Inclusive workplace leadership can slash attrition risk by 50%: Report
Billions of dollars are spent globally each year on diversity, equity, and inclusion (DEI) initiatives, yet business leaders have minimal insight into what works and whether their investments yield any positive results.
Because workplace inclusion is particularly difficult to define, measure, and influence, it is often under-prioritised in corporate DEI efforts.
However, improving employees’ experience of inclusion -- feeling valued and respected; believing their perspectives matter; feeling happy, motivated, and that they belong; and feeling supported in their mental and physical well-being -- can deliver enormous business value, according to a new report by the Boston Consulting Group (BCG).
In India, similar to other countries, a significant gap exists in employees' experiences depending on the senior leaders' commitment to DEI. At companies where senior leaders are committed to DEI, 93% of employees feel valued and respected as opposed to 62% in companies where leaders are not viewed as committed, says the report titled ‘Inclusion Isn’t Just Nice. It’s Necessary’.
The report explores findings from BCG’s BLISS (Bias-Free, Leadership, Inclusion, Safety, and Support) Index, a tool that draws upon data from more than 27,000 employees across industries from 16 countries and uses statistical modelling techniques to identify the feelings of inclusion that matter to retention decisions and the workplace factors that drive those feelings of inclusion.
An inclusive culture is important for recruitment: Two-thirds of LGBTQ employees and employees with disabilities chose not to apply or declined an offer due to lack of inclusion in the work culture - as did 39% of straight, cis-gendered men.
When companies have diversity on the executive team, 92% of employees report feelings of belonging at work, whereas only 60% of employees feel as though they belong at companies without diversity on the executive team.
The report notes that a significant gap exists in employees' experiences based on direct managers' actions. When direct managers create safe working environments, 90% of employees feel their perspectives matter, which drops to 49% when managers do not create a safe working environment.
Inclusion impacts retention: Companies that increase their BLISS Index scores from the lowest quartile to the median can cut attrition risk by approximately 60%.
To improve employees’ happiness, well-being, and retention, the report details actions leaders should focus their inclusion efforts on:
- Demonstrating leadership commitment to DEI
- Building diversity at the leadership level
- Equipping direct managers, and making them accountable, to create safe teams and environments
- Building stringent safeguards against discriminatory and biased behaviours
- Measuring outcomes focused on DEI
"The BLISS Index has shown conclusively that inclusion directly affects the decisions people make about their jobs. By investing leadership focus and resources strategically to build a more inclusive workplace, companies can not only make themselves attractive to a larger talent base, but also reduce attrition related costs and ensure higher productivity. Inclusion today is not a good to do; but can be a superpower for companies - a lasting source of strategic advantage," said Seema Bansal, Partner & Director, Social Impact, BCG.