumer base.”
Diageo is also pioneering in social mobility initiatives. For example Diageo’s, ‘Learning Skills for Life programme’ delivers employability skills, specialist training, and work experience within the hospitality industry. To date the scheme has had over 700 participants across different cities, delivering more than 43 classes. Inclusion and diversity practices are embedded throughout the programme and it shows with 72% female participants and 88% candidates of ethnic diversity. Learning Skills for Life graduates have experienced a 90% placement rate in internships or full-time jobs.
Diageo is innovating, investing in employees, meeting their expectations and treating them like adults. Diageo has a diverse workforce that is retained and maintained for longer – for early talent to both grow the business and grow within the business. It is clear to us that Diageo, among the major of the D&I top 20, also believes that diversity needs to begin in early careers.
Let’s conclude with a final quote from the Institute of Student Employers CEO, Stephen Isherwood:
‘In the last five years the proportion of graduate recruiters focused on improving social mobility has tripled to more than 70%’.
Do you feel ready, like Refinitiv’s top D&I companies, to graduate with first-class honours in diversity? How do you compare? Do you think there’s more you could be doing for diversity in early careers programmes? We’d love to continue the conversation – get in touch.
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With major brands like Accenture publicly supporting our mission, Headstart is already improving the recruitment experience for candidates around the world.
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