While social justice typically is the initial impetus behind inclusion and diversity efforts, companies are starting to see diversity as a source of competitive advantage and a key enabler of growth, a panel at FIA Expo agreed. But experts warned that the events of 2020 could have a negative impact on workforce dynamics and firms must double down on diversity efforts to build a more equal workplace.
"It's important to be able to connect diversity, equity and inclusion strategies to business outcomes, and to demonstrate the ways that we can garner returns on investments when we support our people, our customers, and the community," said Tamara Vasquez, global head of diversity and inclusion at S&P Global. "As a global organization, we have to have a diverse workforce, not just for the benefit of our employees, but also to ensure that we are reflecting the customers that we're serving and meeting their specialized needs."
Alexis Krivkovich, a senior partner at McKinsey & Co, which recently published its annual Women in the Workplace, the largest study of its kind that tracks the progress of women in corporate America, talked about the company's research into the link between diversity and a company’s financial performance.
"We found that companies with gender diversity in their executive teams outperform on financial performance by 25%. Those with racial diversity outperform by more than 30%, so there is a very clear financial connection there, and this is growing over time," she said.
Yet, despite these numbers, companies are often slow to make changes, with gender parity in the workplace predicted to be almost 100 years away, said Ray Dempsey, the chief diversity officer at BP Americas. The numbers show broader measures of equality in the workplace are even farther away, he said.
"The saddest part is that this is a scenario for gender equality, and gender is further ahead than race, disability or sexual orientation," Krivkovich said. "Women make up 47% of entry-level positions in corporate America, but at the C-suite level, this falls to 21%. When you look at intersectionality, it's even worse and I would argue that the gains that we have seen over the past six years, which have been particularly concentrated at the top where we had the most ground to make up, have largely been for white women. With women of color, we start at 18%, but by the time we get to the C-suite it's down to 3%."
Speaking about the effect that the Covid pandemic has had on equality in the workplace, Krivkovich said the US is currently at a crossroads and the decisions that companies make today could have consequences for equality for years to come.
"On one side, we've been forced into this experiment around remote work, which could unlock a level of flexibility in the workplace and enable new talent pools and allow a different way of envisioning a lot of these top jobs," she said. "On the flip side, this is a pandemic with huge humanitarian implications, and these are not falling equally on the workforce."
Working mothers facing a lack of childcare and schooling are disproportionately holding those responsibilities at home. Meanwhile, women of color, who already face more barriers to advancement than most other employees, are coping with the disproportionate impact of Covid-19 on the black community as well as "dealing with racial justice that's falling disproportionally on their shoulders to guide their companies and organizations through," Krivkovich said.
As a result of these dynamics, more than one in four women are contemplating stepping back or stepping out of the workplace environment altogether, she added.
"If that were to occur, we would unwind all the gains we've made and we'd probably unravel even more in the context of women of color," said Krivkovich. "If you look at past market disconnects, what you see historically is that women, people of color, those with disabilities disproportionately lose out as jobs disappear from the workplace, and then when they reappear, it takes them longer to get back in. This is a really critical moment for companies to be doubling down on their efforts around diversity."
Racial diversity was an issue that was examined in-depth on the panel, with speakers saying that until now racial injustice has often gone unspoken and unaddressed.
Keisha Bell, managing director and head of diverse talent management and advancement at DTCC, talked about the importance of building a community of colleagues by having honest, intentional dialogue about race in the workplace, something that she wrote about, both internally and for FIA, after the death of George Floyd and others in police custody.
"I wanted my colleagues to have context [about the everyday experiences of people of color]," she said. "Our employee population also expressed a desire to do something more and put allyship into action…what happened to George Floyd wasn't new, it wasn't isolated. So, it's imperative that this dialogue in the workplace continues."
Bell also emphasized the importance of companies demonstrating awareness and taking a stand against racial injustice and reinforcing that with action.
"While action like community engagement and community investment are wonderful ways to illustrate support, companies should also focus their efforts internally because there is a community of employees who require support during times like this," Bell said. "Companies should prioritize diversifying their boards and their C-suite. This is putting their words into action and would be a beacon of support to those black and brown employees who are very much aware of what the C-suite and boards look like right now."
Speaking about the best practices, firms should employ to advance a culture of diversity and inclusion, Vasquez said initiatives need to be led by business managers.
"For those of us who have been managers in our former lives, we recognize that for all the efforts the HR team puts into thinking about recruiting strategies and retention, it's really managers who make the decisions about who to hire and promote. To influence cultures, you have to be able to influence managers. It's not just an HR theme, D&I really needs to be led by the business and business leaders."
For global organizations, there is not a one-size-fits-all approach to diversity and inclusion, said Erika Irish Brown, chief diversity officer at Goldman Sachs.
"What you should do is give people the tools, influence leaders and build their competencies in a way that enables them to lead from the front and take a region-led, a business-led or a division-led approach," she said.
In terms of measuring the progress of diversity, Brown believes in setting aspirational goals. "Representation does matter, but you also need to think about what you're measuring, what you're collecting holistically, and then measure your progress towards goals that can be viewed as aspirational," she said.
"These could be goals around entry-level recruiting, which is a pipeline to leadership, or vice-president representation, so, it's not just about bringing folks in, it's about once they're at the firm, are you promoting them? Are you retaining them? Are you developing them? We are a very metrics-driven industry and performance should be key in diversity and inclusion as well."
For more Expo coverage, visit https://www.fia.org/marketvoice
- Social Responsibility