The cost of neglecting diversity and inclusion initiatives can mean losing star performers
A CEO in a large organisation told me about a high potential talent he employed years ago - she was a star performer, one of the best workers he had seen throughout his career - but she ended up leaving his organisation for a similar role at a competitor firm. In her exit interview, she didn’t disclose why she was moving on.
Six months later, they met for coffee so he could try to gauge what could have been done to keep her around, she told him that she didn’t think there were any opportunities for women to progress within the company because they didn’t employ any top female executives.
When a workplace lacks diverse representation, it creates a homogenised pool of workers where only those that are alike feel included. This limits diverse, high potential talent from staying with an organisation where they feel on the outskirts of opportunity, and decentivises diverse prospects from applying in the first place.
For the CEO, the cost of neglecting diversity and inclusion initiatives meant losing his star performer, yet the broader impact is far reaching.
Here are three reasons why diversity and inclusion needs to be a priority for organisations:
Employer branding
A company brand determines how your potential investors, clients and customers perceive your business as an identity. An employer brand is similar but instead, it focuses on how employees - past, current and potential - see you as an employer. A business with a great employer brand is considered a fantastic place to work; existing employees naturally become brand ambassadors simply by sharing their workplace experiences.
Increasingly, the spotlight on employer branding is being directed towards culture and social impact - meaning, workplace wellbeing is progressing beyond superficial HR perks to tangible lifestyle changes like flex-work.
Diversity and inclusion initiatives inform employer branding by catering to the varied needs and preferences of workers - such as location, family or health - in turn, fostering inclusion. If an organisation is lacking diversity and inclusion initiatives, not only will it be harder for them to establish a strong employer brand - but they will struggle to attract and retain their best talent.
What you can do:
Start by speaking to your people as a way to gauge the strength of your employer brand. Create spaces for honest feedback - ask them what they like about working for your organisation, and what can be improved - then strive to implement changes. Even if not every employee’s unique needs can be met - discuss compromises to let your workers know that they’re heard.
Consider how your website or digital presence conveys your workplace to the world - is diversity represented through images and language? If prospects can’t see themselves represented, they’re less likely to apply. The same mindset can be applied to job ads - factors such as gender neutral and inclusive language, requisite education and travel requirements can broaden or limit your talent pool.
Company culture
The goal of every organisation is to have a unique company culture that authentically represents what they stand for. To achieve this, you need to truly understand not only the business, but the people and team fuelling it. Without diversity and inclusion, ‘company culture’ becomes stagnant, disingenuous and disconnected from the needs of its team by only serving and acknowledging a dominant group.
When diverse thought is underrepresented, we aren’t challenging one another to think differently, with empathy or disruption falling to the wayside - this reflects in business performance as we are less likely to foresee changes in the market, and react efficiently.
To shift a company’s culture, an organisation can reflect on its core values - the ‘why’ behind what they do. This should inform a set of principles and motivations as the grounding forces that drive your team. An authentic ‘company culture’ is relevant to a business’ mission, but holistic enough to unite teams in a shared vision.
What you can do:
A way to reinforce company culture is by considering your employee value proposition, or EVP. This is the balance of rewards and benefits that a company can offer its employees in return for their hard work.
EVP can be as simple as publicly recognising an employee for their outstanding performance, or organising a fun team-building experience to commend a group on achieving their OKRs. It’s a focus on internal offerings that align with your company culture, shifting the focus away from monetary compensation to employee development; internal reward and recognition; and community initiatives.
Attracting and retaining talent
If individuals do not feel genuinely included in the workplace, an employer won’t get the best out of them from a professional or personal level. This will inevitably result in poor retention rates, or employee absenteeism, both of which are highly damaging to an organisation’s bottom line.
The cost of deprioritising diversity and inclusion is two fold, yet mutually dependent - there’s the qualitative cost, and the quantitative. The qualitative impacts behaviour and relationships, which could present in a high turnover of staff affecting company culture or reduced employee engagement.
Quantitative change is the tangible impact - the real cost associated with losing top talent in terms of recruitment, time spent filling a role, compromised output - not to mention the six to eight months it takes to get a new recruit performing at their predecessors level. Lost productivity, time and information heavily impacts a business’ bottom line with an estimated cost of two to three times the outgoing employee’s annual salary, depending on their seniority level.
Change in diversity and inclusion comes back to speaking to your people. If the CEO had engaged in an honest conversation with his star performer when she first came onboard, he might have assured her that she had every opportunity to become a senior executive, and she might have stayed.
The problem for many organisations’ is that their blindspots are being called out when it’s too late, if at all. Businesses need to create a culture of honesty and trust, where diversity and inclusion are not siloed discussions. Anyone should feel as though they can respectfully challenge, or question the status quo within their workplace to reflect contemporary standards.
Building out internal structures like EVP correlates with employer branding to attract the best talent, while authentically allowing organisations to develop goals that align with its values. In order to retain talent, consider what various people need from their working environment to feel secure and welcome by creating space for honest, regular feedback.
Diversity and inclusion needs to be treated as the strategic objective that it is by bringing a commercial mindset and focus on ROI to a historically peripheral and diluted area. Organisations must prioritise diversity and inclusion as a necessity, to survive and thrive in an increasingly globalised economy - the cost of doing so is monumental.
Sarah Liu is the founder and director of The Dream Collective