Data shows that a diverse workforce drives innovation. The arguments around diversity and innovation can seem obvious–business needs to attract, engage, and retain the best people and cultivate an environment for team members to be their best selves. Many conversations around diversity and inclusion begin around ethics and personal benefits. Yet many businesses are making a decision to make advances on diversity and equality without being compelled by ethics or the law. ; so what the business case for a diverse workforce, equality, and more so an inclusive culture? While diversity in the workplace can drive innovation, how can we use technology to foster diversity and equality and encourage such a work culture?
McKinsey answers the question, “Is there a payoff from team diversity?”, in their study from 2003-2008, top quartile for gender diversity businesses and foreign national make up on their on their executive boards generated ROE (returns on equity) 53% higher than the companies with the poorest diversity. Further evidence from Mckinsey, shows that the financial returns of ‘workforces leading in gender diversity’ out performs by 15%. Again, when measuring for ethnic diversity, leading firms, financial returns were 35% more likely to outperform. Part of the strength of this data is its size of companies but that also means the majority of firms, are diversity poor, despite the data and business case.
While there have been many victories for LGBT rights and businesses practices, such as the UN Free and Equal Global Business Standards, the data shows that firms pay a cost for not embracing pro-LGBT business practices. Credit Suisse, Switzerland’s second largest bank, did research to measure the top 270 companies for LGBT hiring practices against the close to 3,000 companies that make up the MSCI ACWI All Country World Index, accordingly “Return on Equity and Cash flow returns are 10-21% higher than those of companies in the MSCI ACWI — and staggeringly economic profit generation is double.
Governments are waking up to these important metrics and creating reporting standards toward greater transparency in this space which could add $12 trillion to the global economy. And with more than 17% of the population now identifying has non-heterosexual, this population is too large to ignore and a lack of diversity or LGBT inclusive policies will result in huge losses, of talent and consumers, for companies that do not wake up to this shift.
It doesn’t take machine learning and AI to bring out the best of HR professionals. Simple software creates dashboards for measuring the current company strengths and weaknesses on inclusion. This software will enable action and measurable results. Technology exists now for companies to make an impact on their diversity poverty.
Technology can only be part of the solution. Everyone holds unconscious beliefs about various identity groups and these biases lead not only to weaknesses in the best diversity strategy but work against even the best efforts.
Discussing unconscious bias can be a good example of how technology has limitations and points to better strategy not just tactics. Let’s say a senior manager attends a seminar on unconscious bias training. The senior manager is now ‘woke’ and charges back to implement this training for the company. The manager pitches this to peers and decides to roll out a training to all 10,000 employees. Then each team member launches a module and everyone from the senior engineer to head of customer service, sits at their desk with headphones on eating a sandwich. HR research shows only 13% of workforces are truly engaged in their company and 26% are actively disengaged. Having an engaged workforce is just one of the payoffs from culture. The data shows that little information is retained and this is not the biggest downfall. Of the few managers who decide to implement unconscious bias insights, the real question is there a culture and power structure in place to support change and action otherwise these elearning served no purpose.
Communication and social learning software vs classroom structured training is leading to more effectual implementations and results from technology. Attending a class is very different than mentorship, coaching, and team culture that enables learning from others. Further, the earliest HR and Management software for goals often create greater wanted transparency for assigning goals and monitoring that performance. However, while widespread, these dashboards need to be updated to new systems that focus on aligning employee job goals with company strategy and employee career objectives.
Implementing this culture change needs to happen at the top and be a commitment from the CEO to empower everyone to make improvements to a robust diversity objective. Starting with a commitment to the culture is the first stop to winning change and technology is a tool to help make this a reality.