The Disappointing Truth About Diversity and Inclusion for U.S. Manufacturers

The U.S. Manufacturing Workforce Conundrum

Even though two-thirds of surveyed U.S. manufacturers have focused on recruiting and retaining women and/or minorities for a number of years, these strategies have not improved diversity in the sector.

Instead, the manufacturing sector employs fewer women than it did 20 years ago, and the number of black workers also shrank slightly during the same period. Men make up 71% of the manufacturing workforce, while their labor force participation rate is only 53%.

Demographic Groups as a Percentage of Manufacturing Employment, 1995 vs. 2015
Percent

Shifts in the U.S. labor force in the next 10 years will not be insignificant and more U.S. workers will identify as a minority. At the same time, the widening manufacturing skills gap will make it increasingly difficult to find skilled workers. These forces could have a catastrophic impact on manufacturers’ ability to hire and retain top talent.

The Business Value of Diversity and Inclusion

An effective diversity and inclusion strategy supports recruiting and retaining talent as well as business performance. Creating an inclusive work environment that promotes fairness and equality that in turn helps engage employees. The trickle-down effects of employee engagement are well known, including improved business results, customer satisfaction, and productivity—all top objectives. Yet fewer than half of manufacturers have a firm understanding of the returns they should expect from their investments.

Business Understanding of Diversity and Inclusion’s Value
Response percentage (n=55)

Competing Priorities Divert Attention From Diversity and Inclusion

Competing priorities impede the progress of diversity and inclusion efforts at many committed companies. This shouldn’t come as a surprise given the relentless need to achieve the business objectives communicated to shareholders. As a result, short-term trade-offs are often made in favor of other objectives, including revenue, cost controls, and productivity. This often has damaging effects in the long run.

Not all businesses face this challenge. Those that have standardized their approach to diversity and inclusion, have established a clear business case for their investments, and measure their performance are best positioned to stay the course even in the face of headwinds.

U.S. Manufacturers' Diversity and Inclusion Programs Are Emergent

Unfortunately, few businesses have embedded their diversity and inclusion strategies and tactics within their workflow; more than 80% approach improvements and programs in an ad hoc manner. The few that have embedded diversity and inclusion into their culture ensure that senior leaders and employees understand that it is a crucial business driver.

To integrate and strive for cultural adoption of diversity and inclusion practices with the business, diversity and inclusion leaders should develop a cohesive strategy that sequences investments in diversity and inclusion according to their current phase of maturity:

Diversity and Inclusion Attributes
By Execution Phase

This type of investment requires a thoughtful plan, patience to resist the urge to pursue too many changes and programs at once, and a collaborative leadership model that underscores that diversity and inclusion are everyone’s job, not simply another human resources initiative. Manufacturers Alliance members can learn more about the current state of diversity and inclusion at U.S. manufacturers in the full report.