20 December 2018 | By John Cleary
Diversity in the workplace: Boon or distraction?
Has workplace diversity and inclusion moved beyond mere political correctness? And if so, what makes it such a smart corporate option?
For reasons largely based on social justice and legal compliance, workplace diversity embraces concepts such as equal access to the workplace and equal treatment for all hired employees. Though often couched primarily in terms of ethnicity and gender, notions of diversity and inclusion are actually much broader and may encompass matters such as disability, age, sexual orientation, religious and political beliefs and affiliations, and much more.
In fact, as the comparatively recent emergence of transgender issues has demonstrated, policymakers should be aware that, over time, definitions of diversity are subject to reinterpretation and reclassification. Nevertheless, the major impact in many jurisdictions has been the promotion of women to more senior roles, the increasing representation of sexual and religious minorities, as well as the introduction of laws giving those with disabilities better access to workplace roles.
Blanca Chinchilla Fidalgo, who is part of the Talent, Diversity & Inclusion team at Vodafone Spain, has this to say: “We offer equal opportunities regardless of race, nationality, cultural background, gender, age, marital status, sexual orientation, gender identity, disability, religious or political belief. We have some projects such as Reconnect or Code Like a Girl. We also we participate in events that support the LGBT community.”
What research tells us
As with workplace change of all kinds, how effective policies of diversity and inclusion prove to be often depend most of all upon the political will behind the rules. Where the content majors on rhetoric, symbolic participation and compliance, any residual discrimination usually tends to become more subtle to avoid the risk of penalties. But where diversity is whole-heartedly embraced and celebrated many companies can derive considerable benefits.
For instance, McKinsey’s study Delivering Through Diversity states that, “Many successful companies regard I&D [inclusion and diversity]as a source of competitive advantage, and specifically as a key enabler of growth.” This reassurance is echoed in similar studies by Credit Suisse, as well as PWC, whose 2018 diversity project asserts: “Diversity is the solution, not a problem to solve.”
Some critics nevertheless argue that many diversity initiatives have not been subject to the same robust standards of accountability as other human-resource activities, and suggest that causation (e.g. the link between more female board members and profitability) remains unproven. Improvements have often been slow, and pragmatism usually dictates that suitability for a role remains the key determinant with diversity sometimes a distant secondary consideration.
And as María del Mar Martínez, a senior partner at McKinsey Spain, ruefully observes, you can still find some evidence of tokenism: “There’s a lot of ‘I’ve got the plan ready’, but there is no follow-up.”
Yet even where diversity and inclusion thrive, the UK firm Investors in People cautions there remains a danger the business may fall victim to its own success: “One problem is that the more diverse an organisation gets, the greater range of viewpoints, motivations, desires and beliefs you’ll find, and the harder it can be to unite people under a common purpose.”
Understandably, much company policy is framed to ensure legal compliance. Elsewhere, there are often set targets (e.g. for workforce ethnicity and gender balance within management teams), and sometimes diversity quotas appear in supply contracts. However, for businesses seeking to reap diversity dividends, truly inclusive diversity – i.e. ensuring staff from diverse backgrounds feel included and accepted by all ‘mainstream’ workforce cultures – can be a harder nut to crack, let alone to sustain over the longer term.
The answer here is continuous training, mentoring and professional development throughout the company. It is only when diversity and inclusion become endemic features of the workplace that businesses can expect to make substantial gains.
What drives diversity?
While it could be argued individual activists and campaigning associations drive diversity forward, they primarily seek to influence equality legislation. Historically speaking, diversity law was the initial primary driver, and compliance is still a major factor.
However, there is a range of subsidiary influences. Changing demographics have created a better-qualified and much more richly diverse labour market. The quest for innovation and a competitive edge has encouraged businesses to broaden their search for talent while the success of top global companies employing diversity to broaden their market appeal (e.g. Colgate-Palmolive, Cisco Systems) has prompted others to follow suit.
Furthermore, the global profile of certain hi-tech companies and individuals, usually supported by blanket social media coverage, has enabled them to influence contemporary cultural attitudes towards diversity and inclusion on a hitherto unimaginable scale.
For instance, Ms. Rosenblatt, a Chinese-American product planner for Microsoft’s HomeAdviser.com, says one only needed to have a coffee in the cafeteria to learn that Microsoft was an inclusive company: “I don’t think I was hired because I’m Asian. I’m smart and I’m here with other smart people. The only time I think of ethnicity is when I work with partners outside of Microsoft.”
Legislative frameworks covering workplace diversity
• At an international level, Article 27 of the UN Convention on the Rights of Persons with Disabilities (UNCPRD) champions the rights of those with disabilities and affirms their right to work and employment.
• The EU Charter of Fundamental Rights (Article 21) outlaws discrimination on six grounds (sex, racial or ethnic origin, religion or belief, disability, age, or sexual orientation) as well as nationality. In addition, each member state has translated various EU directives on workplace diversity into their own national legislation – which means there could be minor local variation in requirements.
• In Britain, the main legislation on equality, diversity and inclusion is contained within the Equality Act 2010 and the Human Rights Act 1998.
• US federal legislation which promotes workplace diversity is based on civil rights acts, the Americans with Disabilities Act, the Equal Pay Act and the Genetic Information Non-discrimination Act. In addition, many states and local governments have drafted their own laws covering equal employment (e.g. banning discrimination on the grounds of sexual orientation) and to protect those who support anti-discrimination litigation.
In what could become a rare piece of positive discrimination, a new proposal from the European Commission asks for a quota of 40 percent of women on the boards of directors of major publicly-listed companies. If adopted, this proposal would see companies whose non-executive directors are more than 60 percent male compelled to prioritise women when presented with candidates of equal merit.
This move no doubt reflects the changing mood elsewhere in Europe. In recent years, Norway and some individual EU member states have all enacted legislation introducing mandatory quotas for women in the private sector.
Corporate diversity in action
Cristina Cabella, IBM’s global Chief Privacy Officer, explains how her organisation approaches the issue: “Diversity & Inclusion are part of IBM values and key components of our workplace and business. IBM has a long history of leadership in recognising and enhancing the characteristics of each employee regardless of culture, sexual orientation, generation or abilities.
“The driving forces of our Diversity and Inclusion programs are partnerships with external associations (schools, universities and industry associations, other companies), the involvement of employees through Business Resources Groups (all volunteers) centred around a common area of interest or a certain constituency, a strong collaboration between HR and all business units in designing and deploying diversity programmes, and the involvement of the top management team. We believe the tone must be set from the top, having leaders engaged in nurturing a diverse and inclusive workforce,” she says.
Most contemporary evidence suggests a genuinely diverse team should always win hands down. But only when everyone is treated as an individual, feels comfortable in their own skin, is allowed to work in their preferred environment and collaborate with other very different people to create something better and beyond what they could ever achieve alone. For organisations, the challenge is huge, but the rewards can be immense.
As an employee of a large Italian bank put it: “Being from a minority background, I’ve faced challenges in my life, but knowing that my employer does everything to ensure that I have a safe and harmonious work environment helps me feel not only valued at work but also in society as a whole.”
‘Getting started is the hardest task for many companies’
Michelle Raymond, a Global Diversity & Inclusion consultant for multinational corporations and higher education institutions in Europe and North America, outlines some aspects of workplace diversity and how to best implement it.
What policies have companies put in place to promote diversity?
Raymond: Beginning in 2017, the European Union implemented stricter legal requirements for transparency on non-financial information such as disclosure of diversity policy for large listed companies. This included a requirement for large listed companies to provide insight into their diversity policies in relation to their executive and supervisory boards.
In response, many large listed companies in Europe have implemented changes to their diversity policies to comply with these stricter EU requirements. For example, the European Commission itself implemented a new Diversity and Inclusion strategy, focusing on four main target groups: women, disabilities, LGBTQI* and generational (age) diversity.
A key feature of the Commission’s new human resources policy includes measures to bring female representation in management to at least 40 percent by November 2019. The first gender quota came into effect in 2003, when Norway became the first nation to legally mandate a gender quota to address inequities in the corporate boardroom and promote women’s economic interests. This law mandated publicly traded companies to enact a 40 percent quota. The result was a 31 percent increase in just nine years.
EU member countries that have since implemented similar gender quota measures include Germany, Spain, Belgium, France, Italy, and the Netherlands. Additionally, companies such as Bayer AG (Germany), Barilla (Italy), Anheuser-Busch InBev (Belgium), and Ernst & Young (Global) have signed up to the UN Women’s Empowerment Principals, a set of guiding principles for businesses to empower women in the workplace.
What do employees at these companies say about the policies, or about diversity in general?
Raymond: Most of my D&I clients are based in Madrid, Spain, where I have spoken with many executive stakeholders and local employees about their company’s diversity policies. The hot topic in Spain right now is gender diversity, with LGBTQI* inclusion a close second.
Many of the diversity initiatives implemented have been employee-driven. There is a growing sense of the need for change, and it’s the employees themselves who are advocating for the creation of more inclusive workplace environments. The problem? Many of these employee advocates are grappling with the question:“How?”
I recently spoke about gender identity and sexuality at a multinational consulting firm. After the workshop, a comment from one of the employees was: ‘We want to start an LGBTQI* resource group at our office, but no one here is openly gay. So how do we convince our employees these topics are important?’
In addition, frustration about the funding of these initiatives has left many employees discouraged, with some choosing to side-table or completely abandon their diversity projects.
To give an example, most multinational firms with offices in Spain have diversity budgets of less than 5.000 Euros – if any at all. When a local office asks for funding from their regional headquarters, they can be asked to produce reports measuring ‘successful year-long D&I events’ to back-up their request for new funding.
But how is a local firm with no funding supposed to achieve a successful event without finance, marketing support, or resources of any kind? Faced with this ‘What comes first, the chicken or the egg?’ logic, more often than not employees abandon their diversity initiatives or finance them personally. This is a stark contrast to the robust ($50,000+) diversity budgets most of these companies offer their North American branches.
Have companies encountered any legal obstacles when trying to implement their goals or diversity policies?
Raymond: One of the biggest legal obstacles European companies face is EU data privacy laws. In the United States, it is not uncommon to be asked: ‘What is your gender?’, ‘How do you sexually identify?’, ‘What is your ethnicity?’ and ‘What is your religion?’ during the job application process.
These data-sensitive questions serve multiple purposes, one being assisting HR departments and companies to gather statistics on job applicants (to measure the performance of their corporate diversity policies).
Without a benchmark, it can be difficult for EU-located companies to gauge the success of their diversity programs and identify key areas for improvement. To further complicate matters, many EU member states have their own data privacy laws which can vary from country to country.
In France for example, employers are prohibited from collecting data about their employees relating to ethnic origins, religious opinions, sexual identity, politics or health. Some European companies have circumnavigated this obstacle by surveying their employees anonymously to obtain ‘sensitive’ data and monitor employees’ sense of inclusion and belonging.
What advice would you give companies?
Raymond: When it comes to workplace equality and just beginning to promote diversity, many US corporations can serve as a model starting point.
You should research what others in your industry are doing as regards diversity, and follow global diversity benchmarks such as the Stonewall Index to identify which companies are scoring highly in the areas you care about the most.
If your company already has well-established workplace equality initiatives in the US, I recommend setting up a conversation with your North American D&I manager to ask for educational resources and financial support.
More often than not, I have spoken to D&I managers in the US who were completely unaware their branches overseas were not receiving the same resources and funding.
I have helped local branches in Madrid receive diversity budgets for the first time simply by picking up the phone and talking to a diversity manager in their North American headquarters.
Starting an employee resource group or creating a diversity policy from scratch can be a challenging task, but it is not impossible. Team up with your other European offices, local non-profit organisations, or diversity associations for guidance and support. Don’t be afraid to ask questions.
The hardest and most important task for any company is getting started. The time is now. Take that first step!