Awareness

Do hiring goals still matter? Yes, especially if building a racially equitable and inclusive workplace is the goal

The Racial Equity Dividends Index (Index) is a comprehensive analytical tool developed by the Center for Economic Inclusion that helps businesses measure their progress toward building a racially equitable and inclusive workplace. This post explores the research behind the standards in the Index, and how implementing these policies and practices can help close the racial wealth gap in Minnesota.

Shoreé Ingram

By Shoreé Ingram,
Managing Director, Employer Services and Consulting

In 2022, just 35% of companies participating in the Racial Equity Dividends Index indicated that they set enterprise-wide goals for hiring, retaining and advancing Black, Indigenous, Hispanic, and Asian people in their organizations.

This racial equity standard is one of the most important ways that companies can make real structural change in their organizations. A key lever for this permanent structural change is organizational responsibility—when leaders take responsibility for reaching these goals.  

Studies have found that setting specific goals for hiring, retaining, and advancing workers of color is a highly effective strategy for increasing the racial diversity of an organization’s workforce, especially for management-level roles. This practice has a stronger demonstrated impact on workforce diversity than efforts to create mentorship networks or trainings to reduce bias and discrimination.

While setting the goal is the first step, creating shared accountability across the organization toward achieving these goals is the immediate second.  

What Gets Measured, Gets Done

Companies need to have mechanisms in place not just for measuring progress, but for supporting and holding leaders accountable for developing, implementing and resourcing those anti-racist strategies, and actions needed to achieve goals.

Here are three examples of racial equity standards companies can incorporate into goal setting:

  • Hiring, retention, and advancement questions in managers' annual performance evaluations.

  • Holding specific strategy sessions with managers on a quarterly, biannual, and annual basis to review progress.

  • Offering performance bonuses to managers based on their success in meeting hiring, retention, and advancement goals.

Goals combined with resourced action plans with clear accountabilities will achieve and sustain positive organizational change critical to a racially equitable and inclusive workplace.

Companies increasingly understand the benefit of goal setting to increase racial and ethnic diversity in their organizations and cite research that shows commitment in practice to racial equity and inclusion positively shapes perceptions of culture and work environment for all employees.

Research also shows that companies with teams made up of diverse backgrounds not only benefit from improved financial performance, but are more innovative, able to evolve to meet current market demands and compete in a global economy. This study cited diverse teams are more likely to challenge ideas and rely closely on facts with less likelihood of mistakes or errors. 

Maintaining the Commitment 

While setting goals, and putting action and accountability plans in place are critical, companies need to also maintain this commitment not just during times of stability or growth, but when grappling with economic downturns. Historically during economic downturns, including from 2019 to 2020, Black and Brown workers are too often the first to be laid off or fired, and the last ones hired.

A company and our region’s commitment to racial equity and economic inclusion must be centered in an understanding and commitment to what data has already showed us: we all benefit when we are all included and able to fully participate in our economy.  

Do hiring goals still matter? Yes! Set those goals and be accountable for measurable progress toward a racially equitable and inclusive workplace where every employee thrives .

The Center is ready to help you kick-start and achieve your hiring goals through participation in the 2023 Index. Let’s build!

To learn more about how your company can use the Index to build enterprise-wide goals for hiring, retaining and advancing Black, Indigenous, Latino, and Asian people in your organization, register online by February 24. 

Promoting Racial Equity Through a Child Tax Credit

Betsy Ohrn

By Betsy Ohrn, Director of Research

As tax season ends, we highlight the important work that is being done to build equity in the tax code. One critical piece of legislation is Child Tax Credit-- a benefit that would provide significant critical resources to Black and brown families.

We are extremely excited to see this policy included in Governor’s Walz’s budget proposal. This is a unique opportunity to invest in families and promote racial equity across Minnesota.  

In 2021, as part of the American Rescue Plan Act (ARPA), Congress established its first near-universal child benefit in the form of an expanded, monthly CTC. This CTC contributed to a decline in child poverty rates by over 40%. While there was hope the CTC would be made permanent, federal inaction has left it up to the states to continue this critical effort.  

The Governor's proposal follows a similar structure by providing a fully refundable tax credit for children younger than 18 years old and older kids with qualifying special needs. This proposal is estimated to benefit more than 360,000 families and would provide significant ongoing resources directly to families to help cover critical expenses and get their kids off to a strong start. The policy also boosts family income flexibility so families can spend the money where they most need it. 

Analyses find that a tax credit like this could impact 463,000 children, almost 38% of children in the state. It would cut child poverty in Minnesota by 25 percent and lift 22,500 children out of poverty. 

Furthermore, we know that a higher proportion of Minnesotan children are Black, Hispanic, Indigenous or Latino, about 33 percent, compared to 22 percent of all residents. For this reason, investing in Minnesota children, especially those with fewer economic means, is an investment in a racially equitable and inclusive economy.

In 2019, 11 percent of kids in Minnesota were living at or below the poverty line, but studies looked at that number by race and cultural community. The poverty rate for Somali children in Minnesota sits at around 57 percent, 58 percent for Burmese children, 31 percent for Mexican, 29 percent for Hmong, and at 32 percent for African American children. A CTC would make a significant impact on these communities.  

We are excited to learn more about the governor’s proposal and see the details discussed in the legislature. We encourage policymakers to follow the key design principles laid out by ITEP including making the credit fully inclusive, working to offer the credit as a monthly payment, and phasing it out by income.

Help make this historic investment a reality!  

Find and call your legislator and/or sign your organization on this letter to state policymakers coordinated by: Children’s Defense Fund-Minnesota, Legal Services Advocacy Project, Minnesota Budget Project, & Minnesota Catholic Conference, urging them to step up for our families and children by creating a state Child Tax Credit - modeled on the federal expanded CTC’s success – in 2023. 

The letter below will be shared with Governor Tim Walz and members of the Minnesota Legislature at key moments in the policy debate. 

Let them know you support this meaningful step in enhancing the economic inclusion and well-being of children in Minnesota! 

  • Want to know more about "The Whiteness of Wealth?" Check out this important and powerful discussion with Dr. Dorothy A. Brown we held last January in partnership with the Minnesota Department of Revenue: "Unleashing the power of the tax code for equity."

Racial Justice Begins with a Transformational Bus Ride

Rebecca Toews

By Rebecca Toews, Communications Manager

When Jeanne Crain stepped onto the bus for the Reckoning for Truth, Trust, and Racial Justice Tour, organized by the Center for Economic Inclusion, she felt it would be a useful experience for her as President and CEO at Bremer Bank. What she didn’t realize before she joined a cross-sector cohort of peers in Selma, Alabama, was how truly transformational the experience would be both personally and professionally. 

“I was blind to so many aspects of how pervasive lynching was, and how many individuals it affected… how many individuals were unnamed, and also how [lynchings] were celebrated community events,” says Crain. 


Through a series of powerful yet intimate experiential opportunities spanning four days, Crain and 46 other executives leading Twin Cities-based organizations, immersed themselves in a small sampling of the history of Black people in the United States. They traversed the historic route between Montgomery and Selma, culminating in a reflective walk across the Edmund Pettis Bridge, scene of the now infamous events of Bloody Sunday.

“I was left speechless by this experience,” says Eve Onduru, VP of Marketing and Business Development with the Center for Economic Inclusion. “As a person from Kenya, I had obviously understood that my people were taken from their homes and forced into slavery, but I had not ever come so close to the places and stories. I could feel the presence of those whose backs this country was built on.” 

That is exactly the impact that Center Founder and CEO Tawanna A. Black and team had in mind when they evisioned the tours. “The tour is designed not only to share the history of racial exclusion and slavery in the United States, but more importantly, to help those in attendance to reckon with that history— to reflect with one another as a group and build accountability that will help them go back to their organizations and build truly equitable workplaces for their colleagues and employees,” says Black. 

Center staff member and tour facilitator Tiffany W. Worsley said the team wanted participants to sit in the truth of America from a physical and heart position. “We wanted to offer participants an opportunity to reckon with and ignite transformative antiracist change in Minnesota.” 

“We often hear, in Minnesota, that racism isn’t a problem because chattel slavery wasn’t allowed here, but racist acts and policy exist here in MN,” says Wilson-Worsley. “Participants told us about many light bulb moments of the role White supremacy plays in every aspect of their organizations. We know they left the tour truly understanding why they are responsible for creating equitable workplaces here in Minnesota.”

This experiential peer learning tour to Montgomery, Alabama invites participants to uncover a deeper understanding of the legacy of slavery and Jim Crow racism inherent in today’s racial disparities. The tour also sheds light on how the underpinnings of the Civil Rights movement must live on in our relationships, decisions, and investments today to catalyze new cross-sector anti-racist outcomes for the future.  

“Participants walk away from these tours understanding that although there is a shortage of opportunity in communities of color, there is no shortage of talent, innovation, or brilliance,” concludes Wilson-Worsley. “Investors and employers who join us have a unique opportunity to grow our region’s economy in measurable ways and to see an ROI by investing directly in Black communities.” 

Who are your subcontractors? Why organizations at the forefront of racial equity are measuring Tier 2 supplier diversity

Maggie Dalton

By Maggie Dalton, Senior Analyst

Buying goods and services from businesses owned by Black, Indigenous, Latino, and Asian people enable companies to benefit from new ideas and access new markets. That’s why more leaders in the private and public sectors are recognizing that their organization's supplier base is a critical lever for building a racially equitable economy.

A racially diverse local supplier pool can bring greater resilience and new resources into historically underinvested communities, building individual and community wealth. But robust supplier diversity efforts go beyond valuing racial diversity among direct suppliers — these efforts recognize that a supplier's subcontractors, or Tier 2 suppliers, matter, too.

That’s why one of the racial equity standards in the forthcoming 2023 Racial Equity Dividends Index is: Does your organization measure the racial diversity of its Tier 2 suppliers?

Standards related to procurement show some of the greatest opportunity for improvement among organizations who participated in the 2022 Racial Equity Dividends Index.

Just 39% of organizations who participated in the 2022 Racial Equity Dividends Index have an enterprise-wide practice of collecting and sharing data on the racial diversity of suppliers. Measuring the racial diversity of Tier 2 suppliers is a new standard for 2023.

Supplier diversity programs, which seek to build a diverse supplier base within organizations, have existed for decades, though it remains an area of business practice that is quickly evolving. Many businesses are just beginning their supplier diversity journeys, leading to a real competitive advantage for those who focus on diversifying in this area.

Research finds that diverse suppliers increase innovation, competition, and resilience throughout the value chain and unlock additional value, both for businesses and regions through increased business activity and economic growth. Moreover, investing in minority-owned businesses is investing in building prosperity in Black, Indigenous, Hispanic, and Asian communities.

Due to historic patterns of underinvestment, Black, Indigenous, Hispanic, and Asian-led firms often have smaller revenues and staff than white-led companies and may be better positioned to start with smaller contracts and grow. Also due to their smaller size, these businesses are the ideal candidates for subcontractors or to deliver on specialized requests that primary contractors are unable to provide. Investing in minority-owned businesses as Tier 2 suppliers can provide on-ramps for suppliers of color, enabling them to grow, scale, and add capacity over time.

Beyond tracking Tier 2 spend for themselves, research from the Center for Economic Inclusion finds that procuring companies have the ability to influence Tier 1 suppliers to track and adopt measures of their own progress in subcontracting across their entire portfolio with businesses owned by people of color, therefore further expanding their influence.

For example, in 2019, Ford launched the Widening the Inclusion Network (WIN), designed to “further develop their existing supplier diversity programs through coaching, mentorship, and thoughtful partnerships with other diverse businesses.” Ford is leading the way by investing not only in businesses, but in relationships.

At the Center, we help companies implement promising practices to build racial equity for their workers and their communities. The Racial Equity Dividends Index is one tool we offer to help businesses measure their progress toward building a racially equitable and inclusive workplace.

The Index includes 43 racial equity standards across seven categories that support racial equity in workplaces: Leadership; Hiring; Culture, Retention, & Advancement; Procurement; Philanthropy & Investment; Public Policy; Products & Services.

We know many companies are leading the way in tracking Tier 2 supplier diversity as a part of growing supplier diversity initiatives.

Encourage your company to join the movement and evaluate progress towards building racially equitable and inclusive workplaces – workplaces that pay dividends for everyone.

If your company is interested in taking the next step to measure and continue building a racially equitable and inclusive workplace, be sure to register for the 2023 Index by March 10 to receive your confidential results and find out how your organization compares to others in your industry.

How the Racial Equity Dividends Index Helps Companies Build Racially Equitable and Inclusive Workplaces

Index Registration Open Through March 8

In January 2021, the Center for Economic Inclusion (Center) launched the first-ever Racial Equity Dividends Index (Index), a comprehensive analytical tool to help companies assess how their current policies and practices position them to win on racial equity and advance business goals, while also identifying opportunities for improvement. Since then, more than 100 public and private organizations have used this assessment to navigate their efforts to close racial wealth gaps.

We sat down with Nathan Arnosti (Director of Analytics and Index project lead) to talk about the Index, now open for registration through March 8.

Nathan Arnosti

What is the Index?

(Nathan) The Racial Equity Dividends Index (Index) is an analytical tool designed to support private-sector businesses in their journeys to build racially equitable and inclusive workplaces. The Index offers companies an intuitive, comprehensive, and measurable roadmap for progress on racial equity.

How can my business register for the Index?

(Nathan) First, eligible companies – currently, all private-sector organizations with offices in Minnesota – register online for the Index at the Center’s website. Then, once registration closes on February 24, registered businesses will receive the 2023 Private Sector Index survey and have approximately four weeks to complete it.

What information is gathered through the Index survey?

(Nathan) Through a series of multiple-choice questions, the survey asks companies to report their progress against 43 racial equity standards spanning seven dimensions of company operations, such as hiring, procurement, leadership, and products and services. It also provides companies the opportunity to gather and share data on workforce demographics and supplier spending.

What happens next?

(Nathan) The survey responses inform two sets of analytical Index products that are delivered to participating companies. First, participants receive a customized score report that provides their full answers alongside peer comparisons and recommendations developed by the Center for Economic Inclusion, so that companies can learn what their strengths are and where opportunities lie. Next, companies are included in the Racial Equity Dividends Index Report that aggregates responses across companies, identifying trends, elevating promising practices and case studies, and celebrating leading employers in each category. The 2022 Index report is available on our website.

Why is it important for companies to participate?

(Nathan) Spurred by the murder of George Floyd by Minneapolis police officers and the largest protests in American history in 2020, businesses pledged to reshape existing practices and committed record-setting investments in historically disadvantaged Black, Indigenous, Hispanic, and Asian communities.

At the same time, we know that businesses often lack a roadmap for what racial equity can look like or clear standards against which to measure their actions. They also have very limited information about how their actions compare to peers.

The Index is a tool designed to meet these needs – to help companies make tangible, durable progress towards building racially equitable and inclusive workplaces that drive innovation, productivity, retention, and belonging.

Who is the target audience?

(Nathan) We’ve designed the Index for all private-sector companies in all industries. In our experience, companies with at least 50 employees find the Index most valuable.

In 2022, companies of all sizes participated in the Index -- executive recruiting firms with fewer than 100 employees, to manufacturing companies with several hundred or thousand employees, to Fortune 500 companies, like Best Buy or 3M.

This Index offers companies the opportunity to learn from one another, regardless of sector or size, and I see that as a key part of its value. Participating companies were particularly compelled by the opportunity to assess their results alongside similar employers in a customized sector report.

What were some of the biggest learnings from the Racial Equity Dividends Index?

(Nathan) We learned that there is a tremendous appetite among private-sector leaders for analytical tools that offer a clearly defined, measurable roadmap to build racially equitable workplaces. In its first year, 40 companies that collectively employ more than 200,000 Minnesotans participated in the Index, even though it was a novel and unprecedented initiative. We’re excited to connect with even more businesses to encourage them to participate and take advantage of the Index this year.

QUESTIONS

For more information about the Racial Equity Dividends Index, please see the registration page, FAQ page, download the Index brochure, or email us at index@centerforeconomicinclusion.

What’s New: Introducing the 2023 Racial Equity Dividends Index for the Private Sector

Nathan Arnosti

By Nathan Arnosti, Director of Analytics

A year ago, the Center for Economic Inclusion launched the inaugural Racial Equity Dividends Index (Index). The Index surveys participating companies on their policies and practices related to 43 Center-identified racial equity standards that span seven dimensions of company activity.

Participating companies receive customized score reports that help them assess their strengths and opportunities on racial equity, understand how they compare to peers, and chart a roadmap for further action. Additionally, a public Index report identifying high-scoring businesses, trends, and case studies is published on the Center’s site as a free resource for companies.

Forty companies of all sizes – from Fortune 500s to enterprises with fewer than 100 employees, and collectively employing more than 200,000 Minnesotans – participated in the Index last year. With the results of this index in-hand, these organizations have used their unique results to focus their efforts to drive racial equity forward within their organizations.

The Center offers the Index to companies on an annual basis. We believe that to sustain excellence, the Index must adapt to reflect new research and thinking on standards that best advance racial equity within companies.

These are several of the questions that the upcoming 2023 Racial Equity Dividends Index for the Private Sector seeks to answer:

  • How many businesses in Minnesota no longer use a new hire’s salary history to determine their salary?

  • Do businesses provide hourly workers with consistent schedules and the ability to work full-time?

  • Does your organization measure the racial diversity of its Tier 2 Suppliers (your suppliers’ suppliers)?

What’s new in 2023

After we published the 2022 Index results last June, I led a team of Center colleagues to revisit and re-evaluate our racial equity standards. Integrating feedback we received from participating companies, new research which included the Center’s own research on racially equitable procurement and policymaking practices, and emerging models from racial equity practitioners,  the 2023 Index offers the following additions:

New sections to collect data on racial equity outcomes at your organization. In these sections, participating companies report on critical datapoints related to their workforce and supplier diversity, including: 

  • Racial demographics of their workforce at different levels, including senior leadership, supervisors, all full-time staff, and all part-time staff;

  • Number of workers by race who earn family-sustaining wages, are hired, receive promotions, and depart; and

  • Number of and total investment in Black, Indigenous, Hispanic, or Asian-owned suppliers.

These sections will not count towards an organization’s score, but we believe they will provide invaluable insight into baseline outcomes of participating companies compared with peers, which will be shared with each organization in their confidential Index score report

Seven new racial equity standards. Our team has developed new standards related to the use of salary histories during hiring processes, protocols to ensure that Black, Indigenous, Hispanic, and Asian-owned businesses are considered in requests for proposals, corporate transparency around lobbying efforts, and more. We believe these new standards will shed new light on the opportunities for building – and benefitting from – racially equitable workplaces.

Revisions to several existing Index standards. Based on feedback we received from participants, new research, and an analysis of 2022 results, we’ve revised a handful of standards so that they offer clearer, more compelling insights. The 2023 Index gathers more specific data on the action businesses take to reduce bias within the application process, benefits they offer their employees, and efforts to provide antiracist training to employees. We’re excited to share these revised standards with participating companies in the 2023 Index survey.

We believe the 2023 Racial Equity Dividends Index is the tool that companies need to strengthen and deepen their existing efforts to build racially equitable and inclusive workplaces – and benefit from the innovative ideas, increased productivity, improved retention, and higher satisfaction and engagement that can result.

The updates we’ve made to the Index over the past six months further strengthen its value. Dismantling racially inequitable systems and building organizations and economies that benefit all of us is a daunting undertaking. With tools like the Index to support and accelerate the efforts of dedicated leaders within organizations, we believe that progress is possible.

Registration for the 2023 Racial Equity Dividends Index for the Private Sector is open now through February 24. Don’t miss this opportunity to participate! bit.ly/2023-Index

Please see our FAQ page for additional information about the 2023 Racial Equity Dividends Index for the Private Sector and direct any questions about the Index to index@centerforeconomicinclusion.org.