U.S. Census Bureau results for 2020 confirm what every HR leader knows: our nation is aging and becoming more diverse. Both trends continue to impact markets and businesses around the globe significantly, given the associated shifts in health, consumerism and employment.
In the United States, many companies are advancing diversity, equity and inclusion (DEI) initiatives to better align their organizations with changing social norms, markets, labor pools, internal employee wellbeing and employer brand goals. Beyond the core goal of serving as a socially just employer, many business reasons now spur organizations to get DEI right. Examples include becoming an employer of choice, ensuring customer alignment and strengthening community stakeholder support.
At the same time, less obvious reasons for DEI can drive larger economic impact: opportunities for higher levels of business performance, innovation, and increased employee and organizational wellbeing.
Now is the time for leaders to incorporate DEI into every decision and function
Leadership plays a critical role in shaping a company's DEI journey. Savvy leaders reinforce DE&I values in each management decision, communication, promotional message, public speaking engagement, sales conversation and hiring decision.
In our consulting experience, we see many areas in which leadership can become a key change agent:
- Creating a diversity strategy and organizational blueprint for the future
- Fostering cultural stewardship
- Selecting leaders and managers
- Making decisions about organizational career paths and reward structures: health benefits, financial benefits and compensation programs
- Ensuring leaders and managers support the goals and outcomes of the strategy
Further, leaders can demonstrate an ongoing commitment to the organization's diversity strategy in several important ways:
- Owning and celebrating DEI successes and progress, while acknowledging missed opportunities and correcting errors
- Not tolerating individual or small group actions and communications that are not aligned with the organizational strategy, goals, mission and vision
- Promoting periodic look-back communications highlighting the changing face and social fabric of the organization
- Creating a collaborative group of change agents
- Setting measureable goals for diversity and inclusion, and consistently measuring performance in these areas
- Modeling inclusive behaviors and practicing inclusive leadership
As an example of leadership modeling participation in DEI, Gallagher's HR consulting team recently completed an employee feedback session for a small non-profit client to gather insight into the level of inclusive practice in their workplace. The organization's executive director kicked off the meeting by setting the stage for how important this topic was to him and the future of the organization. He then joined one of the sessions as a participant, sharing his own perspectives and thoughts as an individual and leader. This participation powerfully helped the employees to see their leader personally caring about inclusive work actions and making it a business priority.
Embed DEI strategies to foster wide-ranging career and organizational wellbeing
Leaders alone can't turn an organization in a new direction; however, they can steer teams and processes toward the goal. Many systems and people must work together to change an organization. With clear leadership and coordinated effort, signs of a positive new direction will emerge. Such steps toward better career wellbeing may include:
- Remove bias from job descriptions. Research shows that "masculine" adjectives like "superior," "competitive" and "determined" result in fewer female applicants. Ensure that all qualifications relate directly to duties performed on the job.
- Expand talent sourcing networks. Connect with diversity-oriented job groups, partner with diversity organizations and reach out to diversity-oriented groups at universities. Develop outreach programs with educational institutions beyond elite universities and include focus on under-represented groups.
- Realign employment practices. HR staff can evaluate and update practices and procedures around employee attraction, recruitment, development and retention to reflect contemporary employee needs.
- Update training and development curriculums. How is your organization preparing leaders to lead diverse teams? Does your organization focus on developing competencies like cultural intelligence and inclusive leadership, as well as skills necessary to both develop and model inclusive behaviors?
- Restructure compensation and benefits. Review platforms for equity, making appropriate adjustments.
- Support better work-life balance. Managers and teams can discuss remote work, paid family leave and other tools and benefits to enhance career wellbeing.
- Maintain an open-door policy. Leaders and managers can institute virtual office hours and truly listen to employee feedback. After gathering input, leaders must implement identified action items.
Financial success is one of many DEI contributions to organizational wellbeing
What does overall organizational wellbeing look like? Organizations that put the time and energy into creating and advancing a clear DEI strategy will see many benefits. Among the many benefits are a healthier and more inclusive workplace; improved psychological safety for all employees; a stronger employer brand; better recruiting and retention outcomes; and less risk of discrimination complaints or other compliance issues.
All these factors work together to enhance financial success. Consulting group Gartner predicts that 75% of organizations "with frontline decision-making teams reflecting a diverse and inclusive culture will outstrip their financial targets."1 Research led by Weber Shandwick echoes the point, indicating that 66% of executives responding to a survey strongly agree that DE&I is an important driver of company financial performance.2
In turn, customers, clients and prospective employees will support businesses that align with their values. In the current competitive market for top talent, a DEI orientation can offer a competitive edge for talent attraction and retention.
A 2022 Stanford study suggests that "a majority of people looking for work care about potential employers' demographics and diversity. In fact, most care enough about it so much that they're willing to sacrifice a higher salary to consider working at a more inclusive company."3
On the flip side, in our experience we also have seen situations in which organizations have made a show of supporting DEI with messaging during times of high-profile events such as those related to social justice issues. Those same organizations then fail to authentically demonstrate their commitment with policies, promotion and hiring. Such performative actions can serve to drive away top talent and damage the organization's success and reputation.
Encouraging employees to bring their whole selves to work
The internal collaboration built during a shift in organizational priorities often creates strong engagement and long-lasting relationships as further indicators of career wellbeing. When colleagues and leaders build a sense of belonging, they drive connectedness. Such connectedness reinforces resiliency and trust, which in turn can reduce risk of burnout.
At Gallagher, we've seen countless examples of strengthened relationships among professional colleagues when they bring their "whole selves" to work. For example, during Covid-19 remote work situations, we found ourselves learning about each other's families, personal routines and home life.
Strengthening the cultural glue across an organization can foster many positive outcomes. Teams will discover new professional friendships and the ability to respectfully address different points of view, and they may even create unexpected innovation. When leaders commit to embedding DEI to drive career and organizational wellbeing, the positive outcome can be surprising.
Gallagher's Human Resources Consulting team can help your organization's leaders craft a system-wide plan to begin to integrate DEI into every business function.