Creating a workplace where employees are engaged and collaboration comes easily is the dream of many managers. To achieve that, it is essential to nurture inclusion and embrace diversity.
Plenty of research already backs up the fact that a more diverse workforce directly influences the bottom line. Companies with a more diverse executive team, for example, are significantly more likely to have higher profits, according to a 2018 McKinsey report.
A more diverse workforce also helps solve two of the most pressing challenges facing businesses today – enabling enterprises to find the right people for the job and boosting their innovation efforts.
Broadening the scope
Before demonstrating the outcomes of having a diverse workforce, it is first important to examine what we mean by diversity.
While the focus is often on race and gender, a truly inclusive workforce should also consider age, cultural norms, economic status and sexuality. Jill Ader, chair of Egon Zehnder, a global management consulting and executive search firm, told delegates at this year’s World Economic Forum at Davos that companies rarely consider sexuality in their inclusion policies. Yet a 2017 UNAIDS study estimated the global cost of LGBTI discrimination at $100 billion per year.
Businesses have an important role to play in respecting and protecting human rights through the workplace inclusion of LGBTI people, according to the World Economic Forum’s Partnership for LGBTI Equality. And Ader says firms must create a safe space where people feel able to be themselves and where everyone is empathetic and curious about other people.
While businesses are well aware of the gender gap, the disability gap is not given anywhere near as much attention, despite the fact that more than 1.3 billion people in the world live with some sort of disability – visible or not.
At Davos, activist and humanitarian Edward Ndopu, one of 17 advocates for the United Nations Sustainable Development Goals, spoke about the challenges of growing up with a disability. At the age of two, he was diagnosed with Spinal Muscular Atrophy and given just five years to live. He defied the prognosis, got a degree from Oxford University and is now aiming to be the first person with physical disabilities in space.
Self-actualization and occupying positions of power is crucial, he believes, to enable people with disabilities to be part of the discourse in changing the globe. “We are graduating from the notion that [embracing diversity] just requires legal recognition. We are here and we’re going to break the doors wide open.”
“I don’t want to underestimate the gains we have made, but we need cultural, social and economic recognition. The fight needs to include the totality of who we are as human beings.”
Solving the talent problem
Almost a third of senior leaders say finding talent is their most significant managerial challenge and Gartner says the emerging talent shortage is now the top emerging risk facing organizations. Left unchecked the talent shortage could result in $8.5 trillion in unrealized revenues by 2030.
A diverse workforce where potential employment candidates can recognize similar people and feel they could fit in is key to attracting talent from a wider pool. At one panel at Davos, Jonas Prising CEO of Manpower Group said that the talent exists but that the problem lies in the lack of diversity in the hiring process: “We all need to work hard to remove bias and create a culture of conscious inclusion,” he explained.
The first step on the road to attracting more diverse talent is recognizing the existing diversity within an organization, making sure that equal opportunities are promoted and given to all.
At the same session, Finland’s prime minister Sanna Marin said female leaders should become the new normal. Marin said it needs to be seen as normal to have different generations and genders in power and it’s up to everybody to make sure that happens. It is not a ‘women’s issue’ she said but ‘a people issue’. However, there is still a long way to go: According to the Global Gender Gap Report 2020, it will take 100 years for gender parity to be reached at the current rate.
Put simply, initiating a strategy for a diverse workforce gives companies a much wider pool of talent from which to pick, helping solve the talent crisis.
Diversity drives innovation
Alongside recruiting talent, the success of companies also rests on their ability to be innovative and embrace and use the abundance of resources – human capital, technology, and so on – to drive the business forward.
Workplaces full of like-minded people are not the best recipe for driving new thinking and innovation. But when people come from diverse backgrounds they offer different perspectives. Not only will this help companies come up with innovative solutions, but it also ensures they create products that are aligned with the diverse customer base.
Research has shown that people with diverse experiences and backgrounds are better at solving problems than homogeneous groups. This is not just because they have a broader base of information, but also because the differences force people to prepare better, anticipate different viewpoints and realize that finding a consensus will take effort.
And a Forbes Insight survey of senior executives found overwhelming backing for the claim that a diverse and inclusive workforce is crucial to providing the different perspectives needed to power an innovation strategy.
For instance, two years ago, toy company Mattel decided to launch a line of dolls that were going to be marketed to African-American girls. In order to ensure that the dolls were culturally sensitive, senior management enlisted the aid of Mattel’s African-American Employee Resource Group to advise and guide the marketing team through the launch of the product. Today, it is one of the company’s best-selling, minority-focused brands.
A critical investment
Diversity and inclusion has moved from a concern limited to HR professionals to one that sits on the board agenda. It is not a ‘nice to have’ but is a crucial part of building and operating a business that engages its employees and meets its customers’ needs.
As Microsoft CEO Satya Nadella says, his company needs to “look like everyone and every organization in the world”.
He believes that the difference in the way that people are brought up, their different backgrounds and cultures all influences the way they think and is crucial to what makes the company tick.
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Business & Technology Services
TCS’ Business and Technology Services organization combines the power of business excellence with digital innovations to help enterprises and leaders be purpose-driven and performance-oriented, making the shift from shareholder value to stakeholder value. By harnessing the abundance of data, talent, connectivity and capital, B&TS helps leading companies around the world build ecosystems that fuel growth and innovation, foster collaboration and engagement across ecosystems, improve health, safety, and well-being, enabling empowerment and inclusivity, and driving sustainability and positive environmental impact.