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Corporate initiatives to foster an inclusive workplace — or what has come to be known as diversity, equity and inclusion (DE&I) — have been steadily growing in recent years. Earlier, DE&I was considered only government compliance or just a “program” to be run by companies. But organizations are now faced with an overwhelming degree of disruption since the Covid-19 pandemic broke out. While some have faced huge revenue losses, operation and supply chain dislocations, and liquidity and solvency challenges, others are trying to cope with unforeseen demand spikes.
The lessons already learned from the pandemic tell us that DE&I may now recede as a strategic priority in most organizations. And one can’t blame a company’s leaders for that. It may be largely unintentional. Most companies will have to focus on more pertinent needs like adapting to new ways of working, consolidating the workforce capacity and maintaining productivity.
However, companies relegating DE&I to the back burner may be at risk of placing themselves at a disadvantage. They risk facing a backlash from customers and talent not only now, but also in the future once the worst is over. Resilience and innovation, two key qualities that characterize a diverse and inclusive organization, will be much sought after as companies try to emerge out of the present crisis.
Key To Recovery
A 2018 McKinsey report exhaustively demonstrates how decisive diversity and inclusion practices are to organizational success. The January 2018 issue of the Deloitte Review has revealed that companies that follow an inclusive culture are twice more likely to meet or exceed financial targets and six times more likely to be agile and innovative. These companies, the report claims, are eight times more likely to achieve a better business outcome.
Since a diverse, equitable and inclusive workplace fosters more innovative and creative teams, a company embracing DE&I would be more resilient to a crisis than a homogenous one. Such workplaces make less biased decisions and produce better ideas for solving problems. Research has revealed that organizations that follow their diversity and inclusion policies even during a crisis are in a much better position to bounce back than their rivals that don’t. Analysis of the 2019 Great Place to Work data on publicly listed entities found that companies that maintained a diverse and inclusive environment managed to thrive, while those that didn’t faced a sharp fall. S&P 500 companies, overall, witnessed a 35.5% decline in their stock performance. On the other hand, companies that remained highly inclusive saw a 14.4% gain and outperformed their rigid competitors by four times. These numbers prove that putting diversity and inclusion on the back burner is bad judgment for post-pandemic recovery.
It’s A Watertight Case
The case for DE&I is watertight. A diverse and inclusive workforce is associated with better individual performance since employees feel motivated and engaged. It also leads to a higher collective performance since there’s diversity of thought across the organization, leading to successful decision-making.
Despite the Covid-19 pandemic and the resultant economic slowdown, diversity and inclusion have remained high on the agenda for most leading companies globally. Research by the Confederation of British Industry (CBI) reveals that two-thirds of companies have taken up plans to increase their diversity and inclusion activities in the immediate future beyond 2021. They believe diverse talent will help companies emerge out of the crisis quicker. Most organizations, in the coming months, will seek enhanced problem-solving capabilities and vision to adapt to the brisk changes across all verticals and regulatory environments.
That said, strategic agility, i.e., spotting and seizing game-changers, will be mission-critical for organizations to challenge the economic slowdown and grow. This is exactly the competitive advantage that diverse teams in an inclusive workplace offer.
Employee Well-Being
The Covid-19 pandemic and the resultant crisis have also brought to the fore the need to implement flexible working hours and look after employee well-being. The 2020 CBI/Pertemps Employment Trends Survey results reveal that more than eight in 10 firms (82%) have already increased communication with their employees, while six in 10 respondents (64%) have enhanced flexible work arrangements to ensure a better work-life balance for employees.
The way we work and live has changed. This requires an organization to adapt by engaging its staff in discussion on how the change can be successfully incorporated as a hybrid work model starts getting more traction.
The pandemic has presented a rather unique opportunity for companies to boost DE&I and sustain an environment that can adapt to more flexible and more innovative work arrangements for the future.
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