DE&I: Strengthening the Case for Business Diversity
Whether businesses are looking to attract investors, explore fresh talent pools or improve employee retention and productivity by creating a more inclusive environment, DE&I has rapidly shifted from nice-to-have to must-have status.
It’s a shift that’s firmly anchored by data. A 2020 McKinsey report – the third in a series investigating the business case for diversity – shows that the link between diversity and financial outperformance is increasingly compelling. The consultancy’s analysis found that companies with the most ethnically and gender-diverse executive teams were likely to be significantly more profitable (36 percent and 25 percent more, respectively) than their less diverse counterparts.
However, the study also highlights the relatively slow pace of progress. Although US and UK companies have made energetic strides towards greater diversity, with female representation on executive teams rising by five percentage points in the five years to 2019, progress measured across the global data set was more disappointing, recording a single percentage point improvement in the two years to 2019. It’s a similar picture for ethnic-minority representation, with global executive appointments rising from 12 to just 14 percent in the same period.
Moving from the ‘why’ to the ‘how’
As organisations move the conversation from why diversity matters to how best to implement DE&I so that it becomes embedded in company culture, they need to establish a roadmap to success, setting out the necessary steps to reach their goals.
One way to accelerate the pace of progress is to recruit talent from more diverse sources – even if it means reinventing the methods that have served companies well in the past.
‘I make sure I’m in the room at every key hire, asking recruitment agencies how they’re sourcing candidates,’ says Annette.
‘Executive searches often operate through established contact networks, but recruiters need to show that they’re able to use a broader range of tools to bring in more diverse candidates – and business leaders need to be prepared to ask those difficult questions.’
It’s a sentiment echoed by Tine Arentsen Willumsen, Chief Executive of Above & Beyond Group, and fellow Learning Xchange panellist:
‘Acting inclusively starts with the executive team and involves building a balanced talent pipeline, as well as committing to a more flexible and inclusive workplace,’ says Tina. ‘Moving the needle is hard, so initiatives must be well resourced.’
Tine has a stark warning for companies dabbling in DE&I: ‘If you don’t take it seriously, you will lose out on talent.’
Fostering equality, openness and belonging
HR measures alone aren’t enough to shift the dial, though. When it comes to implementing DE&I strategies in the workplace, companies should place business leaders and managers at the heart of the endeavour, with initiatives connected to strategic and normative objectives.
Linking diversity with equity and inclusion is important. On its own, representation isn’t enough; employees need to believe they belong and see equality and fairness of opportunity in their workplace in order to stay and thrive.
The common thread among companies with a strong diversity agenda is their commitment to taking bold steps to strengthen inclusion through everyday actions – debiasing the everyday processes that can unwittingly create schisms between staff. Even where companies already consider themselves to be diverse, evidence shows that focusing on creating a highly inclusive culture and promoting inclusive behaviour has the potential to achieve far richer rewards.
Further, organisations should focus on advancing diverse talent – beyond gender and ethnicity – into executive, management, technical, and board roles. Companies should build an inclusive culture where all employees feel they can bring their whole selves to work by fostering a sense of community and belonging.
Learning Xchange panellist Anne Lebel is Chief HRO of Capgemini. She spoke about the need to create a safe environment that supports the recruitment and professional development of a more diverse workforce:
‘Targets are important because they increase awareness of progress,’ Anne says.
‘But companies need a strong set of policies in place, ensuring that recruiting, promotion and succession planning processes include a fair representation of all groups and are based on competencies and not affinities.’
Strengthening leadership accountability
All leaders should be held to account on DE&I progress.
Shiela Vinczeller, Chief HRO at Aptar and Learning Xchange panellist, shared her views on tasking the leadership team with DE&I delivery goals.
‘Senior leadership sets the tone for the organisation when it comes to DE&I,’ Shiela says.
‘It’s not a grassroots movement; unless senior leaders are committed, it won’t work. All policies, processes and practices need to reflect a company’s diversity aspirations and targets.’
That said, no single individual can push an entire enterprise in the right direction on their own – and it’s too easy for other managers to believe that they don’t need to pay it any attention because it’s already within someone else’s purview.
A purpose-driven leadership team can create a cultural shift that gives everyone an investment in improving DE&I and, once it’s part of the board agenda, reporting on progress becomes a business imperative. Add to this a requirement for transparency – openly sharing the results of DE&I initiatives – and all employees can feel empowered to help effect change.
Absent action and accountability, even the best-intentioned DE&I programmes may slip behind other priorities before they’ve had chance to make any meaningful difference.
The value of persistence shouldn’t be underestimated. Those organisations that make the choice to keep the momentum going, setting bolder targets each year, are the ones most likely to succeed in their DE&I aspirations. And, as economies all over the world begin to emerge from the Covid crisis, the value of diverse talents has never been higher.
Companies and their leaders should seize this moment to consolidate the DE&I gains they’ve made and to accelerate the creation of inclusive and agile cultures that will help them to prosper in the future.