Human Capital Trends: Diversity Takes the Spotlight

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Human Capital Trends

69% of executives rate diversity and inclusion as an important issue (up from 59% in 2014).

In 2017, the proportion of executives who consider inclusion as a top priority has risen 32% from 2014.

These statistics are just a few from Deloitte’s global research, which included 10,400 business and HR leaders across 140 countries. The global surveys were split between large companies (more than 10,000 employees), medium-sized companies (1,000-10,000) and smaller companies (less than 1,000 employees). The resulting 2017 Deloitte Global Human Capital Trends report provides an informed view into the future of work—and what some consider to be the Fourth Industrial Revolution.

One of the nine trends identified is the reality gap between diversity and inclusion (D&I) efforts and results. Today we’ll take a look at that trend, discuss why things need to change and why diversity and inclusion are taking center stage, review the old ways versus the new ways of approaching diversity and inclusion, and lay out steps you can take to shorten the gap.

Snapshot: Diversity and Inclusion Today

Human Capital Trends

Research shows that diverse teams are more innovative, engaged and profitable. But today’s diversity and inclusion needs are more than just profits and productivity. In today’s world, D&I impacts brand, corporate purpose, and performance.

We’ve seen scrutiny of lack of diversity on the news, and now that scrutiny is coming from within the companies themselves. More people are champions of diversity and inclusion, and the Millennials see it as an essential part of corporate culture. This moves beyond building diverse teams, to insuring that everyone has a voice and is heard. The next generation, Gen Z, will be the most diverse to date, and companies will need to make way.

Despite the increased scrutiny, and increased awareness of unconscious and explicit bias, results are appearing too slow. The most popular way to address these issues is training, and while helpful, it appears that making people aware of diversity and inclusion issues is not enough. Organizations must take a larger stroke, by implementing data-driven solutions and increasing transparency. They also need to immerse executives in the world of discrimination and bias so that they can truly understand how they affect decision-making, talent decisions, and business outcomes. As Deloitte says, “A set of ‘new rules’ is being written that will demand a new focus on experiential learning, process change, data-driven tools, transparency, and accountability.”

The era of HR filling a quota to meet diversity goals is over. Ownership of diversity and inclusion efforts now fall into the laps of leadership, with senior leaders holding leaders at all levels accountable to make concrete, measurable progress with diversity and inclusion efforts. Why the shift?

Five Reasons Diversity and Inclusion Are Taking Center Stage

Human Capital Trends

  1. The Global Political Environment

Employee sensitivity is up due to immigration challenges, nationalism, and fear of terrorism appearing frequently in the press. Employees are personally concerned with these issues and want their employers to offer perspective. In this way, D&I now touches issues of employee engagement, human rights and social justice.

  1. Organizations are Becoming Global Entities

As large organizations increasingly define themselves as global entities, religious, gender, generational and other types diversity issues become a greater reality.

  1. Diverse and Inclusive Teams Outperform Their Peers

There are many studies showing the benefits of diverse teams and inclusive cultures. Deloitte reports, “Companies with inclusive talent practices in hiring, promotion, development, leadership, and team management generate up to 30% higher revenue per employee and greater profitability than their competitors.”

  1. Gender Pay Equity in the Spotlight

Gender pay disparity is increasingly in the public eye. Companies and even government administrations are taking the necessary steps to make improvements. For example, Salesforce analyzed 17,000 employee salaries and identified a gender pay gap; they then spent roughly $3 million to even it out. On a governmental level, Canada’s Justin Trudeau appointed a gender equal-pay cabinet in 2015.

  1. Baby Boomers Staying in the Workforce Longer

Career trajectories have changed due to Baby Boomers remaining in the workforce longer. That delay in retirement means a workforce with generational diversity like we’ve never seen before.

As you can see, the shift in how diversity and inclusion is approached needs to expand. It’s helpful to look at Deloitte’s following table which how D&I was approached in the past, versus how it needs to be approached now.

Human Capital Trends

Four Ways To Start Amping Up Your Diversity and Inclusion Efforts

Human Capital Trends

So if you’re an organization who is just getting ramped up for diversity and inclusion efforts that extend beyond training, where do you begin? Do you toss your training programs and start fresh? Here are the first four steps to take.

  1. Share Research With Leadership

Providing data on the value of diversity and inclusion can get top leadership on board. But being on board is just the first step. Then they need to be held accountable through metrics and reports on diversity in promotion, hiring and compensation.

  1. Use Analytics

Human Capital Analytics can identify patterns of racial bias, inequity in compensation, and bias in hiring and promotion much easier (and significantly faster) than any HR department can. After these patterns are identified, a more targeted plan can be implemented.

  1. Extend Efforts Beyond HR

Diversity and inclusion should be on par with compliance, IT and security, practiced by everyone and owned by leadership. It is not just an HR responsibility—it’s a business responsibility.

  1. Pay Attention to Global Differences

Remember that as organizations become more global, the diversity and inclusion needs will vary by region. The problematic areas you address and plans you put in place for the U.S. won’t necessarily be the same as the problems and plans in the Middle East. Listen to your employees’ interests and concerns, then decide what needs to be measured from there.

Expansion and Agility

Human Capital Trends

As global networks expand and technology transforms the workplace, D&I models will continue to evolve. There isn’t a strategy organizations can develop today that will still apply in a decade. However, when diversity and inclusion is considered part of the corporate infrastructure, leaders can take the same agile approach to closing the gap that they take to surviving a world in constant flux.

Have you noticed an increase of buzz around diversity and inclusion in your workplace? I’d love to hear about any initiatives you’ve experienced. Leave me a comment below, send me an email or find me on Twitter.

*For more research-based insights into human capital trends, read Deloitte’s Global Human Capital Trends report.

 

 

 

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