We live in a connected global world and it’s no surprise that more diverse organisations are better positioned to achieve increased performance. However, having a balance of gender, ethnicity and ages doesn’t automatically result in inclusivity. Most business leaders understand that having a diverse workforce is important to succeed in global markets, however creating an environment where people can be who they are, that values their unique talents and perspectives and makes them want to stay could be a challenge.
To unlock the talent potential and reap the rewards of diversity, culture change needs to happen first. While specific HR policies are important, diversity and inclusion also needs to be about making each person valued and creating psychological safety on day-to-day basis, as well as continuously invest in their development.
Closing the gender gap
According to the World Economic Forum, it will take 99.5 years to close the global gender gap. The closing of the gap could result in added 15 percent of GDP to economies, some of them worth over $6 trillion. The potential of inclusivity in business is compelling, however unlocking these benefits must begin with focused and measurable action from the business.
Some sectors are doing better than others. In technology, women accounted for nearly 30 percent of the sector’s entry level workforce in 2019. Last year, over 13 percent of women were promoted compared to 12 percent of men and the overall hiring rate of women increased to 27 percent.
McKinsey’s Diversity Matters research has found that companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians and companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians. In the UK, greater gender diversity on the senior leadership team corresponded with the highest performance uplift: for every 10 percent increase in gender diversity, EBIT rose by 3.5 percent.
Bringing diversity into the boardroom
In 2018, the Annual Corporate Directors Survey has highlighted that nearly 95 percent of directors agree that diversity brings unique perspectives to the boardroom, while 84 percent believe it enhances board performance. To recruit more diverse board level leaders, organisations have to cast a wider net and focus on skills and experience, rather than the titles candidates have held in the past. This is due to the fact that female, non-white directors joining corporate boards are more likely to have different backgrounds than their white male peers and less likely to be current or former board member.
To realise the of potential diversity and inclusion, organisations should take full advantage of the opportunity diverse teams represent, particularly when it comes to the talent pipelines, such as attracting, developing, mentoring and retaining the next generation of global leaders at all levels.
Diversity is also increasingly becoming a competitive advantage for companies that attract and retain diverse talent. Research suggests that more diverse companies are more successful at winning top talent and improving their customer service, employee satisfaction and decision making, which in turn leads to increased revenue.
At Acumen we offer leadership development programmes that give leaders at all levels practical tools to help solve real life challenges. In most cases we design the interventions specifically for each customer, but we also offer a wide range of off the shelf programmes for those who prefer this approach. For more information, please contact firstname.lastname@example.org.