Over time, Diversity has moved beyond compliance, and has evolved to become a priority from a business strategy perspective as well. Studies have shown that companies with diverse senior management achieve greater commercial success; supporting research by the University of Maryland and Columbia University showed that female representation in top management leads to an average increased firm value of $42 million.1
“Diversity is more than any one gender, race, or ethnicity. It’s richly representative of all people, all backgrounds, and all perspectives. It is the entire human experience.”, states Denise Young Smith, Vice President of Worldwide Human Resources.2 In order to fully integrate diversity within an organisation, it’s important that executive leadership takes action to challenge cultures making companies more diverse, as well as supporting women and minorities already employed; Attraction, Retention & Advancement.
“Diversity is more than any one gender, race, or ethnicity. It’s richly representative of all people, all backgrounds, and all perspectives. It is the entire human experience.” Denise Young Smith, Vice President of Worldwide Human Resources.
Attraction is a two-fold issue; Employers need to make their Employer Value Proposition (EVP) more inclusive in order to attract diverse candidates, as well as adapting the hiring process.
With women starting to saturate the workforce, and studies indicating the huge untapped financial potential of inclusive policies, companies should look to prioritise diversity. Microsoft has gone so far as to link bonuses to diversity targets, in order to truly incentivise senior management to make this issue a top business priority.3
“Technology is key when removing unconscious bias, and not just in the recruitment process.”
However, they are not always successful; implementing for the sake of implementing is not the answer either. Facebook, for example, went to great lengths to tackle its diversity issue, including a hiring program targeting female, black and Latino software engineers. Nevertheless, due to a complicated hiring process, diversity across the company barely changed, despite the significant investment.4
It is often not enough to put diversity strategies in place if there are issues internally, which might prevent diverse candidates’ progress. Diversity must be a genuine business priority with the support of key internal stakeholders in order to make headway. Google’s CEO Sundar Pichai says; “Technology is key when removing unconscious bias, and not just in the recruitment process – it can also help when it comes to performance management, where employees are scored based on their achievements and objectives, meaning management can make key hiring decisions and promote based on performance only.”5 Companies need to take time to understand their diversity goals; keep the hiring process simple and manage expectations. Taking small steps at the start of a culture change will give companies a more realistic chance of success.
Beyond attraction of talent; employers must look at how effectively they retain these candidates.
“52% of women working in tech eventually leave the sector and are 45% more likely than their male peers to leave the industry within the year.”
Research has shown that many women and professionals of a minority background are getting into good technology jobs, but often leave to pursue other opportunities. A recent Harvard Business Review report found that 52% of women working in tech eventually leave the sector and are 45% more likely than their male peers to leave the industry within their first year.6
Figures from Gartner predict that by 2020, 75% of large enterprises will be using inclusion enablement criteria as a prerequisite when they select Human Resource Management Systems.7 In addition, smart technology is likely to take over from the traditional diversity survey, and this will give real-time insight into a company’s diversity, allowing them to monitor it against KPIs.
There are a variety of ways to develop a workplace that supports retention. For 2017, four to consider that are top priorities for diverse talent are:
Flexible working comes in many facades and does not have to mean working from home. Time off in lieu; annualised hours; compressed working hours and job sharing are all other options that could be explored. In a recent study of over 1,000 hiring professionals, 27% agreed that it would be flexible working options that would most entice talent into roles over the next five years.8
“27% agreed that it would be flexible working options that would most entice talent into roles over the next five years.”
When businesses embrace diversity, they flourish. Recent research from Catalyst revealed that employees actually become more innovative when they feel included. The Inclusive Leadership: A View from Six Countries report found that employees who felt included went above and beyond what was expected; breeding innovation and ultimately profitability for organisations.9
Inclusion training is essential for employee buy-in. From induction and on-boarding right through to organic on-going training, there are a number of opportunities to engage employees with a diverse EVP inclusion message; demonstrating how being inclusive benefits them and the company as a whole. Exit interviews are also invaluable tools for gaining grass-roots level feedback on the efficacy of your diversity and inclusion strategies.
“…diversity and inclusion need to get to a similar place that health and safety now is in the workplace – i.e. to be fully integrated into an organisation’s daily routines.”
Diversity and inclusion principles only truly succeed when they are hardwired into an organisation; according to the BBC’s Diversity & Inclusion Manager Toby Mildon; speaking at a CIPD conference at the end of 2016 “…diversity and inclusion need to get to a similar place that health and safety now is in the workplace – i.e. to be fully integrated into an organisation’s daily routines.” Inclusion should be taken seriously from board level, down, and the commitment to inclusivity should filter through every management strata of the business.
Many companies have initiated Employer Resource Groups (ERGs) as part of their inclusion strategies; for true success it is important for these groups to be viewed as profit centres (investments) rather than cost centres (expenses).10 In addition, they should not be implemented to solely satisfy CSR targets – instead, as part of wider inclusion training program.
Women in senior positions have an impact on the rest of the business; research shows that women who take over from male CEOs and chief executives have increased sales of up to 14% per employee.
“52.5 million Employees are now identified as millennials, with around 40-50% of these millennials representing female employees.”
52.5 million Employees are now identified as millennials11, with around 40-50% of these millennials representing female employees; according to figures from the Pew Research Centre. In many cases female millennials are more ambitious than previous generations of women, says a study by PWC.12
Issues such as work/life balance and diversity are at the forefront for the new generation of workers. Employers need to re-educate senior management, helping to adapt the working environment to minorities, rather than believing this diverse talent should adapt to their surroundings.
A female CEO has also been shown to have an effect on the advancement of women – with a woman at the helm of a company increasing the salaries of the high-performing women by around 10%, according to research.13
Boost your inclusive talent strategy in 2017
An inclusive culture is about more than just policies – it’s about making genuine changes to the way your company operates. Figures from McKinsey show that diverse organisations outperform their less diverse counterparts by as much as 35%.14 Employees who are part of this new breed of hyper-integrated companies are 70% more likely to report having a new market share, and 45% more likely to have increased market share.15
“Diverse organisations outperform their less diverse counterparts by as much as 35%.”
Keep diversity on the agenda
Despite all this, a recent HBR study reported that diversity programs aren’t actually increasing diversity.16 This is thought to be because some companies are simply ‘ticking boxes’ with their diversity programs, rather than genuinely embracing the idea of a collaborative, dynamic culture.
If you’re looking to increase the diversity of your organisation, why not contact Phaidon International today?
During 2017 Phaidon International is continuing the Inclusive Talent series exploring the issues being faced by companies and producing “How to” guides for employers faced with such challenges regarding diversity in the workplace. View further details about the Inclusive Talent series here and follow @PaidonIntl and the hashtag #InclusiveTalent on twitter for more updates on the series.