Diversity and inclusion programmes help companies drive innovative results. Yet many industries still struggle with diversity and inclusion, often failing to attract diverse talent due to inclusivity issues in the workplace. For organisations looking to shape up their diversity and inclusion (D&I) programmes and policies, the change can be challenging, but also rewarding. Most companies enact change to deliver business value, and many who launch diversity and inclusion initiatives cite research showing that companies with more diverse teams outperform those with a more homogeneous workforce.
As 2018 research from McKinsey shows, greater diversity in the workforce results in greater profitability and value creation. The same holds true at the executive level, as McKinsey found a statistically significant correlation between diverse leadership and better financial performance. Companies in the top quartile for ethnic diversity at the executive level are 33% more likely to have above-average profitability than companies in the bottom quartile. When it comes to gender diversity, companies in the top quartile are 21% more likely to have above-average profitability than companies in the bottom quartile, according to McKinsey’s research.
While financial performance is a major driver of diversion and inclusion strategies, some organisations launching diversity initiatives in the face of government compliance regulations or to address shareholder pressure. In the United Kingdom, for example, companies are required to publish their diversity statistics. Organisations are also realising that make diversity and inclusion a business imperative will help them avoid tarnishing their reputation.
During 2020 and so far in 2021, many companies, including McDonald’s, Microsoft, Boeing, and Best Buy, made pledges to improve diversity hiring practices and introduce diversity and inclusion (D&I) training. The hiring of D&I professionals in general increased, too; more than 60 U.S.companies appointed their first-ever chief diversity officer (CDO). However, much of this work has not yet taken root. In one recent survey, 93% of leaders agreed that the D&I agenda is a top priority, but only 34% believed that it’s a strength in their workplace. In another survey, 80% of HR professionals viewed companies as “going through the motions.” In other words, they didn’t notice any significant positive impact from the organisations’ actions. Another survey revealed that while 78% of black professionals believe senior leaders’ D&I efforts are well-intentioned, 40% hear more talk than action and have not noticed material changes to policies or culture. Meanwhile, many CDOs leave their roles because of a lack of strategic, financial, and political support.
One-off D&I “initiatives” do not effectively address these long-standing disparities. Instead, leaders should infuse D&I throughout their organisations. Based on our experience and research, we have developed five strategies that can turn diversity and inclusion into an improved employee experience and a strategic advantage for the enterprise.
Change starts from the CEO positions
The CEO needs to take a public stance, embed D&I in the organization’s purpose, exemplify the culture, and take responsibility for progress toward goals. They need to be out front, even if a CDO is part of the team.
PwC’s U.S. chairman, Tim Ryan, has been an exemplar for at least five years. He co-founded CEO Action for Diversity and Inclusion after police shootings in the summer of 2016 to spur business executives to collective action on D&I. The publication of PwC’s workforce diversity data in 2020 revealed that women and people of color are underrepresented, especially at senior levels, showing that even the most dedicated companies still have a lot of diversity and inclusion work to do.
Nielsen’s CEO, David Kenny, added the CDO title to his leadership portfolio in 2018 so he could “set hard targets for ourselves and make those transparent to our board and measure them like we measure other outcomes like financial results.” He relinquished that title to a new CDO in March 2020, noting the D&I progress his team had already made.
Diversity and Inclusion Should Be Key Part OF Business Strategy
D&I is far more than an “HR issue.” It should be a core ingredient in the design and execution of business strategy and embedded in the activities of the organisation day in, day out. Increasing the number of non-white individuals involved in the strategy process will help develop a core purpose that better reflects a broader group of customers and employees. It also gives the organisation more opportunities and places to succeed.
Alex Gorsky, chair and CEO of Johnson & Johnson, who has put diversity and inclusion at the center of his pursuit of sustainable competitive advantage, said, “The best innovations can only come if our people reflect the world’s full diversity of individuals, opinions, and approaches.” A diverse design group is more likely to create products and services that work for a diverse clientele, avoiding biased assumptions, generalizations, or shortcuts. When organizations test products and services on a diverse group of potential clients and employees, it’s easier to identify the variations necessary to enhance the adoption of the final offering. And, when a company has an enterprise-wide D&I strategy, leaders can use it to guide the selection of operating ecosystem partners that are aligned with its D&I intentions.
Every Voice Should be Welcomed, Heard and Respected
Most often employees quit jobs when they feel that their authentic self and uniqueness is not appreciated or valued. As such, it is vital to create an environment where they feel a sense of connectedness to the company and its people. Employees need to feel free to express themselves based on their unique perspectives.
When it comes to supporting diversity and inclusion in the workplace, don’t play favorites, practice basic courtesy, and pay special attention to how you can embrace non-discriminatory practices and policies. Employees feel included when they feel “safe” to voice their concerns and opinions without fear of victimization. The freedom of expression without fear also empowers companies to not just listen to but also actively embrace diverse viewpoints.
One great way to do this is to invest in a workforce communications platform. By integrating all your communications channel into one platform, you will reach each worker on their preferred channel. You will truly help your workforce feel connected and included in larger company initiatives and goals. Also, you will gain insights from unified analytics to understand how best to meet their needs and help them thrive. And you’ll provide a personalized employee experience that is inclusive and allows all voices to be heard.
Today, millennials make up the vast majority of the workforce. Having a workforce that recognizes and accommodates multiple generations is essential in building a diverse and inclusive workforce. And while millennials are generally known for being tech savvy, bear in mind this generation encompasses ages 22 to 38. The older millennials might not have the same proficiency with tech tools as their younger counterparts. You can really see this at work in communications practices. Sometimes certain employees are more comfortable using social channels, for example, or group chat functions. On the other hand, employees of older generations might not embrace such communications channels so readily.
Again, communications professionals can invest in a workforce communications platform to easily and efficiently create and send messages via channels that employees prefer; this will help communicators craft messages that will appeal to all generations, and encourage engagement. There’s widespread agreement on the need to improve diversity and inclusion in the workplace. But it’s not easy to deliver on the promises made. It’s time to adopt a more systematic, coherent approach. By following these strategies, leaders can make more progress and create a more representative, fair, and high-performing workforce.
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