Article: DEI for India's economic boost


DEI for India's economic boost

Diversity, Equity, and Inclusion (DEI) as crucial for India's economic growth and reaching its $5 trillion target.
DEI for India's economic boost

In a country as pluralistic as India, Diversity, Equity and Inclusion (DEI) has the potential to become a powerful tool not only as a safeguard against discrimination and intolerance, but as a strong economic imperative. In fact, DEI has the potential of playing a crucial role in helping India reach its goal of a $5 trillion economy by 2025. By ensuring that individuals from all backgrounds have equal opportunities, India can unlock untapped potential and accelerate its economic growth. Inclusive workplaces could unlock innovation, and sustainable development for India's rapidly growing economy. It encourages dialogue, understanding, and empathy among a diverse workforce, contributing to organisational growth. 

Research has consistently shown that companies with diverse leadership teams perform better financially. Given India’s diversity, a range of benefits awaits Indian Inc. DEI boosts market competitiveness and innovation by fostering diverse perspectives and ideas. Such strategies help attract and retain top talent, which further enhances an organisation’s ability to consistently deliver a satisfactory experience to a diverse customer base. Secondly, DEI strategies help in ensuring legal compliance, mitigate risks, and protect a company's reputation. This in turn reduces the potential for discrimination lawsuits and turnover. Thirdly, DEI initiatives improve employee morale and engagement, fueling higher job satisfaction, lower turnover rates, and increased productivity, while also aligning with societal expectations and responsible business practices.

Is DEI truly strategic? 

Several enterprises adopted DEI goals with much fanfare only to observe a slipping interest or slippage in its application. A recent Gallup study for instance, records that despite the application of DEI, a whopping 77% of employees remained unengaged at work. This lack of engagement was measured at upwards of $8.8 trillion. Barely 1 in 6 Fortune500 organisations publish their DEI goals. According to a report from GlassDoor, access to DEI programs surged through 2021, but were stalled in 2022 indicating that top leadership may have more on agenda. Additionally, social phenomena such as the Great Resignation, Quiet Quitting, and mass quit, remain evidence that indicate a poor application of DEI goals.

Resource allocation, prioritisation, market relevance, over-emphasis on metrics, cultural quotient, and an inability to provide long-term commitment are some of the reasons for wrong application of DEI programs. DEI initiatives require time, effort, and financial investments. For some organisations, particularly smaller ones with limited resources, pursuing DEI strategies may divert resources from other critical business priorities such as product development, market expansion, or technological innovation. In such cases, the strategic value of DEI should be carefully weighed against other pressing needs. Research has shown how enterprises adopting a context-specific strategy introduced a game-changer. Therefore, to a country like India, known for its rich tapestry of cultures, languages, religions, and traditions, DEI could mean a significant economic catalyst.

Key takeaways to DEI in India: 

Contemporary and India-specific studies have indicated several gaps when it comes to the application of DEI programs. On the brighter side, there has been an uptick in the implementation of such programs, but there are wide variances too. A recent Deloitte report, for instance, found 70% LGBTQIA employees facing discrimination at the workplace compared to 42% globally. According to an International Labour Organization (ILO) report, India's gender gap widened to 50.9% with only 19.2% women in the workforce as compared to 70.1% men. Better women participation could alone add $0.7 trillion to India’s GDP. 

An in-depth study commissioned by Walchand Plus in October 2022 reveals three crucial strategies for enterprises keen to unlock DEI 2.0 objectives. Barely five percent of the crucial sectors such as Banking/Finance, FMCG, IT, Manufacturing, Hospitality, Pharmaceuticals, e-Commerce, Ed-Tech identified as having been able to achieve their DEI goals. Among aspects that could correlate with awareness, organisations reported lack of metrics (28%), lack of understanding of benefits (23%), lack of awareness about DEI (12%), and lack of budget (8%) as crucial challenges to adopting DEI. Cultural resistance (40%), lack of top management intent (36%), resistance to change (35%), inadequate training (33%), and communication issues (30%) arose as other crucial challenges. The study resonates with several international findings on DEI.

 While the importance of Diversity, Equity, and Inclusion should not be dismissed, it is crucial to approach DEI as a nuanced and context-specific strategy rather than a one-size-fits-all solution. For some enterprises, the strategic value of DEI may be more evident, while for others, it may not be as immediate or significant as initially thought. Organisations must assess their unique circumstances, industry dynamics, and resource constraints when determining the role of DEI in their overall strategy. A thoughtful and balanced approach to DEI will ensure that it contributes meaningfully to a company's success without compromising other vital business objectives.

Through fables, school textbooks may have taught us the reason for diversity, equity, and inclusion. However, the wisdom from such textbooks alone is insufficient when it comes to building an equitable workplace. On the contrary, DEI goals have become more trickier to implement and complicated to track today than in the mid-60s. Unfortunately, a DEI program may not be implemented as a DIY tool given these require a long-term vision and commitment. Maintaining a consistent commitment to DEI can be challenging, especially when faced with other pressing business priorities. Therefore, the industry not only needs astute professionals but also credible training programs to unlock the benefits of DEI 2.0.

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Topics: Diversity, Economy & Policy, Business

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