5 Strategies to Infuse D&I into Your Organization

There is broad agreement that diverse and inclusive workplaces are a good thing. These environments value all employees’ contributions and reflect the demographic characteristics of the available labor force.

Put most simply, it’s the right thing to do. Additionally, diverse and inclusive companies find and nurture the best talent, increase employee engagement, and improve customer willingness to buy.

But there is a long way to go. The killing of George Floyd in May 2020 was a clarifying catalyst that helped business leaders see the enormous inequities that have always existed. A year later, stakeholders (including current and prospective employees and customers) want to know if companies have lived up to the big promises they made last summer.

Historically, people of color have faced the following vast disparities in the workplace:

Lower-than-expected hiring rates. White job applicants tend to receive more callbacks than equally qualified applicants of other races. Hiring rates (the number of hires as a percentage of the total number of candidates) for Black and Hispanic Americans did not improve between 1990 and 2015.

Lower-than-expected representation in white-collar and leadership jobs. People of color are overrepresented in lower-paying jobs and underrepresented in top leadership roles. Asian Americans and Pacific Islanders (AAPI) are the least likely to be promoted to management and executive levels in Silicon Valley high-tech jobs compared to other groups. A total of 21 Black Americans have held Fortune 500 CEO positions, including the five who currently hold the top spot. Although the number of Hispanic Fortune 500 CEOs is increasing, they still represent less than 4% of those 500 CEO slots. There are no Black chairs, CEOs, or CFOs of companies in the FTSE-100.

Negative day-to-day experiences at work. Employees of color consistently report less-positive experiences at work than their white colleagues. About 31% percent of AAPI employees and 25% of Hispanic and Black employees experience stereotypes and bias at work. Black employees say they’re treated less fairly and get less support to advance. Black female employees feel less valued and less respected than employees of other races and ethnicities.

During 2020 and so far in 2021, many companies, including McDonald’s, Microsoft, Boeing, and Best Buy, made pledges to improve diversity hiring practices and introduce diversity and inclusion (D&I) training. The hiring of D&I professionals in general spiked, too; more than 60 U.S. companies appointed their first-ever chief diversity officer (CDO).

However, much of this work has not yet taken root. In one recent survey, 93% of leaders agreed that the D&I agenda is a top priority, but only 34% believed that it’s a strength in their workplace. In another survey, 80% of HR professionals viewed companies as  “going through the motions.” In other words, they didn’t notice any significant positive impact from the organizations’ actions. Another survey revealed that while 78% of Black professionals believe senior leaders’ D&I efforts are well-intentioned, 40% hear more talk than action and have not noticed material changes to policies or culture. Meanwhile, many CDOs leave their roles because of a lack of strategic, financial, and political support.

It’s time for a new approach

Boards and CEOs are facing more pressure from investors to deliver on their D&I promises. Several asset managers, including New York City Employees’ Retirement System and Black Rock, have asked corporations to release their workforce gender, racial, and ethnic composition data as a way to incentivize change.

One-off D&I “initiatives” do not effectively address these long-standing disparities. Instead, leaders should infuse D&I throughout their organizations. Based on our experience and research, we have developed five strategies that can turn D&I into an improved employee experience and a strategic advantage for the enterprise.

Ensure the CEO positions themselves as the top champion for D&I efforts

The CEO needs to take a public stance, embed D&I in the organization’s purpose, exemplify the culture, and take responsibility for progress toward goals. They need to be out front, even if a CDO is part of the team.

PwC’s U.S. chairman, Tim Ryan, has been an exemplar for at least five years. He co-founded CEO Action for Diversity and Inclusion after police shootings in the summer of 2016 to spur business executives to collective action on D&I. The publication of PwC’s workforce diversity data in 2020 revealed that women and people of color are underrepresented, especially at senior levels, showing that even the most dedicated companies still have a lot of D&I work to do.

Nielsen’s CEO, David Kenny, added the CDO title to his leadership portfolio in 2018 so he could “set hard targets for ourselves and make those transparent to our board and measure them like we measure other outcomes like financial results.” He relinquished that title to a new CDO in March 2020, noting the D&I progress his team had already made.

If you’re a board member, you have an essential role to play in D&I governance. You should make sure there is action and change that employees can see and feel. You should be asking your CEO questions about:

• The current experience and representation of non-white groups.
• Their leadership on the D&I strategy and goals.
• Their visibility to employees and the community regarding these matters.
• The progress the company is making on D&I goals.

You should also evaluate the impact, stance, and activities of new CEO candidates in their previous roles and their D&I ambitions and plans should they be appointed.

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