This week we launch a year-long study of diversity, equity, and inclusion (DEI) programs in business and the results are disappointing. After billions of dollars invested in DEI training, tools, tech, and HR strategies, we haven’t moved the needle very far. In some respects we’ve come a long way, but as our research discovered, only one company in five holds itself accountable for DEI in its business practices and 40% see diversity as primarily an issue of compliance.
The business case for diversity is proven . Every study of employee engagement last year found that “belonging” was the #1 driver of employee satisfaction (Qualtrics, Glint). Studies from McKinsey, Deloitte, and Catalyst show that diverse boards outperform, diverse teams outperform, and companies with strong DEI brands are more profitable and market leaders.
And today, as society focuses on income inequality and racial justice, equity is being legislated. Laws in California, Europe, and the US mandate women on boards, gender pay equity, and ever-more diligence in EEOC compliance. It’s illegal to ask for salary history in many states. And the Biden Administration is using equity as a lens across every investment in the Federal government.
We, as business leaders, have to step up.
I just finished reading Isabel Wilkerson’s book Caste, which describes the terrible roots of racial bias in the United States. She argues compellingly that societies always need to “put some group down” in order to feel complete. Well, we cannot tolerate this in business and I think our research can really help.
Let me cite the highlights.
First, as you’ll read in the report (you can download it here), highly diverse and inclusive companies do not think about DEI as a “hiring problem” or “HR strategy.” They view this as a business strategy.
Target, for example, considers DEI a “business function,” one which permeates every decision the company makes. Target, which has a mission of “to help all families discover the joy of everyday life,” thinks about inclusion in their store locations, product offerings, pricing, as well as hiring, pay, promotion, and internal behavior. Inclusion is part of its business strategy, not an “HR initiative.”
Every company should operate this way. Chevron invests in diversity because the company does business in so many different countries and cultures. Unilever focuses on inclusion because the companies products serve diverse communities and demographics around the world. Microsoft leads in diversity because they want to bring technology to people with disabilities and all levels of education. Sutter Health focuses on equity and inclusion in patient care. These companies define their business in an inclusive way – their people and HR practices are diverse as a result.
Consider how the Biden Administration has placed equity at the center of every Federal program. I was struck, for example, how Pete Buttigieg (Dept. of Transportation) describes that Equity is not just about diversity in contracting, it’s about not putting freeway off-ramps in low-income neighborhoods and fixing poor transportation systems in low-income areas. Read more here.
Second, we found that highly inclusive companies are really good listeners. It may sound simple, but the most complex issues in DEI (what to do about Black Lives Matter, or a harassment claim, or other complex social issues) are all being discussed by employees. Of the 80+ practices we analyzed, the most important of all was to “listen, hear, and act” on what employees want to talk about. The challenge is then taking this input and “acting on it.”
Goldman Sachs, for example, listened to employees describe their DEI challenges and found that managers wanted to learn about allyship. The company developed an Active Ally Action Plan with a printable list of actionable steps. (A coach listens to you; a mentor advises you; an ally advocates for you.)
Third, we found that HR professionals, who are often given responsibility for this topic, do not feel fully ready. As I wrote in Chief Diversity Officer May Be The Toughest Job in Business, companies are hiring heads of DEI at a record rate. There are more than 30,000 such senior positions open today. But most HR professionals tell us they need more education. The DEI job is complex, nuanced, and difficult. Our research found that only 4% of HR professionals feel fully proficient to lead corporate DEI programs. (Our new JBA program Elevating Equity is designed to help with this.)
Finally, as our interviews and research discovered, companies have to hold leaders and the organization accountable. In other words, pushing to “hire more women” or “promote more black professionals” are important but without an accountable culture of inclusion, these strategies often fail. A recent WSJ story of Coca-Cola pointed this out: as the company pushed to reverse its massive discrimination lawsuit, the culture “slipped back” and decades later the company had many of the same problems.
It’s not enough to publish your diversity metrics: you have to make equity goals as important as your financial, legal, and other business outcomes. Salesforce famously closed its Gender Pay Gap as soon as it was discovered. Companies should think about this as a “compliance” issue that simply cannot be tolerated.
Diversity and inclusion is not a simple topic. It covers everything from microaggression to pay equity to intersectionality. But as our research shows, if you move beyond training and think about equity as a systemic part of your company, you can build an organization that lasts and have a positive impact on society as a result.
PS. In addition to this research report, we are also launching the Josh Bersin Academy program Elevating Equity, a 5-hour collaborative learning program to help HR leaders and managers learn more. In that program you will hear from some of the most successful professionals in the field – so please join us .
If you are a DEI leader and want to join our Big Reset Group, please send us a message – we are running a series of Sprints on this topic and you can learn from hundreds of your peers.
Elevating Equity is a mission for us all. Please give us your thoughts on this research and we look forward to helping you address one of the most important issues of the decade.
This content was originally published here.