* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Businesses must do more to ensure a truly diverse workforce
Elena Espinoza is senior specialist for social issues at the Principles for Responsible Investment, a United Nations-supported international network of investors
“Diversity” has been one of the hot button social topics on the agenda for businesses around the world for a number of years now.
It’s an area where we’ve seen improvements, notably on the issue of gender. A 2020 study from global consultancy McKinsey shows that women make up 21% of C-suite positions in the US in 2020, an increase of 3.7% from 2015.
However, the problem of gender equality in the workplace is far from resolved, and less so when gender intersects with other characteristics (i.e. for the same study, the number of women of colour on boards is only 3%). This stark difference and the one reason for the lack of significant progress could be that, when working on diversity, businesses overlook other concepts such as inclusion and equity.
It’s become increasingly clear that businesses have a key role to play in shifting the needle on all three of these topics in the workplace.
Confusion still exists around these terms – all too often they’re used interchangeably, when in fact the distinctions between them are vital in addressing the underlying causes of these problems.
“Diversity” is identified as the presence of difference within a given context, such as a business. This can mean a difference in identity, such as in gender, race, sexual orientation or gender identity.
“Inclusion” can be described as the actions taken to understand, embrace and leverage the unique strengths and facets of identity for all individuals, so that they feel welcomed, valued and supported. Finally, “equity” means people have fair access, opportunity, resources and power to thrive.
We know that there are objective benefits to businesses who address these issues – first and foremost to the business itself. Improved DEI means greater diversity of thought and reduced groupthink, which in turn can give firms a competitive advantage in a crowded marketplace.
Research also suggests the improved rates of DEI can have a positive impact on companies’ ability to recruit and retain talent, with this factor itself being a key example of how inclusion and equity must go hand-in-hand with diversity to fully unlock these benefits.
Data shows that a more diverse workplace does not necessarily impact on staff retention/recruitment unless the workplace is also inclusive – in other words, a workplace being more diverse does not necessarily guarantee these benefits, unless the experiences of the individuals are positive.
Not only that, but improvements on DEI stand to have a benefit to the wider economy too.
A just, equitable and fair society where everyone can participate and reach their full potential entails improvements in social capital that societies and companies rely on to prosper. For example, systemic barriers to DEI can lead to occupational barriers where individuals within certain demographics are disincentivised from pursuing certain careers, despite clearly having the ability to do so. This in turn can result in a misallocation of talent and can subsequently create inefficiencies in an economy.
By enabling all people to achieve their full economic potential, the overall size and skills of the workforce will grow (a key consideration for many economies currently grappling with significant labour shortages), in turn leading to growth in productivity and associated long-term economic growth.
What’s increasingly clear then is that diversity as an issue cannot be treated in isolation – it must come hand-in-hand with equity and inclusion. And not only that, but businesses have a key role to play in bringing about this change – doing so is not only to their benefit, but also benefits the wider economy and society as a whole.
