Diversity and inclusivity are no longer just legal or moral corporate responsibilities, but key priorities for most organizations. A diverse and inclusive workforce can provide immense benefits to an organization, including higher customer satisfaction, enhanced market position, an improved ability to reach strategic goals, and stronger bottom-lines.
Diversity and profit margins
Diversity Matters, a study by Catalyst, found that companies with three or more women on their Board of Directors had higher returns on equity, sales, and investments. Furthermore, the customer and market landscape have changed and evolved in the last decade. Globally, the customer is no longer only the middle-class adult male.
In India as well, the most revolutionary change has been the increased purchasing power of women. Due to the rise of online payments and e-commerce business models, women are spending as much as, or even more than men. This has been witnessed across categories, from small-ticket purchases like clothing and ride-sharing to large ticket items like electronics and jewelry. To provide more insightful and competitive products and services, companies need a more representative employee mix, at all levels of the workforce, and across all verticals – product development, sales, AI & data analytics.
Inclusivity is the other side of the ‘diversity’ coin and a prerequisite for harnessing the potential of workforce diversity. Inclusivity simply means the full involvement, integration, and acceptance of people from different backgrounds at the workplace. For example, a diverse workforce will encourage women employees to share their unique gender insights at the workplace.
Creative solutions to diversity challenges
While a diverse and inclusive workforce brings many benefits to a company, there are also challenges to the building the same:
- Lower participation of women in STEM: In many fields, there are a fewer number of female applicants for posts that pertain to STEM (Science, Technology, Engineering, and Math) or so-called ‘traditionally male-dominated’ careers. This is not surprising given that for every two girls, five boys are enrolling for professional STEM courses. One simple approach to overcome this imbalance is to set annual targets and engage in affirmative action policies during hiring. Referrals are another great way to address gender imbalance. By motivating employees to refer to women candidates (over and above rewards given for referring male candidates), companies can tap this hidden resource pool with good results.
- Conscious and unconscious biases: Another challenge is addressing biases against women employees – both conscious and unconscious. Unconscious biases are perhaps more challenging to tackle, because managers and senior executives in positions of power may not even be aware of the fact that they are acting unfairly. For example, some organizations are guilty of having a ‘hiring bias’ or ‘recruiting bias,’ where male candidates are perceived as more competent than female candidates. Psychological biases such as confirmation bias, affinity bias, halo effect, distance bias, and other stereotypes may affect performance reviews and promotions as well, which adversely affect inclusivity. To overcome these biases, it is vital to establish a fair process where the organization or a third-party defines the review parameters, lays down the evaluation process of employee growth and progress, and makes one or more mid-review meetings mandatory.
- Lack of awareness: A great way to promote diversity within the organization is to recruit volunteers as ‘diversity ambassadors’ to champion the cause internally. It is essential to highlight the organization’s stance on inclusive and equal opportunity policies – both in external as well as internal communications. As work environments change and become more diverse, it necessitates routine sensitivity training for male managers and other employees to deal with the changing workforce. Organizations also need to invest in senior management training and executive mentoring programs which nurture women employees to develop skills for senior management roles. Organizations need to ensure women-friendly HR policies – including childcare and maternity policies - and, if required, even review existing hiring and compensation practices.
Businesses and HR leaders need to consciously invest in talent diversity to build a representative workforce and broaden their appeal in various market segments. It is not enough to champion diversity, but also ensure that its benefits can be harnessed as well. To nurture diverse talent effectively within the company is to have a more balanced, fair, and profitable organization.