HR Management & Compliance

Q&A: The State of Diversity and Inclusion in 2019

Diversity and inclusion are critical to the cultural and fiscal health of any organization, and there are multiple studies that show the advantages of active diversity and inclusion practices. But how many organizations are benefiting from such advantages?

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A recent Willis Towers Watson report on diversity and inclusion helps characterize the diversity and inclusion landscape in organizations across the country. I discussed the topic with Rachael McCann, Senior Director, Health & Benefits at Willis Towers Watson.

HR Daily Advisor: It’s great to see that organizations are finally starting to embrace diversity and inclusion. What has helped make that change?

McCann: The answer is simple: A focus on inclusion and diversity is a business imperative. It is more than just the right thing to do—it is critical to sustainable human capital (or talent) management. Digging a little deeper, there are external and internal drivers with consistent themes but variation in application across companies.

External influencers include regulator and investor expectations, prospective talent expectations, ongoing brand reputation (management), and risk management; ultimately, those impact business results. Examples include the #MeToo movement; the focus on environmental, social, and governance (ESG) data; gender pay equity; voices like Larry Fink of Blackrock’s in his annual letter to CEOs; and the U.S. Securities and Exchange Commission (SEC) Advisory Committee recommendations in expanded disclosures on human capital management.

Internally, the composition of the workforce continues to change, as do expectations of the talent value proposition (TVP), ranging from company purpose and social impact and how, what, and where they work (on) to benefits, prerequisites, and a workplace that meets them where they are and where they want to go. Global companies have the added challenge of talent’s expectations of consistent global benefits (at least in theme) across all locations while adhering to local regulations and being mindful of cultural variance. Within the governance structure, companies are often pressured to have diversity across the organization from the board or shareholders—particularly within senior ranks and their boards and committees (e.g., fiduciary or governance). Again, inclusion and diversity are business imperatives.

HR Daily Advisor: Your report shows that 51% of organizations have promoted an inclusion and diversity endeavor that aligned with their benefits programs over the last 3 years. Another 68% say they will in the next 3 years. What are organizations that don’t promote inclusion and diversity missing out on, and why might they be doing what they are doing (or, rather, not doing)?

McCann: They may be missing out on recruiting critical talent and the engagement of the workforce they want to retain. Across generations, there are various benefit and resource needs. Think about how the needs of a Baby Boomer may differ from a woman who chooses to start a family later, or about LGBTQ talent, or growing a workforce that includes veterans or those with disabilities—if you as a company won’t meet their needs (or at least some of them), as a result of this war for talent, they will go elsewhere and get what they seek. As for reasons why organizations might not have diversity and inclusion programs, there are a few:

  1. They truly are focused on benefits, policies, culture, and a workplace that is mindful of talent expectations and policies that support inclusion and equity—they just don’t call it inclusion and diversity. We often see this with changes to leave programs, implementation of eldercare services, and resources related to financial well-being (e.g., across health care, retirement, and other areas of financial security). The approach they deploy isn’t as holistic as it could be, but it touches upon the diverse needs of talent and demonstrating inclusion.
  2. Companies don’t know how to get started.
  3. Senior leadership or the business isn’t “there yet” or doesn’t know how to apply this perspective to the business. A great example would be a highly male-dominated manufacturing workforce with union representation. What I would tell any company is that no first (or tenth) step is too small—it’s about progressing forward and ensuring that the strategy supports the current and desired workforce of the future and understands the power of words.

HR Daily Advisor: I’ve published a number of articles like this one about the bottom-line value of diversity and inclusion. It’s interesting that that wasn’t the primary driver. Instead, it’s attracting and retaining talent. Any thoughts on why?

McCann: Respondents of the survey were those with benefit responsibility, whether they were CHROs, total rewards leaders, benefit directors, or other similar roles. They receive employee comments and are involved in not only benefit decisions but also related communications for current and prospective employees. They are or have leaders who also have talent management or recruitment responsibility and know the importance of inclusion and diversity in attracting, retaining, and engaging talent.

Had the target respondents been in risk management contacts, for example, the reasons inclusion and diversity were priorities may have been different. For instance, if the target audience were in risk management, I would expect the reason “manage/reduce litigation risk” to be higher than 6% but would still expect employee attraction, retention, and engagement to be very high.

HR Daily Advisor: I imagine more employers know it’s important to think about diversity and inclusion than are actually making an effort to implement programs. Does your report suggest a good place to start for those who are eager to get started?

McCann: I completely agree that more companies know it’s important than the study suggests are taking action. The results provide great insight into how employer strategies are aimed at the employee or talent experience, whether they have an inclusion and diversity lens or not.

I caution companies not to look to others for direction on what they should do but to, instead, provide insights as to the potential levers that come with company customization while being mindful of who the workforce is; who it is expected to be; industry, competitive, and cost pressures; and other characteristics that make companies unique. An understanding of that uniqueness, along with the programs offered today, related cost, utilization, and benchmarking on value and comparison to an inclusion and diversity lens, is a great start. Employee insights are also critical for developing a focused, multiyear strategy, in addition to the involvement and buy-in of leadership.

HR Daily Advisor: What are the most popular methods for promoting diversity and inclusion, and how effective do you think they are?

McCann: Modern-day technology allows for the immediate release of messages, with approaches that have something for everyone. For those who appreciate in-depth pieces, employers have taken advantage of news and reporting outlets, with some even creating and sending out an annual diversity and inclusion report regarding their efforts. There is also the use of bite-size communications via blogs, videos, and messages to share highlights of a pending event (via Twitter, Facebook, Instagram, etc.). This is evident from an external perspective, and in addition to these tactics, popular methods internally generally fall in line with where a company is in its inclusion and diversity journey.

Those who are just getting started might begin with annual enrollment materials and periodic messages or use of the intranet site, but those further in their journey likely leverage their employee or business resources to reinforce messages. Those who have progressed the most have probably embedded inclusion and diversity in everything they do, as well as in their TVP, and it’s evident in their day-to-day culture, policies, benefits, performance management strategy, leadership messages, and behaviors and actions.

HR Daily Advisor: What is the future of diversity and inclusion in the workplace?

McCann: The workplace is already changing—and we are starting to see glimpses of what the future holds. We see in many industries with open-office layouts a focus on collaboration, technology-enabled remote working, an acknowledgment that men and women become parents and should be able to take leave to bond, nonbinary bathrooms, benefit elections, a commitment to pay equity, and unconscious bias training, just as a few examples.

I expect that several years from now, there will be a diversity and inclusion lens on all things talent or human capital but with metrics to support progress and drive strategic decisions in alignment with business strategy. This will require a cultural shift that includes both top-down and bottom-up efforts, part of which includes formalized diversity and inclusion leaders who are not viewed as “benefits or HR” personnel—a business imperative when reporting to the C-suite.