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In today's world, the importance of diversity in the workplace has become more critical than ever before. With a rapidly changing global economy and workforce, companies that embrace diversity and inclusion (D&I) are proven to be more successful and profitable than those that do not.

The numbers speak for themselves. According to a study by McKinsey in 2019, companies in the top quartile for gender diversity on their executive teams were 25% more likely to experience above-average profitability than companies in the fourth quartile. The same study found that companies in the top quartile for ethnic and cultural diversity on their executive teams were 36% more likely to experience above-average profitability than companies in the bottom quartile. This highlights the fact that diversity is not just a moral issue but also a business imperative. By embracing diversity, companies can improve their bottom line and create a competitive edge in the market.

So, there is no doubt diversity is very important. A diverse workforce leads to a broader range of perspectives and ideas. When employees come from different backgrounds, cultures, and experiences, they bring a wealth of knowledge and insights to the table. This can lead to better problem-solving, more creative thinking, and ultimately, better decision-making. Additionally, a diverse workforce can help a company connect with a wider range of customers and clients, leading to increased revenue and market share.

However, It's not just about having a diverse workforce, but also about creating an inclusive culture where everyone feels valued and respected. A diverse workforce without an inclusive culture is not enough. Employees must feel comfortable being themselves and bringing their whole selves to work.

It's important to note that diversity and inclusion are not just buzzwords. They are a crucial part of creating a successful and sustainable business model. Companies that embrace diversity and inclusion are more likely to attract and retain top talent, improve employee morale, and create a positive public image. Furthermore, by embracing diversity, companies can connect with a wider range of customers and clients and develop a competitive edge in the market.

However progress, overall, has been slow in D&I (Diversity & inclusion).

In a report “Global Gender Gap 2021”, the World Economic Forum revealed that the global gender pay gap will not be closed until 2186 and progress towards gender equality has been slowed even though organizations have shown their best intention to fill the gap.

Similarly, McKinsey in its 2021 report on “Race in the workplace: The Black experience in the US private sector” found that Forty-three percent of Black private-sector workers earn less than $30,000 per year, compared with 29 percent of the rest of the private sector. In addition, Black workers tend to be in the industries with the largest frontline labor forces.

These data demonstrate achieving diversity and inclusion in the workplace is not always easy. It requires a commitment from leadership and a willingness to make changes that may be uncomfortable or difficult. Some of the key challenges include:

  1. Unconscious bias: Unconscious biases are inherent attitudes or stereotypes that can influence decision-making, even if individuals are not aware of them. These biases can lead to unintentional discrimination and can hinder efforts to create a diverse and inclusive workplace.

  2. Limited candidate pools: In some industries, the candidate pool for certain positions may be limited, making it difficult to recruit diverse candidates. This can be particularly challenging in fields such as STEM, where women and people of color are underrepresented.

  3. Resistance to change: Some employees may resist efforts to create a more diverse and inclusive workplace, particularly if they perceive such efforts as a threat to their own status or position within the organization.

  4. Lack of leadership support: Achieving diversity and inclusion requires the support of leadership. If leaders are not committed to promoting diversity and inclusion, it can be difficult to create a culture that embraces these values.

  5. Ineffective recruitment practices: Traditional recruitment practices may not be effective in attracting diverse candidates. Organizations may need to rethink their recruitment strategies to reach a broader pool of candidates. They also need to consider providing the right skill-based training to existing employees who come from underrepresented communities and offer them opportunities for upward mobility within the organization, including transitioning to middle-wage paying jobs. This strategy can become particularly powerful as it can address a company's talent shortage while also saving significant costs associated with external hiring. Additionally, it promotes the creation of a truly inclusive and equitable workplace for all employees.

  6. Lack of role models: In some organizations, there may be a lack of diversity among leadership positions, which can make it difficult for employees from underrepresented groups to envision themselves in leadership roles.

  7. Stereotyping and microaggressions: Even in diverse workplaces, individuals may still face stereotyping and microaggressions that can create a hostile work environment and hinder efforts to create an inclusive culture.

It's important for organizations to recognize these challenges and take proactive steps to address them. This may include implementing unconscious bias training, developing more effective recruitment practices, and creating a culture that values diversity and inclusion at all levels of the organization.

There should be a systematic approach and bold steps to strengthen diversity & inclusion.

To promote diversity and inclusion in the workplace, companies need to focus on several key areas:

  1. Diverse Talent: Companies should prioritize the representation of diverse talent in executive, management, technical, and board roles. They need to create a robust business case for inclusion and diversity that's tailored to their specific organization, and prioritize multiple forms of diversity, not just gender and ethnicity. They should set data-driven targets to ensure diverse representation.

  2. Leadership Accountability: Companies should hold core-business leaders and managers responsible for promoting inclusion and diversity, beyond the HR function or employee resource-group leaders. They should strengthen the inclusive-leadership capabilities of managers and executives and ensure that all leaders are held accountable for progress on inclusion and diversity.

  3. Equality of Opportunity: To create a level playing field for all employees, companies need to deploy analytics tools to ensure that promotion and pay processes are transparent and fair. They should de-bias these processes and strive to meet diversity targets in their long-term workforce plans.In addition to that, companies should take responsibility to provide education assistance programs to entry-level employees to get the opportunity of upward mobility and middle-wage jobs.

  4. Tackle Discrimination: Companies need to have a zero-tolerance policy for discriminatory behavior such as bullying and harassment. They should help managers and staff to identify and address microaggressions and establish norms for open and welcoming behavior. Leaders and employees should assess each other on how they are living up to these standards.

  5. Foster Belonging: Companies should build a culture where employees feel they can bring their whole selves to work. Managers should communicate their commitment to multiple forms of diversity and support employee resource groups to foster a sense of community and belonging. Companies should explicitly assess belonging in internal surveys.

Overall, a systematic approach and bold steps are necessary to strengthen diversity and inclusion. The importance of diversity in the workplace cannot be overstated, and it is crucial for organizations to recognize the challenges and take proactive measures to address them. By creating a diverse and inclusive workplace, companies can attract top talent, improve employee morale and retention, and ultimately, achieve greater success and profitability. But above all, making diversity a priority isn’t just good business, it’s the right thing to do.

Contact us at to learn how we can help your organization build a stronger foundation for diversity and inclusion in the workplace. Visit our website for more information.

Do you know that as an employer, you can provide tax-free educational assistance to your employees? It's true! The Internal Revenue Code (IRC) has a provision that allows employers to offer educational assistance programs that are tax-free up to a certain limit.

Outline of IRC Section 127

Section 127 defines educational assistance as the payment of expenses incurred by the employee for education, including tuition, fees, books, supplies, and equipment, and the provision of courses of instruction. This is a very broad definition!

Section 127 outlines the criteria for employers to provide educational assistance programs to their employees. According to this section, employers can exclude from their employees' gross income up to $5,250 annually that is paid by the employer for educational assistance if the assistance is provided under a written educational assistance program that meets certain requirements.

One of the requirements is that the program must be for the exclusive benefit of employees and not discriminatory in favor of highly-compensated employees or their dependents. The program must not offer a choice between educational assistance and other remuneration that is includable in gross income. Eligible employees must be notified of the availability and terms of the program.

Under Section 127, employers can provide educational assistance to their employees as a tax-free benefit. This means that the employer does not have to pay payroll taxes, such as Social Security and Medicare taxes, on the amount of educational assistance provided. In addition, the employer does not have to withhold federal income tax or state income tax on the amount of educational assistance provided, as long as the assistance meets the requirements of the tax code.

Furthermore, providing educational assistance can also be tax-deductible for the employer as a business expense. The expenses incurred by the employer in providing educational assistance to employees, up to the annual limit of $5,250 per employee, can be deducted from the employer's taxable income. This can result in a reduction of the employer's tax liability, which can be beneficial for the business.

Empower Your Employees with Educational Assistance Programs

Employers have many strategic reasons to offer educational assistance programs, such as recruiting and retaining high-quality employees, enhancing workforce skills, and boosting employee engagement.

Moreover, educational assistance programs can help address skill gaps in the workforce, leading to increased productivity and higher-quality work. By providing opportunities for ongoing education and training, employers can invest in the long-term success of their employees and their organization as a whole.

In addition to the benefits for employees and the organization, educational assistance programs can also improve branding efforts, showing potential candidates and customers that the organization values education and employee development. Some companies, such as Intel and Booz Allen Hamilton, even use educational assistance programs as part of their branding efforts.

It's important for employers to follow the rules outlined in Section 127 to ensure that their educational assistance programs qualify for tax-free treatment. By doing so, employers can provide a valuable benefit to their employees while also receiving tax benefits. So, if you're an employer, consider offering educational assistance programs to your employees and help them achieve their educational goals.

Solve Talent Gaps and High Turnover with Educational Programs

Creating an educational assistance benefit program is a critical task for HR, as it can serve as a powerful tool to achieve an organization's human resource objectives and address its problems. The HR team should design educational programs that align with their organization's strategic goals and objectives, as employees who complete these programs should expect career development opportunities and enhanced marketability.

There are two significant human resource problems that many companies face today, particularly in sectors such as Retail, E-commerce, Healthcare, and Manufacturing. Firstly, high frontline employee turnover rates, which can average around 90 days, are a considerable challenge. One of the key reasons for this is the lack of employee loyalty due to marginal salary increments, which can be as low as $0.25 per hour. Secondly, companies in these sectors require entry-level tech employees to fill positions within their IT department, product team, or data analytics team. The cost of hiring these resources externally can be a significant burden on the company's finances, leading to talent crises and skills shortages.

To solve both these problems simultaneously, HR should design an educational program that creates an internal pathway for frontline workers to learn skills and technologies that are required to fill these talent gaps. This will give employees an incentive to stay with the organization, as they can develop their careers and upward mobility within the company. Additionally, these trained employees can be deployed to relevant tech and product jobs to fill the talent crisis gap, saving the company millions of dollars.

However, HR must present a strong business case to senior leaders who may not be aware of the cost-effectiveness of such programs. If leaders support the idea, HR should design a benefits package that suits the organization best. External support may also be necessary to structure or conduct the program effectively, and this can include taking help from third-party organizations or experts. The program should be tailored to meet the organization's unique needs, and it should not look like any other corporate training program.

According to Sean Segal, CEO of Escalate, a Techstars backed company which enables its clients to conduct education assistance programs,

“ The education program should include asynchronous learning so that frontline workers can learn as per their availability. Still, it should be cohort-based and with live-instructional support to avoid becoming an isolated journey. Furthermore, the organization must ensure that the program delivers the expected competitive advantages in terms of recruiting, development, retention, engagement, and other relevant factors, and the program's management should be facilitated by appropriate technology and metrics.”

In summary, educational assistance programs are a win-win for both employers and employees, providing valuable benefits and opportunities for career development to employees. As an employer, you can offer tax-free educational assistance to your employees under Section 127 and at the same time you can enhance workforce skills, boost employee engagement, and address skill gaps in the workforce, among other benefits.

If you want to learn how Escalate is helping organizations to design and conduct effective educational assistance programs and get benefits of Section 127, contact us at Visit our website for more information.

Frontline jobs, as opposed to college, are actually the common entry point for most Americans into the workforce. These jobs represent about 70% of the US workforce. t Unfortunately, they often act as both the starting and ending point for many workers. According to a report by McKinsey in 2022, there is a vast discrepancy between workers' ambition and their ability to advance, with only one in four workers able to progress.

The front line is a significant but often neglected opportunity for companies, given that it comprises approximately 112 million workers. Companies must assume the responsibility of supporting these workers by providing them with opportunities to move into higher-paying jobs that offer more fulfilment. Improvements to career advancement can have a considerable impact on millions of workers' lifetime earnings, job experience, and progress.

Many of today’s solutions do not work. US companies need to devise innovative ways to promote upward economic mobility for their frontline workers. In fact, the best way for these workers to advance is by transitioning to different jobs within the same company. Companies can offer well-defined opportunities to workers, coupled with comprehensive training, to enable them to move from initial frontline positions to more secure jobs with middle-class incomes and more promising career prospects.

According to a 2022 report by Gartner, there is projected to be a 9.3% increase in enterprise spending on software and a 5.5% increase in IT services spending in 2023. Despite reports of layoffs among tech companies, most of the fired employees are not in IT positions, according to Computerworld. The dearth of tech talent remains, with over 145,000 IT job vacancies projected for 2023.

This talent shortage presents a viable opportunity for companies to provide upward economic mobility to frontline workers. If adequately trained workers fill entry-level tech jobs, companies could save millions of dollars in new hiring.

There are several reasons why companies should take this prospect seriously:

  1. Cost-effective solution: Hiring and training new employees for entry-level tech jobs can be costly and time-consuming. On the other hand, investing in the training and upskilling of existing frontline workers is cost-effective because they already possess knowledge of the company's operations and culture.

  2. Improved employee retention: Offering opportunities for career development and advancement can improve employee satisfaction and retention. Upskilling frontline workers for tech jobs not only demonstrates a commitment to employee development but also provides a clear career path within the organization, which can motivate employees to stay with the company.

  3. Fosters innovation: Frontline workers have a deep understanding of the company's operations and are often closest to customers. By training them for tech jobs, companies can tap into their creativity and innovation to develop new solutions and improve processes.

  4. Improved productivity: Equipping frontline workers with access to new technologies can enhance their performance, leading to improved productivity, reduced costs, and increased profitability.

  5. Addresses skills gap: With the rapid advancement of technology, many companies are experiencing a skills gap, with a shortage of workers possessing the required digital skills. By upskilling frontline workers for tech jobs, companies can address this gap and ensure they have the talent necessary to remain competitive.

  6. Promotes diversity and inclusion: Many frontline workers come from diverse backgrounds and may have missed out on opportunities for education and career development. By providing training and opportunities for career advancement, companies can promote diversity and inclusion, ensuring that all employees have access to the same opportunities.

In conclusion, companies can play a crucial role in supporting their frontline workers' upward mobility by investing in their training and development. By upskilling frontline workers for tech jobs, companies can achieve cost savings, improve employee retention, foster innovation, boost productivity, address the skills gap, and promote diversity and inclusion.

Ready to help your frontline workers unlock their full potential?

Get in touch with us at to learn how our solutions can create opportunities for career advancement and boost your organization's success.

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