What is the commercial benefit of inclusion of diversity?
Economic (and as a result political and social) progress is impacted by an intense war on talent (attraction, development, retention) and the need for government, organizations and individuals to transform and adapt in an increasingly competitive and global environment.
To achieve this, businesses need to be agile and innovative which in turn is directly correlated to the culture in the workplace and the calibre of the talent available.
As Tim Cook (CEO, Apple) says:
‘Inclusion Inspires Innovation’.
The next generation of leaders are strongly motivated by social responsibility and inclusive cultures.
A recent Business in the Community survey revealed that 86% of millennials in Ireland want to work for a values-driven company.
And CEOs around the world know this – a key result of the PwC global CEO survey (highlighted at Davos in January) was that 87% of CEOs are promoting talent diversity & inclusiveness to find the right people.
In the UK and US in particular (and less so in Ireland), the resultant benefits have been researched and documented; although there is currently little focus on return on investment. For example, a Catalyst study revealed that those Fortune 500 companies with the greatest representation of women on their boards outperformed by 53% (on a return on equity analysis) those with the lowest representation.
Within the private sector in Ireland, the success rate of initiatives can be patchy because organizations and their leaders misinterpret Diversity itself as the answer and under-invest in Inclusion & Belonging. Indeed, only 14% of Irish companies have a female CEO (or Head of Operations) and this ratio is falling.
Businesses are nothing without their employees. There is a race to attract and retain great people to deliver for the business today, and to transform the business to meet future challenges.
Attract: open, inclusive organisations are more attractive to graduates, working parents and those from different backgrounds. Almost every organisation has the standard “non-discrimination” clause, but it has become wallpaper.
Being an employer of choice reduces staff acquisition costs as the interest comes from the candidates, not the other way around.
Retain: organisations that value and develop their staff reduce attrition and the knock-on expense to replace and retrain new employees. It is estimated that it costs 150% of an employee’s gross salary to recruit, equip and train them to an effective level of competence.
Transform: The business ecosystem is changing fast. By investing in your employees and welcoming new mindsets, experiences and age-groups, businesses will have the agility to change quickly and make the most of opportunities that come their way.
Similarities to the “Corporate Social Responsibility” movement can certainly be drawn, especially now established fund managers are starting to take an interest in the share prices of companies with a strategic ambition of inclusion.
For example, Bloomberg’s Gender Equality Index and Thomson Reuters Diversity & Inclusion Index, and LGBT Capital’s Investment Fund.