Recent McKinsey research reveals that the business case for diversity, equality, and inclusion on executive teams is stronger than ever.

Business case 

There is a 39% increased likelihood of outperformance for those in the top quartile of ethnic and gender representation versus the bottom quartile.

The following diagram from the McKinsey report “Diversity Matters Even More” illustrates how the business case has increased yearly.

The penalties for low diversity on executive teams are also increasing. Organisations with representation of women exceeding 30% (and thus in the top quartile) are significantly more likely to outperform those with 30% or fewer financially. Similarly, companies in the top quartile for ethnic diversity show an average 27% financial advantage over others.

There is also a business case to attract and retain talent. Benevity Impact Labs State of the Workforce DEI report published in April 2023 found that 95% of employees weigh a prospective employer's DEI offers when choosing between job offers.

87% said they would feel more loyal to a company with a proven track record of prioritising DEI.

78% said they would not consider working for a company that fails to commit significant resources to prioritising DEI initiatives.

“Employees' DEI expectations remain high even in a volatile economy - and they’re willing to pass on employers that aren’t taking serious action.”

Despite the resounding business case and many organisations attempting to improve DEI, there has not been much progress.

What’s the problem?

Wring for Forbes, Julie Kratz, founder of Next Pivot Point and Little Allies, says the problem is mistrust, fear and a lack of education.

“Mistrust, fear and lack of education continue to hold organisations back because most C-suites are composed of white males. There's often a lack of understanding of diversity and inclusion issues due to their own limited lived experiences.”

There is also much lip service and little real accountability to make DEI a real business strategy.

The report “Elevating Equity: The Real Story of Diversity and Inclusion” contains the findings from global research by Josh Bersin in conjunction with Perceptyx. It found:

• 76% of companies have no diversity or inclusion goals.

• Only 12% of companies hold managers responsible for recruiting diverse candidates, and only 11% of recruiters are evaluated based on sourcing from underrepresented groups.

• 75% of companies do not have DE&I included in the company's leadership development or overall learning and development curricula.

• 40% of companies see diversity work as purely defensive to mitigate legal, compliance, or reputational risks.

• Only 32% of companies mandate any form of DEI training for employees, and only 34% offer such training to managers.

The researchers also developed a maturity model for DEI. It showed that around 80% of companies are just going through the motions and are not holding themselves accountable.

Empty gestures

The lack of accountability is evident in many organisations. When there is attention to DEI, organisations respond with empty gestures.

This happens on International Women’s Day, International Day of the World’s Indigenous People, International Day of Older Persons, Inclusion at Work Week, and International Day of Persons with Disabilities. This is when the posters are printed, the speeches are made, and the media is invited to capture posed pictures. This has been referred to as “performative allyship” by Alok-Vaid Menon.

Talking with Maya Richard-Craven in a Forbes article, Alok said:

“In June, many companies make rainbow colored logos and hand out colorful t-shirts, mugs, and other free merchandise to show their support for members of the LGBTQ+ community. That’s because June is Pride Month, a month-long celebration of queer experiences, history, and joy. But queer inclusion should matter outside of a single month, especially in the workplace.”

Employees want to feel included, heard and valued every day of the year, not just on one day, one week, or one month of the year.

Performative commitment

Like “performative allyship”, DEI training cannot be a one-off event. As Julie Kratz says in her article:

“A common pitfall that companies often stumble into is the "one and done" approach to diversity-and-inclusion training. This method involves a single training session or program that is intended to check the box and fulfill the organization's diversity-and-inclusion requirements. Unfortunately, this simplistic approach falls short of creating meaningful, lasting change within the workplace.”

This again illustrates a lack of accountability for embedding DEI into the organisation's culture. It is no more than smoke and mirrors to give those interested the illusion that the organisation takes DEI seriously. Whilst the outside world may be fooled, employees will be fully aware that there is no real commitment.

DEI training cannot be an event. It must be something that continually evolves. Learning must be continuous. It must address the needs of every employee at every level in the organisation. It must result in “cultivating a genuinely inclusive mindset, " not just superficial awareness.

The effectiveness of the training and development must be measurable so that it can be subject to continuous improvement. It must be continually developed to address the changing DEI landscape.

Open and honest conversation

If you want to demonstrate total commitment to DEI and be open, honest, transparent, and authentic, there must be an environment of psychological safety.

This is an environment in which there is trust. It is an environment where everyone feels safe to speak up, voice their concerns, share their feelings, and ask questions without fear of repercussions or reprimands. They trust they will be respected and their voice heard. Organisations must act on the feedback received, including the dissenting voices.

DEI initiatives can raise fears that, despite being unwarranted, are fears nonetheless. There could be the fear that the dominant white male group will become less important or relevant as more diverse talent is recruited or promoted. There can also be fear within the diverse groups that the DEI initiatives are a smokescreen and not authentic, and therefore, they are just pawns in a game of pretence. Promises made in the guise of DEI are without substance.

Employees must be able to air these concerns in a safe environment. Many organisations provide space and resources for employee resource groups (ERGs). In the Benevity Impact Labs State of Workplace DEI 2023, 97% of survey respondents said ERG/affinity groups help make the workplace more equitable and inclusive. 93% said they help support employee well-being at work, and 92% said they help unify the workplace.

ERGs and similar affinity groups are voluntary, employee-led groups designed to foster connections based on shared characteristics or lived experiences (e.g., gender, religion, race, sexual orientation, disability, or colour, etc.)

ERGs offer not only an opportunity to connect with colleagues with similar lived experiences but also the ability to connect with colleagues with different lived experiences and build allyships with diverse colleagues.

There is an air of caution. ERGs must be managed properly and built on a basis of mutual respect and trust. They can perpetuate stereotypes and biases and create division if they are not managed well. They must also be an obligation to the ERGs in the organisation and not “performative commitment” as mentioned earlier.

Nicole Simpson, director of DE&I for RAPP US, told Worklife:

“For example, if the only time you are giving your Black ERG money is for Black History Month, that’s a fail. If the only time you are giving your API ERG funding is for API History Month, you’re failing. Understand that proper support here all around is what will make these groups successful, and without it, they will inevitably fail.”

She emphasised the need to ensure commitment through the entire employee experience, not just for cultural events, especially because it ties back into tokenism and reinforcing stereotypes.

Are you succeeding?

DEI is a strategy, and it must be measurable. Only when measured can you make changes to improve its effectiveness.

Employee lifecycle

There are many sources available to provide you with metrics to measure DEI. I particularly like the approach from Culture Amp that suggests that you measure demographics across the entire employee lifecycle, including the following areas.

1.     Hiring

What is the diversity of applicants?

What is the diversity of the hiring panel?

2.     Representation

Collect demographic data to determine what groups may be underrepresented or missing in the organisation.

Use diversity and inclusion surveys to collect employee feedback.

When looking at other DEI metrics, you can use the data collected as a baseline.

Culture Amp provide the example that you may attract diverse candidates in your hiring pipeline but find that the team is not diverse. Therefore, there could be some bias in the hiring process. You may have diversity in the workplace but find that the ERG participation is low. This could mean a deeper cultural problem or ERGs are not being managed well.

3.     Retention

You not only want to attract diverse talent, but you want to retain it. DEI values must be embedded into your organisational culture, so you keep employees engaged and committed.

Check on your employee turnover and attrition. Are there certain diverse employee groups in which attrition is higher than others? If so, it may be that this group of employees are not feeling a true sense of inclusivity and belonging.

4.     Advancement

Which employees, and from what groups, are climbing the advancement ladder in the organisation? Is there a demographic similarity between those promoted employees, or are there clear anomalies? Are employees from all groups and backgrounds taking advantage of the learning and development opportunities? If not, why not?

Employee experience

You can learn a lot about how valued, included, and supported employees feel by conducting surveys and collecting feedback on the employees' experience.

5.     Job satisfaction and engagement

In your surveys, which employees indicate high satisfaction and engagement, and which do not? Are there some common threads between those who rate engagement and satisfaction poorly? If so, an investigation is called for.

6.     Employee resource group (ERG) participation

If you have ERGs, what is the participation rate? If it is low, you must determine and address the cause. Are there some ERGs with high participation rates compared to others? Get employee feedback to determine why some ERGs are more successful than others.

7.     Accessibility

Your diverse workforce needs to feel welcome, which means they must have the same access to resources as other employees.

For example:

·       Do all employees have a comfortable place to use the bathroom?

·       Do you offer adequate parental (not just maternity) leave?

·       Do mothers have a space to breastfeed?

·       Do you have screen readers and other equipment for employees with disabilities?

·       Do you have prayer spaces for all religions?

·       Do you recognise all cultural holidays?

Company makeup

8.     Leadership

We looked earlier at the McKinsey findings and the business case for diversity in leadership teams.

Use your demographic data to look specifically at your organisation’s leadership. Is there diversity in your C-suite? Managers? Board members? If not, your organisation should prioritise diversity in at least some of these critical roles.

9.     Suppliers

Who serves your organisation, and what is their stance on DEI? Are you working with service providers and suppliers who align with your core values and beliefs?

Do you use a diversity of suppliers? Are you giving underrepresented providers a chance at a supplier relationship with you?

Is there a diversity of speakers at your events who bring different life experiences?