Industry-leading tech companies recruit heavily from the most selective colleges and universities in the U.S., so is it any wonder that their employees lack diversity? The top 150 higher-ed institutions would have to recruit an additional 50,000 black students and 58,0000 Hispanic students each year if they want their student bodies to reflect the American population, according to research from the Posse Foundation, a New York-based organization that works to improve diversity on campus.

It’s going to take more than hiring a “diversity manager” or offering flexible work hours to attract and maintain employees from all walks of life. “In America we believe that if you work hard then you can achieve and excel and do well, but we’re challenged to realize that goal of being a meritocracy,” says Posse Foundation founder Deborah Bial. Case in point: About 1 percent of Fortune 500 CEOs are black, and less than 5 percent are women.

By focusing on networks, rather than individual hires or students, the Posse Foundation, companies and researchers offer promising solutions to improve diversity on campus and beyond into the workplace.

The Network Effect

It’s not that organizations are overtly discriminatory in their recruiting practices. The problem is that they’re doing little to confront the implicit biases that exist in workplace culture. “We all carry biases with us,” says Melanie Goldstein, a product manager specializing in culture, inclusion and diversity solutions at Kanjoya, a Silicon Valley-based startup that provides a workplace intelligence and management platform. “They’re deeply rooted and entrenched in our society. Even if we have the very best intentions, it’s easy for us to be drawn to and select people who are like us, and who we’ve seen in the role before.”

Brian Rubineau, assistant professor of organizational behavior at McGill University, studies how these implicit biases have ripple effects in hiring and recruiting. He and Roberto Fernandez, professor of organization studies at MIT’s Sloan School of Management, closely examine referral patterns among different demographics.

Despite the plethora of job-posting sites and career platforms and services, from LinkedIn to Hired to Indeed, most people still find jobs through informal processes. A friend of a friend mentions her company is hiring, or an alum refers a recent grad of his alma mater. This word-of-mouth recruiting accounts for more than half of job-matching in the U.S., Rubineau says.

People assume that referrals will perpetuate inequalities in the workplace—white males will refer more white males—but Rubineau and Fernandez discovered that word-of-mouth recruiting could be used to increase diversity.

To figure out how referrals could lead to more or less diversity, the researchers turned to mathematical models used in demography to study population growth. When an employee refers someone, it’s equivalent to reproduction; when they quit, it’s analogous to death. Rubineau and Fernandez generated these models using data from three different organizations where they had data on referral rates of men and women.

What they found surprised Rubineau. Men and women have similar referring rates: Men refer roughly as many men as women recommend women. The segregation effect became obvious when they looked at how often the groups referred. So what does that mean for companies? “This becomes an opportunity,” Rubineau says. “You could get the underrepresented group to refer more to counteract that segregating effect.”

Some companies are already doing this. Pinterest started asking its employees to refer women and minorities for engineering roles and has seen impressive results: Over a six-week period, the company saw a 24 percent increase in female referrals and 55 times as many candidates from underrepresented ethnic backgrounds.

Intel offers bigger referral bonuses when employees refer women or minorities, though Rubineau is quick to avoid endorsing this practice. “It’s an obvious way to build incentive, but I could see people raising challenges to that and it being difficult to defend.”

Though the duo’s research focused on gender diversity, Rubineau says the same methodology could be applied to figure out referral patterns across other categories, including race, ethnicity or disability, for instance. All companies need is data from referral bonuses, he says. Then they can figure out who’s referring whom, and can incentivize underrepresented groups to refer more frequently.

Build the Network Before Career Day

Increasing the proportion of individuals from underrepresented groups only makes a difference if those people stick around. “Too much of the focus has been on pipeline,” Goldstein says. “If you bring in a lot of great employees, but don’t have a workplace culture that’s going to be able to support them, your efforts are for naught.”

Tapping into networks to improve diversity is a method that The Posse Foundation has used since the 1980s to improve diversity on college campuses. As the story goes, Bial started the organization when she met a college dropout from the Bronx who said he never would have left school if he had his posse with him. An idea was born: “Why not send a team of kids to college so they can back each other up?” she says.

Now her foundation selects “Posse Scholars” from racially and socioeconomically diverse backgrounds with leadership potential and sends them, in groups of 10, to one of its 55 partner colleges and universities across the country. The foundation provides scholarships and support before, during and after college. This year Posse had 17,000 students nominated for 710 slots. Part of the selection process included group interviews where students demonstrated leadership skills in group activities like building robots, simulating genetic testing and creating public service announcements. “If you were in corporate America trying to hire someone for a leadership position, the traits you’re looking for are the same ones we’re looking for in a 17 year old,” Bial says.

Posse sends students to schools including Vanderbilt, Middlebury, Pomona and Dartmouth. Bial calls these selective colleges and universities across the U.S. “gatekeepers to opportunity.” “They have the power to decide who’s going to be best positioned to apply for and then secure the jobs that are most desirable. I think it’s then incumbent upon them to then care very much about how diverse their student body is.”

The idea behind Posse is that scholars will become leaders at their universities and make the schools more appealing to people in their networks with similar backgrounds.

“These schools must think about the bigger role they play,” Bial says. “The truth is there are a tremendous amount of students from every background, thousands and thousands, who are incredibly smart and capable and motivated, and despite whatever their background is can succeed at college.”

Beyond college, Posse provides career services and partners with 175 companies, including Bank of America and Viacom, to secure internships for Posse scholars. “We developing a new kind of leadership network for the U.S.” Bial says. “There is a social justice role that these colleges and universities must play if they’re going to contribute to the fabric of American society.”

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