The business benefits of promoting diversity and inclusion

The business benefits of promoting diversity and inclusion

Businesses with a healthy balance of men and women are 15pc more likely to outperform their competitors, while thosewith employees from a good mix of ethnic backgrounds are 35pc more likely, claims research by McKinsey & Co.

Combine inherent diversity – such as gender, race or age – with acquired knowledge, such as cultural understanding or language skills, and the stakes are even higher.

Increasingly, progressive businesses are embracing diversity and inclusion as a means of forging a sustainable future. Tech giant Cisco attributes its ongoing technological innovation to its diverse leadership team, while diversifying client teams has helped management consultancy, EY, to strengthen the quality of its client services and retain senior team members.

What is diversity?

Put simply, diversity can be seen as a means of differentiating people from one another, through dimensions such as ethnicity, gender, nationality, age, disability, sexual orientation, education or religion. But Farrah Qureshi, the chief executive of the Global Diversity Practice (GDP), says that it’s much more than this.

“It’s about respecting and appreciating our differences,” she explains. “The key question for companies is how to leverage those diverse perspectives, lifestyles and backgrounds to drive business success and innovation.”

She adds that in an era when firms face complex challenges and geopolitical shifts, diversity is seen as an enabler – a way to succeed in an evolving marketplace. It’s fast becoming a strategic priority.

Driving innovation

When employees feel involved, respected and connected, employers can tap into a greater richness of ideas and problem-solving approaches. This also helps companies to respond effectively to customers, attract and retain high performing employees, empower teams to collaborate, raise productivity, future-proof their businesses, and, ultimately, deliver sustainable growth.

“The business case for diversity is simple,” explains Laura Hinton, head of people at PwC UK. “If we want to deliver value for our clients, we need diverse talent, views and thinking that reflects the society in which we work.”

Importantly, diversity is a key focus for the future workforce – millennials – when making career choices. Research carried out by PwC in 2015 claimed that 86pc of female millennials consider prospective employers’ policies on diversity, equality and inclusion.

Through its GenNEXT initiative, Estée Lauder Companies UK & Irelandencourages its millennial employees, who represent 70pc of its workforce, to contribute to the business’s aims, as part of its ethos of “leading from every chair”, explains Monica Rastogi, the company’s head of corporate cultural relevance and regional innovation. Diversity is also integral to the firm’s ambition to reach consumers in an authentic way.

“We explore how people’s culture and attitudes translate into their idea of beauty,” she explains. “We try to understand who our consumer is in a granular way.”

For example, the brand created 50 shades of its Double Wear Stay-in-Place Makeup to reflect the changing ethnic profile of its UK consumers. Each store displays diverse shades prominently, depending on the ethnic backgrounds of local communities. This strategic research, development and marketing effort resulted in the product becoming the country’s top-selling foundation.

Navigating diversity and inclusion

So how can companies unlock the benefits of promoting diversity and inclusion? Getting under the skin of the company to understand its strengths and weaknesses is vital to establishing what Ms Qureshi calls a diversity “baseline”.

The chief executive recommends gathering hard data on demographics and representation, seeking employees’ views through surveys and focus groups, and benchmarking diversity performance against peers.

Ms Hinton emphasises the importance of uncovering and addressing barriers (policies, processes, values and so on) that prevent people from fulfilling their potential. Ms Qureshi and Ms Hinton both agree that fostering a diverse, inclusive culture requires a shift in mindset,
with senior leaders acting as role models.

Training and communications campaigns are important here. For example, unconscious bias training helps people at all levels to uncover deeply ingrained, preconceived ideas relating to different groups and understand how these affect decision-making and interactions.

The strategy must be linked to the insights uncovered at the outset and deeply rooted in business aims, says Ms Qureshi. Companies must celebrate their successes while identifying their greatest opportunities for improvement, weaving diversity into every aspect of the organisation.

“It must be a holistic strategy that considers customers, employees and suppliers,” she says. “From there, it’s all about delivering.”

Leaders should be accountable for delivering on a company’s diversity goals and targets, Ms Hinton says, while Ms Qureshi highlights the importance of measuring tangible progress and monitoring employees’ perceptions.

Increasing transparency is vital to catalysing action, particularly on pressing issues such as the gender pay gap, Ms Hinton explains. It’s also integral to comply with evolving legislation, such as the UK government’s new gender pay gap reporting.

Evaluating progress must be an ongoing process, with companies re-visiting their intentions and evolving challenges, and taking action to enhance their strategies.

This article was originally published on The Telegraph website.