Most US firms ‘just going through the motions’ on inclusion

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A major new US study has found that many firms’ approaches to diversity and inclusion training has little impact when it comes to business and workforce outcomes, despite proof of the benefits such policies can bring when properly applied. 

The report, from HR expert and consultant Josh Bersin, suggested that in the US fewer than 12% of companies compensated or tracked senior leaders for achievement of specific inclusion or diversity goals, while:

  • 76% of companies had no diversity or inclusion goals of any nature.
  • Only 11% of recruiters received evaluated sourcing from underrepresented groups.
  • 75% of companies did not include diversity and inclusion in their leadership development.
  • Only 32% of companies mandated DEI training for employees and only a third offered such training to managers.
  • Only 22% of respondents believed their organisations’ DEI efforts had raised awareness among employees, customers, or suppliers.

Bersin’s wide-ranging study, called Elevating Equity: The Real Story of Diversity and Inclusion, states that in the US, by almost every measure (income, wealth, home ownership, education, and outlook for the future), “black and minority Americans are at their lowest level of equity since the 1970s”.

According to the report, about 80% of companies “are just going through the motions and not holding themselves accountable”. These companies were not winning awards and they were “far less profitable, resilient, and well-regarded than their peers”.

When leaders create an organisation in which everyone can be themselves and bring their differences to work, the organisation will thrive”

However, Bersin said that business and HR leaders could rectify the problem because “Business-driven diversity, equity and inclusion (DEI) programs are one of the most powerful ways to improve upward mobility in the economy. And, of course, DEI is just good business.”

Inclusion and culture were the two most important issues to address in improving DEI, said Bersin, quoting studies of 8 million workers that found that among all the employee issues studied, inclusion (a feeling of belonging) was now the top driver of employee satisfaction. He writes: “When leaders create an organisation in which everyone can be themselves and bring their differences to work, the organisation will thrive.”

The study confirmed that DEI training and recruitment practices did add value – “but not as much as you may think”. The business strategy, rather than HR initiatives, was the most powerful strategy to drive inclusion and diversity. “When the business had the right focus, the HR practices add value,” the report stated. When carried out in isolation, diversity and inclusion practices had little or no long-lasting impact.

Coca Cola, said Bersin’s study, provided an example of how diversity initiatives sometimes didn’t lead to lasting change. The firm spent years addressing the issues of racial disparities in leadership and pay (driven by a class action lawsuit for almost $200 million in 2000) and made major progress pushing diversity. “But despite the commitment from the CEO,” Bersin noted, “the company’s culture did not change, and today Coca Cola is revisiting its entire twenty-year effort to focus on inclusion and behavior change.”

When the business had the right focus, the HR practices add value”

Research by Robert Putnam is cited that suggests that the US is in a new “Gilded Age”, one in which wealthy and powerful people have more power than ever with the decline of unions and the increased focus on digital jobs and automation making US incomes ever more unequal.

Some of this “backsliding”, says Bersin, stemmed from the President Reagan era in the 1980s when “the affirmative action goals that helped people of colour and women get equal access to housing, voting rights, and business opportunities were abandoned”.

Bersin’s study singled out companies such as Accenture, Astra Zeneca, Unilever, Tetra Pak, The Lego Group, Microsoft and Siemens as among the highest performers in the DEI field. Each of them showed that they understood that culture was just as important as metrics, each defined itself through diversity and inclusion, and had worked to combat institutionalised racism and income inequality for years.

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