Failure to pursue diversity and inclusion in the workplace poses serious risks to businesses.
Diversity and inclusion (D&I) – from the gender pay gap to cases of discrimination over race, disability, sexual orientation, religion, belief or age – is an issue that has dominated the news recently.
And while there are legal obligations under anti-discrimination legislation, which are the stick to encourage firms to fully embrace D&I, the carrot is just as persuasive.
A 2018 study from McKinsey, Delivering Through Diversity, found that companies in the top quartile for diversity in gender are 15% more likely to financially outperform their peers than those in the bottom quartile.
And those in the top quartile for ethnic diversity are 35% more likely to post better financial performance.
And the benefits are not just financial. A diverse workforce leads to diversity of thought and understanding – and an ability to reflect a diverse customer base.
The bottom line, says Miriam Earley, Director, HR Programmes at JLT Management Services, is that “employees that feel valued and able to be themselves are more engaged, are more likely to stay and to work harder”.
Businesses that fail to embrace D&I will struggle to attract and retain the best talent – something that is increasingly important as more and more companies embrace, for example, digital technologies. “If you do not have an inclusive business how are you going to be able to future proof your business as digital demands increase?” says Earley.
“Insurance is for example on the verge of change, as it starts to embrace digital platforms and artificial intelligence, and needs to attract those with different skill sets than in the past. Will the talent with those skills want to work in insurance and see people that look like them in our workplace?”
External risks are tied in with reputation and projection, warns Earley. “Does the make-up of your workforce reflect that of your customer base – in terms of, for example, gender, race, religion or social background?
“To coin a well-used phrase, if your staff are predominantly pale, male and stale – are your customers? Are your competitors more diverse, more in-tune with your customer base than you are?”
Follow through with diversity and inclusion strategy
So, faced with both financial and legal drivers, what should, or perhaps shouldn’t companies be doing? A common mistake, and perhaps the major one, says Earley “is to treat D&I as an initiative and to rush out to sign up to external programmes such as Stonewall and Outstanding”.
She adds: “These are all good initiatives but on their own they won’t have any major impact and don’t get to the root of the issue.
“If your company makes a big song and dance about a new D&I initiative but then nothing happens in the workplace to follow this up, you are over promising and under delivering – and we all know how that impacts morale.
“You have to follow through. A D&I strategy needs to be woven into everything that you do and engage all staff – from the shop floor through to the board.”
Tackle unconscious bias
One very practical step all companies can undertake is to address the issue of unconscious bias (UB) – something we all carry with us no matter what our background.
Earley says: “UB is not about prejudice but more fear of the unfamiliar. It cannot be eradicated all together but there are several actions you can take to mitigate its impact in a business setting.”
To put it in simple terms, if you come from a two-parent family home, where your father worked, and your mother was mainly at home, you may unconsciously associate men with careers and jobs, and women will be seen as more related to the home.
This affinity bias – and it works for all backgrounds – means that we tend to hire people like ourselves as we think, unconsciously, that it will be easier to work with them.
“But, of course, that means that you end up with the same kind of people doing the same things – with no diversity of thought,” emphasises Earley.
There are now a vast array of training packages available designed to address UB and they can have a real impact. JLT has introduced online UB training to not only help educate staff at all levels about UB but provide meaningful actions they can take to mitigate it.
They include adopting different interview techniques, thinking about the phrasing of questions at interview and in staff reviews, and raising awareness of assumptions that all help treat people equally rather than based on what they look like or where they are from.
UB can also help with ensuring internal and external meetings are run in an inclusive way – ensuring peoples voices are heard and valued.
“There is D&I training for managers on direct and indirect discrimination, and what discrimination looks like from a legal perspective, but more importantly from a philosophical perspective.
“Insurance, for example, is a sector, like many others, with a lot of banter – and training can help ensure this remains on the right side of the line and is not offensive,” says Earley.
Practical steps businesses can embrace D&I
Other practical steps you can take as a business include ensuring that any mentoring scheme endeavours to match people from different backgrounds – all part of encouraging employees to widen their understanding of others such as by engaging with Lesbian, Gay, Bi and Trans (LGBT) employees or those from different religions.
Companies can also set up a diversity council or employee group – with senior management and staff from across the organisation – to talk about and raise issues and ideas for staff events and initiatives around D&I.
Firms can also affiliate themselves with progressive external initiatives and hold internal or local events to tie into national awareness days, such as Pride or Mental Health Awareness Week.
At JLT, for example, Earley explains: “We have embraced mental health, which is an issue that impacts one in four people in the UK at some time in their lives – no matter what their gender, race, religion or social background.
“We have put in place a mental health awareness framework using our intranet, helping managers and colleagues recognise anxiety in others and providing advice and support, including training for mental health first aiders. This is a long-term plan not a quick fix.”
And talking of long term, Earley warns that gaining senior management buy-in to any D&I strategy is crucial. “Without the support of senior management any D&I policy is destined to flounder,” she warns.
D&I is something that every business needs to embrace and weave into the fabric of their organisation if they are going to attract, retain and inspire talent; have products and services that relate to their customers; and remain competitive in an ever-global marketplace.
But you have to have both parts – both diversity and inclusion warns Earley. “There is evidence that companies are good at attracting and recruiting a diverse workforce – but those employees simply don’t stay with the organisation if they don’t experience inclusion when they get there.”
As US D&I expert Verna Myers has said: “Diversity is being invited to the party; inclusion is being asked to dance.”
It is about empowering people by respecting and appreciating what makes them different, in terms of age, gender, ethnicity, religion, disability, sexual orientation, education and national origin.
It is an organisational effort and practices in which different groups or individuals having different backgrounds are culturally and socially accepted and welcomed, and equally treated.
These differences could be self-evident, such as national origin, age, race and ethnicity, religion/belief, gender, marital status and socioeconomic status or they could be more inherent, such as educational background, training, sector experience, organisational tenure, even personality, such as introverts and extroverts.
In simple terms, diversity is the mix and inclusion is getting the mix to work well together.
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For further information please contact Miriam Earley, HR Programmes Director on +44 (0)20 7528 4525