Updates


Workplace diversity & inclusion – the business case 1

  • Is your workplace diverse? 
  • Representative of society?
  • Both in its workforce and leadership?
  • Do staff at your organisation feel valued and included?

If the answer to any of these questions is no, or you’re not sure, then this needs to become one of your company’s top priorities now. I mean it. Today!

. . . No matter how busy you are, there is no better time than now to focus on workplace diversity and inclusion. The subject has been studied in great detail. The science is robust and new studies are continually confirming and expanding on previous findings. The benefits are significant, vast and well documented and I can’t wait to share it with you. 

If you’re unsure about any of the terminology, check out our handy whistle-stop tour of terms first!

what is the business case for workplace diversity & inclusion?

The business case for a diverse and included workforce is first and foremost about legality and the pursuit of social justice (a workforce free from discrimination, which is representative of society). However the benefits go much deeper. Workplace diversity and inclusion bring innovation, improved employee satisfaction, engagement, productivity, retention and future proofing, all of which are correlated with a range of increased and considerable financial benefits.

Research shows us that companies who don’t embrace diversity and inclusion as a matter of importance and commit to improving their practices in these areas, place themselves at a competitive disadvantage. Those who invest in diversity and inclusion early also reap increased rewards as time passes, with the opposite being true for those that don’t. As McKinsey & Company summarise: ‘It is better to invest now, since winners will pull further ahead and laggards will fall further behind.’

With that in mind, let’s explore each element of the business case in detail. To do this, I’ll be sharing data from a number of highly respected global studies, which date from 2007-2019 (full details at the bottom of this blog).

I’ve subtitled each benefit, written a short intro and bulleted the findings for ease of use. Take your time to read and reflect on each because the statistics are fascinating. They reveal the state of diversity and inclusion in companies today and the incredible gains those companies experience, when they commit to these values.

Equality Act 2010 and social justice

It is against UK law to discriminate against anyone because of age, disability, race (colour, nationality, ethnicity), sex, gender reassignment, sexual orientation, marriage/civil partnership, pregnancy/maternity leave, and religion/belief. It is important companies root out biases in recruitment, management, promotional practices etc to make sure people are not being discriminated against.

Whilst we strive for equality, unfortunately inequities still exist. Minority groups (women, racial and ethnic minorities, LGBTQ+ and people with disabilities etc) are most adversely affected and suffer from under-representation in the workforce and in leadership roles, disparity of pay, as well as report lower rates of inclusion.

Studies show:

  • Women make up 12% of executive teams in the UK, despite being 50.9% of the population. -McKinsey & Co (4)
  • More than a third of companies have no women on their executive teams. -McKinsey & Co (6)
  • Only 22% of UK senior leadership teams accurately reflect the country’s racial diversity make-up. -McKinsey & Co (4)
  • 78% of employees work at companies that lack 2-D diversity (see definition here) in leadership. -CTI (3)
  • Ethnic and racial minorities and women are more likely to report that their careers have advanced slower than their counterparts. -McKinsey & Co (7)

innovation

A diverse organisation holds within it the power for innovation. The mix of different perspectives, experiences and traits means companies are primed to explore ideas beyond the status quo and potentially tap into unmet or undiscovered markets. A diverse staff that has commonalities with its customer-base, is more likely to understand and innovate for that client, as well as adapt to changing needs.

Included teams are also more confident in sharing their insights because they know their leaders value their input. In contrast, under-valued employees may have good ideas, but fail to speak up, because their leaders don’t include or encourage their contribution.

Studies show diverse and included teams are more innovative than homogenous, undervalued teams. When faced with a problem, homogeneous groups display similar thinking and this shared line of thought and agreement with one another, results in an (over) confidence in the group’s surmises. They can fail to consider additional options, because their shared beliefs lead them to think they have solved the problem.

In comparison, because diverse and included groups bring a range of differences and experiences to the table, they are more likely to deploy different thinking, have dissimilar views, disagree with and debate one another. They challenge, rather than just accept assumptions, question the status quo and consider a wide range of options when problem-solving and innovating. They’re more thorough in their problem-solving approach and more likely to innovate a successful solution.

Whilst diverse and included team discussions may not be as enjoyable, easy or comfortable as those of a homogenous group (who converse more easily and quickly because of their shared thinking), the collaborative effort to problem-solve utilising a wide range of perspectives ultimately yields better results.

Studies show:

  • Leaders with 2D diversity are more inclusive and innovative as a company than those who aren’t. -CTI (3)
  • Companies with 2D Diversity are 70% more likely to report new markets. -CTI (3)
  • Employees are 72% more likely to report that their team is not afraid to challenge the status quo, when their leaders have 2D diversity, compared to leaderships with no inclusive behaviours. -CTI (3)
  • Leaders with 2D diversity are 117% more likely to make sure all team members speak up and are heard (as reported by their employees), than leaders with no inclusive behaviours. This range of ideas, opinions and solutions can lead to market-value innovations. -CTI (3)
  • Teams with one or more employees who share a client’s characteristics (ethnicity, gender, culture or sexual orientation) are as much as 158% likelier to understand that client, and so more likely to successfully innovate for that client. -CTI (3)
  • Ideas from LGBTs, women, racial minorities and Generation Y (that could have market potential) are less likely to secure the backing they need, as 56% of leaders don’t value ideas they don’t see a need for. -CTI (3)

financial

Multiple studies highlight the financial benefits diversity and inclusion in the workplace are correlated with (especially in senior leadership teams). These include increased profitability, increased market share and the ability to tap into new markets through previously undiscovered / unmet customer needs.

Why is this? McKinsey & Co (4 and 5) hypothesise that diverse companies with a reputation for inclusion are better able to attract ‘top talent’. Given the human benefits diversity and inclusion bring, it makes sense that highly intelligent and skilled workers would want to work for these types of companies. This in turns means the companies are more innovative, produce higher quality work, maximise markets etc, all of which contributes to greater financial returns. 

Studies show:

  • Companies with more diverse workforces perform better financially. -McKinsey & Co (4)
  • Companies with 2D Diversity are 45% more likely to report increased market share. -CTI (3)
  • Companies with high employee engagement had a 19% increase in operating income and almost a 28% growth in earnings per share. -TP (1)
  • Companies with low employee engagement had a 32% decrease in operating income and earnings per share decline over 11%. -TP (1) 
  • Companies in the top quartile for ethnic diversity on executive teams were 36% more likely than companies in the fourth quartile to have above-average profitability in 2019. In 2017 it was 33% and in 2014 it was 35%. -McKinsey & Co (6)
  • Companies in the top quartile for gender diversity on executive teams were 25% more likely than companies in the fourth quartile to have above-average profitability in 2019; up from 21% in 2017 and 15% in 2014. -McKinsey & Co (6) 
  • Companies in the fourth quartile for both gender and ethnic diversity on executive teams were 27% more likely to underperform on profitability than all other companies. -McKinsey & Co (6)

employee satisfaction

Workplace diversity and inclusion, or lack of, contributes to employee satisfaction or dissatisfaction. When someone is not included at work, be it in general office chit-chat, team meetings, projects or social events etc, it affects their level of satisfaction within their role, team and the organisation. This level of satisfaction can impact on employee engagement, productivity and retention, all of which has financial implications for a company.

McKinsey & Co studied inclusion in terms of microaggressions in the workplace in 2019. Minority groups (LGBTQ+, women, ethnic / racial minorities) reported experiencing more microaggressions than other respondents. For example:

  • 39% of LGBTQ+, 34% of women, and 29% of ethnic or racial minorities reported hearing derogatory comments / jokes about people like them (versus 21% of men). -McKinsey & Co (7)
  • 30% of women, 26% of ethnic or racial minorities, and 23% of LGBTQ+ reported being excluded from social events (versus 12% of men). -McKinsey & Co (7)
  • 61% of LGBTQ+, 39% of women, and 33% of ethnic or racial minorities reported needing to correct others’ assumptions about their personal lives (versus 22% of men). -McKinsey & Co (7)

Diversity and inclusion within senior leadership also plays a role on employee satisfaction. For example:

  • Leaders with 2D diversity are more than twice as likely to ensure team members speak up and are heard, empower team members to make decisions and share credit for team success (as reported by their employees), than leaders without 2D diversity; all of which feeds into staff satisfaction. -CTI (3)

engagement and productivity

Edward Hubbard found that diverse teams properly managed and trained produce 6 times higher results than homogenous teams. When employees feel valued and included, this leads to higher levels of engagement (both individually and in teams) and in turn leads to greater productivity. 

Studies show:

  • A sense of inclusion is strongly linked with employee engagement. -McKinsey & Co (7)
  • 38% of employees are ‘disenchanted’ or ‘disengaged’. -TP (1)
  • Senior management sincerely interested in employee wellbeing is the top driver of engagement globally. -TP (1).
  • ‘Individual discretionary effort’ improves by 12% in a more diverse and inclusive workforce. -CEB CLC (2)
  • Team collaboration and commitment improves by about 50% in a more diverse and inclusive workforce. -CEB CLC (2)

retention and future proofing

In the competitive world businesses operate in, employers must do all they can to attract and retain top talent. The leaders of tomorrow are increasingly growing up in a global world. They’re taught about diversity and inclusion from an early age and want to work at companies which share these same values.

High fliers also want to work for forward-thinking, dynamic companies and with diversity being a key driver of innovation, employers who fail to make this a priority, do so at their peril. Top talent take diversity and inclusion into account when deciding where they want to work and whether or not they want to remain.

Employee turnover is costly, from advertising roles, interviewing and recruiting candidates, to inducting and training new employees. The more a company can do to make their workplace attractive through celebrating diversity, valuing their staff and all their differences, the more likely it is employees will want to stay.

Studies show:

  • Employees who feel very included at work are nearly 3 times more likely than their peers to feel excited by and committed to their organisations. -McKinsey & Co (7)
  • Intent to stay improves by 20% in more diverse and inclusive workforces. -CEB CLC (2)
  • When making career decisions, employees from all demographics have considered their organisations’ inclusiveness and would like their organisations to do more to improve inclusion and diversity. -McKinsey & Co (7)
  • 35% of employees say their organisations put too little effort into creating a diverse, inclusive environment. -McKinsey & Co (7)
  • 39% of employees turned down or didn’t pursue a job because of a perceived lack of company inclusion. -McKinsey & Co (7)

some final thoughts

The business case for workplace diversity and inclusion is strong. The only question that remains now is: What are you going to do about it?

Whilst company policies may profess a commitment to diversity and inclusion, in order to receive the incredible benefits as evidenced above, these must be put into practice. Employees need training, understanding and action on diversity and inclusion, on a regular and ongoing basis. 

Here at Enact Solutions we run equality, diversity and inclusion training which is creative, interactive, with business-relevant content. To find out more about it and the results we yield, check out our website, by clicking on the link above. We can’t wait to work with you!

research studies

  1. Source: Towers Perrin, Global Workforce Study (Report written 2008, data from 2007-2008. Data set close to 90,000 workers covering 18 countries.) 
  2. Source: CEB Corporate Leadership Council, (now Gartner), Create Competitive Advantage Through Inclusion (White paper written 2012)
  1. Source: Center for Talent Innovation, (now Coqual), Innovation, Diversity and Market Growth, ‘How Diversity can drive innovation’. (Written 2013. Data set of 1,800 professionals, 40 case studies.)
  1. Source: McKinsey & Company, Why diversity matters (Report written Jan 2015, data from studies 2010-2013. Data set of 366 public companies across a range of industries in Canada, Latin America, the UK and US.)
  1. Source: McKinsey & Company, Delivering through diversity (Report written Jan 2018, data from 2017. Data set of more than 1,000 companies covering 12 countries.)
  1. Source: McKinsey & Company, Diversity wins: How inclusion matters (Report written May 2020, data tracked from 2014-2019) Data set of more than 1,000 large companies, across 15 countries.)
  1. Source: McKinsey & Company, Understanding organisational barriers to a more inclusive workplace (Report written June 2020, data from September 2019. Data set of 1,920 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. The survey was also sent to McKinsey’s networks of LGBTQ+ senior leaders and garnered an additional 110 responses among those groups.)

Jemma Houghton


Jemma Houghton is one of our Associates at Enact Solutions. She’s passionate about people feeling respected, valued and working together to create positive results. For additional reading on this topic, check out our recent blog: ‘Diversity, inclusion, equality and equity: a whistle-stop tour of terms‘. 


Learning in the shadow of the pandemic

training and learning development survey 2020

In October 2020, amid all of the uncertainty this year has brought, we decided it would be good to know more about what’s going on for our customers and how they see the next 12-18 months of learning and development activities in their organisations. We were also intrigued to know a little about how things have been during the pandemic. So, we did an online survey.

You can read more about how we did the survey and who responded later. For now, we should say it wasn’t a rigorous ‘scientific’ process. We reached out to a selection of customers to see whether they would take part, then sent them the survey. We also shared the link via social media. In the end, we got 47 respondents. So, you should treat the results as more qualitative than quantitative, indicative rather than definitive.

outlook

Compared with this time last year, respondents were marginally more likely to feel ‘more optimistic’ (34%) than ‘less optimistic’ (26%) about the outlook for L&D activities in their organisation, though a simple majority of respondents felt ‘the same’ (40%).

“It’s been a good opportunity to recalibrate. I expect things will keep changing!”

“We’re planning 2021 to be the same as 2020 – totally remote – and will revert to normality as and when we can.”

[L&D activities have] certainly reduced for our organisation which is a shame. But I think it may well be changing as we all realise this is the new normal and working at home will continue.”

budgets

When it came to their organisational training budgets, fewer than one in ten respondents predicted an ‘increase’ (9%), though four out of ten expected it to ‘stay the same’ (40%). A sizeable minority of respondents said their budget looked likely to ‘decrease’ (30%), while others simply didn’t know (21%).

“The budget is significantly slashed for 2021 – we are really looking ahead to a much more robust business case for 2022 – evaluation is critical for this – what happened afterwards, what behaviours changed post the training not just the intention to change.”

methods

Most respondents expected the blend of training methods would change in their organisation (98%), with more online learning and development experiences taking the place of face-to-face ones. All of which makes perfect sense in the midst of a pandemic that has led to high levels of working from home (WFH).

It will be interesting to see the extent to which changes sustain in the post Covid-19 training landscape. Some respondents were clearly enthusiastic about what’s happened, while others were not quite so sure.

“Whilst there have been some negative impacts, I really like the fact [the pandemic] has forced or expedited different approaches and greater use of technology.”

“[The pandemic and WFH] has accelerated initiatives that support the ability to provide virtual/ online/ bite sized learning support, that would have taken a lot longer to implement if working business as usual.”

“As horrendous as the pandemic has been for so many people, for L&D in the NHS it has enabled virtual training to become a reality and will support more digitally enhanced delivery in the future.”

“I have been surprised at how well virtual workshops and conferences have worked – many more people are more accepting of it as a tool and it brings with it more equality and flexibility.”

“I still question if eLearning is as effective as face to face/ classroom/ experiential learning. To me it’s more of a ‘compliance, tick box’ exercise. Or am I just old fashioned?”

priorities

Selected from a list, the top three priorities training and learning development priorities respondents identified were diversity and inclusion (66%), resilience and employee wellbeing (64%), and inclusive leadership (57%).

It’s worth noting here that these priorities could well reflect the specific interests of our customers (the principal focus of our survey), rather than those of organisations in general at this time. With that said, it’s not difficult to see that many organisations will be facing unique and pressing challenges in these areas. Whether that’s in response to the pandemic and its impact on working life or because of other significant events, such as the death of George Floyd and the Black Lives Matter demonstrations.

working from home

In the first of our Covid-19 specific questions, we asked respondents roughly how many of their employees are currently working from home (WFH) for the majority of their working week. A majority of respondents, three out of five (60%), said that more than half of their workforce were currently WFH. At the top end of the scale, almost one in four respondents (23%) said that more than nine out of ten employees were WFH.

For those pondering the potential long-term impact of Covid-19 on activities like training and learning development, it’s important to note that every respondent expected more employees in their organisation will be WFH after the pandemic than did before. It is, of course, possible that face-to-face training could become one of the key ways that teams come together in the ‘new normal’, building group cohesion and team spirit, but going with online options will clearly represent the path of least resistance in a predominantly virtual workplace.

support for employees

On average, respondents gave their organisations 4.3 stars for the way they had supported employees and enabled them to do their best in the circumstances during the pandemic.

When reflecting on what else could have been done, or done better, respondents clearly recognised the unprecedented nature of the challenge represented by a global event of this kind.

“Given the sudden nature of working at home it would be challenging to say what could have been done better at the time… overall the feedback from staff has been that the organisational response has generally been positive and the interventions, communication and overall care for staff welcomed.”

“We have focused a lot actually and done largely a great job.”

“They have been quite inspirational in their handling of the situation.”

The two main areas of learning highlighted by respondents were:

  • Looking out for employee wellbeing and mental health, including how managers handled remote teams

“We underestimated the mental health impact of working from home, especially for those who live alone. Although we advised teams to have regular ‘virtual team meetings’ in the event not every team did this, and we should have monitored this.”

“Increase focus on well-being and engagement.”

“Staff surveys revealed that some staff did not receive the support from their line managers that we would have expected, which we are addressing.”

“Line manager engagement on a personal level rather than purely professional.”

  • Properly equipping employees for WFH (e.g. IT hardware, workstations, software)

“In hindsight we could have had a more efficient system of getting IT kit to people (this only took a few weeks to set up but was a cause of worry for some people).”

“Needs better IT, demanding software apps required for productive WFH are crippling many teams.”

“Risk assess workstations at home”

final thoughts

It’s clear that our survey respondents, like all of us, have been dealing with considerable upheaval and uncertainty in their working lives.

What also comes across is that they’ve not simply been battening down the hatches and waiting for the storm to pass, they’ve been adapting, trying out new approaches, and in many instances finding themselves pleasantly surprised with the results. Perhaps this is why there weren’t higher levels of pessimism about the outlook for L&D activities in the next year or so.

And, when medical science saves the day and brings this virus to heel, our survey suggests that lots of us don’t expect the world of work, and with that the ways we train, learn and develop together to ever go back to what they were.

“The pandemic has thrust us 10 years into the future.”

Training and learning development activities are going online like never before. It’s not just eLearning, it’s online training sessions and conferences. This means those creating content will need to find ways to hold an audience with access to emails and messaging, pressing tasks, and the myriad distractions of the internet. More than that, they will need to find ways to actively engage people, to help them feel and see things that will lead them to change the ways they behave and potentially even think. In that sense, the challenge for L&D professionals remains the same as ever; to help busy people learn and make a positive difference.

“We’ve already adapted hugely although it’s been a steep learning curve! It’s great to see the training sector have largely done the same, although I do have one contact refusing to take their training online (it certainly isn’t Enact). This absence of flexibility will influence me using them again.”

Which brings us to our last take-away from the survey results. The ‘new normal’ means new challenges for trainers and L&D professionals to help organisations address. Or at least, new versions of old challenges. A significant increase in WFH doesn’t just present practical ‘getting the job done’ hurdles for organisations to overcome, it brings a whole new dimension to nurturing shared values, to inclusion and helping people feel like part of a team, to coaching and helping them grow and fulfil their potential, and to looking after their emotional and mental wellbeing. As we contemplate the future, one thing’s for sure, there’s lots for us all to get stuck into.

“Biggest challenges are maintaining culture and values in an asynchronous remote working setup, without the opportunities for spur-of-the-moment, spontaneous coaching opportunities.”

“I think the interesting thing will be if / when we have more of a blend of associates who are home based, and office based. It means more effort will need to be put into inclusive meetings, etc.”

“Those who are creative problem solvers with high level of EQ have the opportunity to produce meaningful interventions.”

methodology

The online survey ran from 22 Oct to 5 Nov 2020. It was sent to 101 Enact Solutions customers who had been approached and expressed an interest in taking part. It was not a random sample. The link was also shared on social media.

In total there were 47 respondents. A majority of these were our customers, while 10 came from our social media postings.

We received responses from individuals working in organisations across a range of sectors:

  • Health, Hospital, Clinic, GP Surgery
  • Education
  • Energy, Chemical, Utilities
  • Consulting
  • Medical, Pharma, Biotech
  • Financial Services
  • Central Government
  • Manufacturing
  • Advertising/ Marketing/ PR
  • Aerospace & Defence
  • Banking & Securities
  • Local Government
  • Insurance
  • Legal
  • Retail
  • Telecommunications

Organisations ranged from SMEs to large multinationals.

David Allen


David Allen is Director of Impact at Enact Solutions.