Diversity and inclusion at workplace yield “dividends” in many respects. Lack of diversity and inclusion acts as a “tax” on work teams’ engagement and performance.

 

Diversity and inclusion at workplace – the backdrop

In just the last four decades, we have witnessed significant advancements in computers, the internet, mobile phones, technology, logistics, supply chain, and many other related areas.

The end of the cold war between the Russian Federation and the United States, signified with the fall of the Berlin wall, opened up relations and trade between the two superpowers and the rest of the world. Business is now global, and the world is now interconnected.

Large multinational companies now have the luxury to produce goods (or provide services) wherever it is inexpensive to produce and sell them wherever it is most profitable. As a result, the workforce also has become diverse and global.

It is now common to see diverse employees in all aspects of the word – gender, ethnicity, language, religion, country, race, color, age, sexual orientation, political beliefs, or any other ideologies.

In a global and interconnected business world with a diverse workforce, diversity and inclusion have become essential leadership competencies. Research has shown that diversity and inclusion at workplace improve both employee engagement and financial performance.

 

What is diversity?

The dictionary definition of the word diversity means having or being composed of different or diverse elements. Diversity at the workplace refers to a mix of diverse employees in terms of race, religion, gender, physical ability, language, ethnicity, social class, sexual orientation, etc. However, diversity is also about openness to any differences – intellectual, political, ideological, social, cultural, beliefs, attitudes, abilities, physical attributes, or even preferences.

 

Similarity and differences

We are similar in many aspects. As human beings, we all have similar needs and wants. We want to earn a good living, take care of our families. We want to be loved, accepted, and be happy.

We are also different in other aspects – No two human beings are exactly alike! We are all unique and one of a kind. We can notice the visual differences immediately. Race, disability, language are some such examples. There may be differences in ideas, opinions, preferences, life experiences, approach, and so many other areas if we go further.

 

Diversity – The anthropological perspective

 

Nomadic age

For over 100,000 years, human beings and early humanoids lived a nomadic life as hunter-gatherers. They had no permanent structures and moved from place to place in search of food and shelter. They stayed in their own groups and didn’t trust other groups, especially if they looked and behaved differently.

 

Agricultural age

The discovery of agriculture allowed humans to settle in one place and form societies. The agricultural age lasted about 10,000 years or so. Human beings learned to settle down, form bonds with other people, and agriculture and trade flourished. We learned to live and interact with different people. But their interactions were limited to within the geography or their villages or kingdoms they lived in.

 

Industrial age

Then came the industrial age. Most farm jobs were lost due to mechanization. People moved to cities to work in factories. They learned to work and live with people from different backgrounds and cultures. This was probably the beginning of diversity in the workplace. The industrial age lasted about 200 years.

 

The information age

In the last four decades, we have moved from the industrial age to the information age. The rapid advancements in computers and technology in the ’70s and the ’80s started shifting from the industrial age to the information age (or the digital age).

By the late ’80s and early ’90s, internet and mobile technologies accelerated the shift digital or information age from the industrial age.

Thomas Freidman’s 2005 book, The World is Flat, captures this shift quite comprehensively. The convergence of technology (transatlantic cable with high internet speed) and events (the Y2K – the year 2000 computer problem that needed programmers that the US did not have enough of) allowed India, China, and many other countries to become part of the global supply chain for services and manufacturing.

Soon, India became the back office of the western world. The global shipping, supply chain optimization, and relatively cheaper and reasonably skilled labor force; allowed China to become the manufacturer of choice for the entire western world.

The last decade – 2010 to 2020 – has brought even better technology for global communication and collaboration. As a result, the workforce in multinational companies is now even more diverse and even more global. A manufacturing company may have plants on several continents.

A software company may have employees collaborating on the same project from several different countries. Companies, both large and small, have to learn to employ and deploy a diverse workforce, often worldwide.

What is inclusion?

Here is a good definition of inclusion from SHRM “the achievement of a work environment in which all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization’s success.” Inclusion is a culture and a workplace environment where diverse employees feel comfortable and included and can contribute and thrive.

In the United States, equal opportunity and affirmative action laws have mandated companies to follow fair practices in hiring and promoting employees. There are penalties for any systemic discrimination based on any attribute of Companies took notice and made some progress in diversity by hiring people from varied backgrounds. For many years, companies considered diversity as something that they had to put up with. However, in the last decade or two, companies have started understanding the benefits of a diverse workforce and their inclusion.

Diversity by itself doesn’t lead to inclusion. Organizations need to do much more than hiring people with diverse backgrounds. They need to establish practices, policies, culture that allows everyone to feel that they belong irrespective of their backgrounds. It is about valuing people for who they are and what they bring instead of focusing on differences. It is about being intentional to overcome our unconscious biases. It is about systematic and concerted efforts towards the goal to include everyone irrespective of their background. It is about challenging the status quo and business as usual.

 

What is the opposite of diversity and inclusion?

The opposite of diversity and inclusion may be discrimination based on race, religion, gender, physical ability, language, ethnicity, social class, sexual orientation, etc. Companies have made some progress in terms of diversity, but a lot more needs to be done.

For example – Gender inequality in the workplace. Although women comprise over 50% of the population, there are just a few women CEOs or board members in companies worldwide. Women get paid less than men for doing the same work. The World Economic Forum’s gender gap index’s worldwide average was at 68%.

Companies are making a concerted effort in the right direction. You can see titles of chief diversity officer or chief inclusion officer in large companies to foster diversity and inclusion at workplaces.

The impact of Millennials on diversity and inclusion at workplace

Millennials have entered the workforce in large numbers, and they have seriously challenged the work practices that have spilled over from the industrial age mentality. Millennials demand workplaces where everyone is respected, treated with dignity, and has equal opportunity to learn, grow and prosper. Millennials are more purpose-driven, and they care less for profits at the cost of social justice. Millennials are a now significant percentage of the workforce in the western world. Companies have changed a lot of policies to accommodate them.

Impact of Social movements on diversity and inclusion at workplace

The world has seen several social movements that have either helped or hurt diversity and inclusion at workplace and in communities.

Divisive politics and policies: Politicians use divisive tactics to shore upvotes and gain power. One prime example is President Trump in the USA. His divisive politics and policies have encouraged fringe elements to commit discriminatory practices. His administration has also encouraged divisive politics and led to divisive parties’ rise with extreme views across Europe and Asia.

Black lives matter movement

The video of a white police officer choking a black man George Floyd despite his repeated pleas, “I can’t breathe,” spread like wildfire across the world. It brought to light many aspects of racial discrimination and infuriated people from all around the world. It was a tragic incident, but it sparked a movement that will surely help the cause of diversity and inclusion at workplace and communities. The Black Lives Matter movement has compelled and empowered companies to address racial disparity and take positive actions.

Me too movement

On October 15th, 2017, American actress Alyssa Milano sent a message to her follower on Twitter’s social media platform. The tweet read – “If you’ve been sexually harassed or assaulted, write ‘me too’ as a reply to this tweet.”
Within 24 hours, the post went viral and generated thousands of replies, comments, and retweets. Ordinary women and celebrities from around the world shared their personal stories of sexual harassment or assault.

A majority of them spoke up for the first time about being raped, fending off aggressive bosses or co-workers, and having to remain silent for fear of losing their jobs.

What are the benefits of diversity? (Why is it needed?)

For many years, companies thought of diversity as something to be “dealt with.” Talent acquisition departments had diversity quotas. They did their best to check the boxes and report annual diversity numbers. For example – if a company hired an employee who is female, belongs to a minority race, and is partially disabled – it meant that the company could check off three separate boxes against their diversity quotas!

However, in the last couple of decades, research has shown, and companies have realized the benefits of diversity and inclusion at workplace. Diversity and inclusion at workplace is not just the “right thing to do,” but it also has significant business benefits.

 

Larger talent pool:

Diversity starts with hiring practices. Hiring a diverse workforce allows companies to tap into a larger talent pool. It can be people who understand the local culture, speak a local language, or are familiar with a particular country’s statutory requirements.

 

Varied perspectives:

Diversity fosters a larger variety of ideas and approaches. If you have employees from the same college or cultural backgrounds, it can lead to groupthink and stifle change and innovation.

 

Better team performance:

Research has shown that diverse teams perform better. However, there is a catch. It is inclusion and psychological safety on the team. To take advantage of diverse teams and workforce, leaders and organizations must drive fear out and create a psychologically safe workplace.

The business case of diversity and inclusion at workplace

Diversity and inclusion are humane values. Any human being who means no harm to others deserves to be treated fairly and respectfully. We also feel that diversity and inclusion at workplace should help engagement, change, innovation and performance. Can we make a business case to be for diversity and inclusion at workplace?

In an article in 2015, Mckinsey’s research found that top companies (those ranked in the top 25% for diversity in terms of gender, race, or ethnicity) are more likely to have above-average financial returns to their industry average. On the other hand, companies in the bottom 25% were statistically less likely to achieve above-average returns.

In the United States, EBIT earnings before interest and taxes rose 0.8% for every 10 percent increase in racial and ethnic diversity on the senior-executive team of a company. In the UK, higher gender diversity on the senior executive teams brought in the highest financial returns. EBIT rose by 3.5% for every 10% increase in gender diversity.

Mckinsey concluded that diversity is probably a competitive differentiator that gets better with time. Many other studies have found a correlation between diversity and inclusion and better organizational performance.

Diversity and inclusion at workplace – a core leadership competency

Diversity and inclusion have become a core leadership competencies for the 21st-century leader. Without this competency, the leader will have a difficult time utilizing the talent of the diverse workforce.

Organizations have made significant progress with diversity. Inclusion remains a challenge. One of the essential ingredients of a diverse and inclusive workplace is the leader’s behaviors.

Our Global leadership 360-degree assessment, GLA 360, includes the competency of “Appreciating diversity” as one of the emerging competencies. This assessment allows the leader to gauge herself on 15 different competencies, including the competency of “appreciating diversity.”

Read more about the Global leadership assessment (GLA 360)

We also offer leadership coaching that helps the leader develop the essential competencies of a global leader. In fact, we are so confident of our coaching process that we often work with our clients on a no-growth no pay basis. If the leader doesn’t measurably improve – as anonymously rated by the leader’s own team members – you don’t have to pay!

Read:  Three employee engagement strategies that every leader must know

Ways to foster diversity and inclusion at workplace

Here are some of the multiple ways organizations can foster diversity and inclusion at workplace

 

Organizational policies

• Recruitment and performance management are two essential policies to ensure both diversity and inclusion at workplace. Have a clearly defined recruitment process to reach out to diverse communities and colleges to attract and hire diverse talent.

• Ensure a good performance management process that eliminates any biases – gender, race, age, etc. and promotes and rewards people based solely on performance.

• A good onboarding process allows a new employee to know and work with all the team members quickly.

• Acknowledge and celebrate a variety of religious and cultural practices. Allow people flexible holidays for the festivals they celebrate.

• Regular training on sensitivity for all employees and team leaders.

• Clearly define anti-discriminatory policies and enforce them publicly and visibly. This encourages the right behaviors while discouraging and punishing any inappropriate behaviors that violate the policy.

• Having a forum to discuss diversity issues openly and report problems anonymously.

 

Foster a culture of psychological safety

Here are a couple of definitions of psychological safety.

“Being able to show and employ one’s self without fear of negative consequences of self-image, status or career.”

“Psychological safety is the belief or perception of the team members that one will not be punished, humiliated, or face any consequences for openly sharing their half-formed ideas, silly questions, concerns or mistakes.”

Simply put, psychological safety is the answer to this question – Can I be myself, or do I have to hold back on this team? Inclusion and a sense of belonging are enhanced in a culture of psychological safety.

Here are a few ways to foster psychological safety on your team

• Be inclusive in interpersonal settings & in decision-making
• Conversational equality and role rotation in meetings
• The leader role models vulnerability
• Demonstrate curiosity and listen genuinely

Read:  Psychological safety at work – Why you need it and how to develop it.

To quote Dr. Amy Edmondson, the pioneer of the research on the topic, “Psychological safety at work takes effort. It’s not the norm. But it’s worth the effort,”

 

In conclusion

Diversity and inclusion at workplace are not just about headcount numbers and recruitment policies. Progressive companies know that diversity and inclusion are a competitive advantage that allows them to outpace competitors. Diverse and inclusive workplaces result in higher employee engagement, lower attrition rates, higher commitment, openness to change, and higher innovation levels. Diversity and inclusion is a critical leadership competency for the 21st-century workplace. Coaching leaders on diversity and inclusion is one of the best ways to improve your organization and stay ahead of the competition.

References

The inclusion dividend – Why Investing in Diversity & Inclusion Pays Off – 2013