- March 29, 2022
- Posted by: CFA Society India
- Category:Careers, ExPress
Aditi Mehta
Manager, Operations Governance, Fidelity International
Diversity and Inclusion in the workplace
I start by narrating two stories. These are stories of (in)difference.
The story of a quiet problem-solver
In a Zoom training session, I met Arun. He had dialled into the call from his hometown in North East India. As he was introducing himself, I lost internet connection. All other training participants were on the call, except I, the trainer. As I was panicking, Arun sent me a message with a solution. He suggested I delete cache and cookies and re-connect to the network. I obeyed and it worked. I thanked him, apologised to the others, and began the training session. During the online coffee break, his colleagues started chatting in a language that he clearly did not understand, and I noticed a sudden change in his demeanour. From the confident, motivated problemsolver, he transitioned to a quiet, disengaged trainee.
We may have won at diversity but not at inclusion.
There is no doubt that the first step towards creating a diverse workforce is for employers to meet the minimum diversity ratio. Meeting the minimum criterion is easy; it can be achieved by adhering to target numbers set by Human Resources and the local D&I team but nurturing, retaining, and sustaining this culture is the real challenge.
Recruiting diverse candidates is the first step but this is not enough. Employers must accelerate to next steps. Can organisations sustain the cost of being non-inclusive? Let’s analyse the impact of a diverse, non-inclusive workforce. Arun, if unable to break barriers, will continue feeling disengaged. With time, his motivation will run out thereby negatively impacting productivity. Maybe a more appropriate title would be ‘the story of lost talent’ but we will never know.
The story of the misjudged fish
A few years ago, I was interviewing candidates for a technical role. This is when I met two incredible candidates – Cheryl and Deepa. Cheryl was an outspoken girl with excellent communication skills whereas Deepa was introverted and although well-equipped, could not articulate her story. I spoke to both for 30 minutes and decided to select Cheryl. One year later, I was told that Cheryl was put onto a performance improvement plan and had now decided to quit the organisation.
This incident forced me to think back to my decision – would Deepa have been a better choice? Did the role require great communication skills? How do we judge a candidate in just 30 minutes? This is when I thought back to the famous saying ‘if you judge a fish by the ability to climb a tree, it will live its whole life believing that it is stupid’.
Equality may have won that day, but equity did not.
I understand now that diversity & inclusion goes beyond gender, colour, and physical ability. It’s also about employers embracing situations inconvenient for them, like supporting expectant mothers, providing flexibility to returning mothers, supporting employees coping with physical and mental health issues, including employees from different socio-economic backgrounds.
In this essay, I articulate:
· that a diverse and inclusive workplace culture is are no longer a preference; it’s a requirement.
· how inclusive leadership can create a diverse and inclusive work culture.
· that our workplace culture impacts colleagues, consumers, brand equity and society.
Understanding diversity and inclusion
Diversified Investing
It is widely known that diversified portfolios mitigate unsystematic risk by allocating investments across various asset classes, industries, and categories. It aims to maximise long run financial gains by minimising concentrated exposure. In simple words, diversification attempts to reduce the impact of reaction that financial instruments can have to the same event as each would react differently.
When I discussed Deepa’s interview with my colleague, she pointed out that Deepa was indeed better suited for the ] technical role. This made me see why we need diversity at the workplace. Like financial instruments, we react differently to the same event.
Ushering in She-conomy
Did you know? Fewer CEOs are women than are named David. Women make up less than 5% of the Fortune 500 companies, (a 25% decrease from 2017). When one name outnumbers half of the U.S. population, we recognize how serious this issue is. [1]
Like diversified investing, more and more people are seeing the value of diversified working. There is a strong link between women on board and sound financial performance. Inclusive workplaces encourage diverse perspectives and, as a result, understand customer needs better. Boards with women members are more likely to focus on non financial performance indicators such as customer satisfaction, employee retention and corporate social responsibility and are better able to monitor board accountability and authority, leading to transparent corporate governance. The presence of women on boards reinforces a company’s culture and public image of diversity and inclusion, thus allowing organisations to retain and cultivate their best talent at all levels.
Source: International Labour Organization [2]
A nudge by regulatory bodies and policymakers has ushered in gender diversity in the boardrooms of companies. It was symbolic but has proven to be a step in the right direction. India is one such market to embrace gender quotas: the 2013 Companies Act made it compulsory for all publicly listed firms to have at least one woman director. [3]
Future Leaders
Did you know? Millennials will comprise 75% of America’s workforce by 2025. [4]
For millennials, diversity and inclusion in the workplace is not a preference but a requirement. Along with millennials, now Gen Z have entered the workforce. This generation is born in the year 1996 and has brought on a new perspective, expectations, and challenges. These are our future colleagues, clients, customers, citizens, and investors.
Image source: Pew Research Center [5]
Employees understand that inclusive, progressive employers make for stable employment opportunities. According to Gallup, millennials’ engagement is lower than that of any other generation. It is estimated that millennial turnover costs the U.S. economy $30.5 billion annually. [6]
Most organisations have business continuity plans for unforeseen situations, be it a political disturbance or a pandemic, but do they have plans for a disengaged workforce? This is a disaster in the making and is being fuelled by organisations unwilling to accept diversity and inclusion.
To keep our younger workforce satisfied, it is important that we first understand who they are. This generation is vocal when content and equally so when discontent. They are not afraid to challenge the status quo. While employers are carrying out background verification checks on employees, employers, too, are being verified by prospective employees. This generation is targeting employers committed to confronting systemic racism in their ranks.
More importantly, younger generations identify with diversity. These future leaders will naturally build more integrated, well-connected, and diverse networks. And I hope with them we can put to rest conversations regarding mandatory training courses and maintaining diversity ratio. With diversity and inclusion naturally embraced and embedded in the workplace, we can rightfully focus on bringing equity.
What can organisations do?
Leadership is not a position, it’s a privilege. Organisations must urge their leaders to understand, embrace and embed diversity. The concept of inclusive leadership is no longer a mandatory training course or a conversation during appraisal season; it is the way forward.
Identifying and mitigating biases
When faced with complex decisions, humans tend to base expectations upon past experiences and rely on instincts, which may lead to sub-optimal decisions. Identifying behavioural biases is an integral part of correcting unconscious bias. Leaders must embrace a proactive approach to reduce the impact of behavioural biases to strengthen the value of services they deliver to their clients.
In the second story titled ‘the story of the misjudged fish’, the interviewer disproportionately focused on spoken English and the stereotype they are drawing on causes them to believe that the candidate with better linguistic capability is more likely to deliver better results. This is a classic example of representativeness bias.
Rather than looking for patterns in information, we must consciously take steps to avoid base rate and samplesize neglect. In this example, the interviewer should have undertaken an analysis of skills required for the job and those exhibited by the two candidates. This will allow interviewers to objectively weigh information received and thereby save the cost of recruiting sub-optimal talent.
Well-being of employees
Employee voice and wellbeing should be at the front and centre of everything organisations do. Companies such as Google, AT&T and Twitter are examples of inclusive cultures that are fostering an environment where employees feel encouraged to contribute and that are achieving business success.
Due to the pandemic, employees worldwide have adapted to newer ways of working. This dynamic attitude was widely applauded by employers, but they must also acknowledge that this change brought about temporary and, in some cases, permanent changes for their partners, children and in a country like India, elderly parents as well. With the world seeing a decrease in infections, some organisations are determined to resume working from office. While many have permanently switched to dynamic working models, others insist on a work from office stance thereby leaving employees and their families in a lurch. It is understandable that some processes are more critical than the others and return to office is the optimal solution, but leaders will need to step up to ensure this transition is done tastefully.
Focus on Positive Progression
To encourage diversity and inclusion, leaders must embrace not just vertical but horizontal progression as well. Leaders have the responsibility of shaping careers and ensuring succession plans are robust to ensure business continuity and employee progression.
· Mentorship programs Leaders should mentor someone who is different than them. They can be more inclusive by assigning assignments to someone other than their go-to person.
· Network with those outside the leadership circle In India, seniority is highly regarded hence having a meal with a senior leader is considered recognition for exemplary work. Great leaders understand that they must continuously learn and evolve. They must network with someone from a different background, level, or experience to foster a workplace culture of openness.
· Encourage psychological safety Psychological safety is a concept that the Harvard Business School professor Amy Edmondson defines as a ‘‘shared belief held by members of a team that the team is safe for interpersonal risk-taking.” Teams must feel confident that challenging status quo will not be held against them.
Impact on organisations, consumers, and the society
Attracting and Retaining Talent
Employees are interdependent in the workplace, respecting individual differences can increase productivity.
· Inclusivity = Increased morale Diversity in the workplace can reduce lawsuits and increase recruitment opportunities and talent retention. Additional support provided to employees in unique situations, i.e., expectant and/or returning mothers, parental leave allowance irrespective of gender. When organisations take a step forward towards building a safe and flexible workplace, employees take two towards improved productivity and customer centricity.
· Inclusivity = Increased revenue According to a Josh Bersin study, highly inclusive organizations generate 2.3x more cash flow per employee, 1.8 times more likely to be change-ready and are 120% more capable of meeting financial targets. [7]
· Inclusivity = Increased collaboration Diverse cohorts challenge better, collaborate better, and celebrate better. Inclusivity ensures collective preparedness enabling inclusive, transparent, and improved decision making thereby focusing time and efforts on non-performance initiatives like corporate social responsibility.
Reaching and Understanding Diverse Customers
It may be challenging to define one marketing strategy for Gen Z and Millennial consumers but at the same time provides a unique opportunity for brands. These generational cohorts are of special interest, given their increasing spending power and ability to influence other generations.
Millennials have been taught by their boomer parents to make the world a better place. The oldest millennial has entered their peak earning and spending power. They will increase their per capita spending by more than 10% over the next five years. [8]
Socially Responsible
Millennials taught the world that merchandise and meaning can go hand in hand. This was seen in their choice of investment as well. ESG investing came of age in 2020 and millennials continue to drive it. About $40 trillion of all professionally managed assets globally have some ESG theme overlay, and this number and percentage of assets are only expected to grow in 2022 and beyond. [9]
Gen Z consumers will increase their per capita spending by more than 70% in the same period, while both Gen X and baby boomers will decrease their spending. More than 80% of parents report that their household spending is influenced by their children. [10]
The increasing awareness is sparking fierce debates over how important correctly identifying individuals is, and how language and institutions need to be genderless.
In 2021, White House added gender-neutral pronouns that people could select when contacting the U.S. Government.
Source: Pew Research Center [11]
As I have articulated, inclusive workplace culture is much more than sharing a meal with a different looking colleague, giving them a hug or being nice. When leaders commit, workplaces attract and retain top talent, increase engagement, contentment, and productivity, and unconsciously build brand equity.
The world is looking beyond binaries; we must too.
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References
1 5 Benefits of diversity and inclusion in the workplace | Greenhouse
3 What Happened When India Mandated Gender Diversity on Boards (hbr.org)
4 5 Benefits of diversity and inclusion in the workplace | Greenhouse
5 Generation Z Looks a Lot Like Millennials on Key Social and Political Issues | Pew Research Center
6 Millennials: The Job-Hopping Generation (gallup.com)
7 [5 Benefits of diversity and inclusion in the workplace | Greenhouse] [Why Diversity and Inclusion Has Become a Business Priority – JOSH BERSIN]
8 How Marketers Can Win with Gen Z and Millennials Post-Covid-19 | BCG
9 ESG theme for stocks to accelerate in 2022 (livemint.com)
10 How Marketers Can Win with Gen Z and Millennials Post-Covid-19 | BCG
11 Generation Z Looks a Lot Like Millennials on Key Social and Political Issues | Pew Research Center
Disclaimer: “Any views or opinions represented in this blog are personal and belong solely to the author and do not represent views of CFA Society India or those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated.”