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‘Diversity & Inclusion’ has quickly become more than just a hot-topic issue for businesses around the world — and for good reasons too. After all, discrimination of any kind has no place in our society, let alone the future workplace. However, beyond just the right thing to do, studies have also shown that diversity and inclusion is good for business, too.
In a recent analysis, Wall Street Journal revealed that the 20 most diverse companies in the S&P 500 performed better than the least diverse firms over five- to 10-year periods — 4 percentage points more in terms of average operating profit margin, to be exact. A separate study from Mckinsey reinforces this point, with the top 25% of companies studied for their gender diversity having a greater chance (21%) to experience above-average profitability.
Considering the hard figures, the business case for diversity and inclusion is hard to ignore. However, recognising the potential benefits does not necessarily equate to action and implementation, at least among S&P 500 companies. For example, less than a dozen companies in the S&P 500 have at least 50% female boards; less than 5% are run by a female CEO or equivalent; the number of female executives averages at just 18% in 2020. That is not to say that headway has not been made over the years. In 2020, S&P 500 boards appointed 413 new independent directors, with 59% of them being women and minority men, a small yet significant step in the right direction.
Here are some practical actions that businesses can take to improve equity in the workplace:
1. Going beyond mentoring at the workplace
Mentorship at the workplace means giving advice and guidance to less experienced employees within the organisation. Sponsoring, on the other hand, goes beyond just giving friendly career advice. Mentoring is about investing in an employee’s career and using your influence and network to connect them to high-profile assignments or decision-makers. Many firms have a limit on how many people they can promote at the same time – sponsoring then means to really endorse the person you would like to see rise through the ranks and highlight why they would be the best option for the job, making way for someone who might usually be overlooked to get a fair chance.
2. Be willing to challenge the status quo
Recruiters, too, are in an interesting position to improve a company’s equity. A lot of times, clients approach recruiters with an ideal in mind which is based on what they are already used to or what is considered “usual” within in their industry. This is when it is important for leaders and recruiters alike to get out that ideal image out of their heads and challenge the status quo together. This will open the door to a wider candidate pool, allowing us to find the best talent. Sometimes the person we least expect turns out to be the best fit for the job.
3. Becoming role models for the next generation
Fostering diversity and inclusion at the workplace goes beyond the current generation of workers, too. Nurturing the next generation of leaders and inspiring them to become better, more equitable leaders is crucial to ensure a better future for all companies. Leading by example is then one way to set the course for a more diverse workplace.
4. Recruit those who share the same mindset about diversity and inclusion
It is one thing for female leaders to support women at the workplace — but what about the men? What if they don’t share the same ideas about diversity and inclusion? On top of giving women the flexibility and confidence to make their own choices (that is, to be a mother, a full-time working professional or both), it is also about recruiting men who share the same mindset about workplace equality. When recruiting, we could for example ask “What are your views on having a wife who’s trying to climb the corporate ladder? What happens if she earns more than you?” It is important to know these things because, to make change sustainable, we need to change the culture. Recruiting those whose personal views align with the corporate vision of a more inclusive culture is therefore vital. This should of course apply beyond gender diversity to all aspects of diversity, equity, and inclusion.
5. Childcare-related policies or facilities
Many female employees still feel like they have to choose between becoming mothers and their careers. Working female leaders are thus in a real conundrum as many of them feel that choosing one means compromising the other. On that front childcare at the office is an excellent step in the right direction. Both governments and companies should step up more in terms of practical action and what they can offer in terms of childcare to those who want to work but feel like they cannot due to a lack of childcare options.
