Having a Diversity and Inclusion policy is crucial for all businesses, and although this has been a necessity for a while now, there is still a surprising number of companies yet to take it on at board level. True, these companies have policies in place to increase diversity in management, but in many cases the C suite remains largely unchanged.
According to a Gartner report although women account for 53% of front-line employees, they make up only 29% of the C suite. So if the stats speak for themselves, what can businesses do to ensure that Diversity and Inclusion is a policy not just in name only, but in real, tangible actions that can be seen to improve the workplace? And what are the benefits that companies can see when they fully embrace diversity in the workplace, all the way up to the C suite?
Financial improvements
Diversity can have a real impact on financial profits. A diverse team is more likely to be able to recognise and take action on new and different market opportunities; they’re more likely to identify unmet market needs and they’re more likely to use their expanded market awareness to produce results for the company as a whole. The reason being: they’re diverse. They’re benefiting from a broader range of experiences, knowledge of specific demographics and expertise in wider areas.
In fact, a Harvard Business Review reports that profit margins for companies with diverse management teams are almost 10% higher overall, concluding that “diversity produces financial gains”- echoing similar reports from McKinsey & Company, who found that executive teams with gender, ethnic and cultural diversity were more likely to improve financial performance globally. In fact, gender-diverse companies are 15% more likely to outperform others, while racially diverse companies are 35% more likely. The bottom line is that a diverse C suite can bring renewed health to a company’s finances.
Advanced innovations
A diverse management team has a wealth of knowledge and differing viewpoints to bring to the table- enabling companies to not only perform better financially but to be more innovative and progressive in their industry too. Diversity of thought is a powerful tool, helping businesses to avoid falling down the slippery slope of groupthink.
Appointing more female executives can change the way companies behave; according to Forbes, women currently control 40% of wealth globally, and either make up or directly influence 80% of all purchases. And bearing in mind that diverse companies are more likely to focus on research and development, it stands to reason that companies who invest in diversity are set to come out on top. Not only will they be better informed, but they’ll be more likely to adapt and grow, leading innovation and ultimately experiencing more success as overall.
Improvement in employee engagement
A supportive workplace is essential for productivity and wellbeing amongst staff. A diverse C suite means that companies can be more representative, and this will nurture a culture of inclusion and respect. A lack of diversity can have the opposite effect- people resent the perceived bias at top level, and this is displayed with a lack of engagement and employees who, ultimately, will move on to other jobs more quickly.
Perceived bias can have a huge impact on business. Coequal, formally the Centre for Talent Innovation, found that when employees perceive bias in the workplace, they’re three times more likely to move jobs in a year or less, and almost three times more likely to hold back on new ideas. 33% feel alienated at work, 75% say they’re not proud to work for their company and 80% do not refer people to to work at their company full stop. This isn’t the culture businesses should be striving for and having a diverse management team can play a huge role in reversing these alarming stats.
Better flexibility
Businesses need to adapt to change, and they need to be open to doing so continually and without question. There’s no time to stand still; new innovations, new technologies and new opportunities arise every single day. Successful businesses need to be flexible and ready to take on the challenge. This can be difficult if there’s only one view being represented at senior level.
A diverse C suite is more able to adapt to change and embrace transformations that will serve the business well. Taking risks and forging ahead with new ideas can make or break a business; having a wider approach to these kinds of decisions can make a huge difference when crunch comes to crunch.
How to achieve diversity in your C suite
Building a diverse C suite has many benefits, but it's important to get it right from the outset. Remove the barriers that prevent diversity. Make the process organic, and less about ticking boxes for the sake of ticking boxes.
• Start with recruitment. Make it an inclusive process that uses diverse language and ensure flexibility is offered too.
• Your interview process should be inclusive- make sure your interview panel is diverse.
• Support employees and encourage professional development for all staff. Make continual learning an essential part of the role you’re offering.
• Make sure your workplace is inclusive. Everyone should feel welcome and supported.
Diversifying your talent pool is the first step towards ensuring full representation at senior level. Get in touch today to find out how we can help you achieve this, and more.
