4 Ways Inclusive Companies Boost their Business

Diversity, equity and inclusion (DE&I) are high up on the to-do list for learning and development professionals according to a LinkedIn survey with 45% making it a focus in 2022 – up from 36% the previous year.

But while 69% of organisations were talking the talk and committed to diverse hiring, only 47% were walking the walk by holding their hiring managers to account.

Our talent pools are wonderfully diverse, but most workplaces still have some distance to go before everyone can hit their potential regardless of their race, faith, sexual orientation, gender identity, neurodiversity or physical abilities. Businesses can't afford to have a 20th century hiring mindset or a culture that fails to seek out bias and uproot it. Jeramy Kaiman, Head of LHH Knightsbridge explains that “people are afraid to speak on a DE&I topic because they’re afraid it’s too sensitive, but you just need to speak from authenticity, be transparent and kind." It’s well worth the effort.

Here are 4 areas where a laser focus on inclusion can make an impact:

1. Talent pipelines

We all have levels of unconscious bias. Sadly, this bias is now percolating into the technological tools we count on to speed things up for us. We need strategies to counteract these biases – training to affect mindset, and quotas and targets to ensure plenty of underrepresented candidates get seen. After all, in a market with scarce talent, nobody can afford to turn talent away based on arbitrary bias.

Efforts to support the LGBTQ+ community are working, with 79% of employers taking action to ensure inclusivity for all genders and sexual identities. This pays off to the tune of a 10% rise in stock return according to research published in 2021. 

Quotas for neurodiverse talent are also growing. Around 15-20% of us are estimated to be neurodiverse – managing Autism, ADHD, OCD or dyslexia. Yet the unemployment rate among this group is thought to be 30-40%.

Curiously, the ability of neurodivergent people to hyperfocus on their strength areas is getting recognized as a benefit – with research from Deloitte suggesting teams that include neurodivergent workers can be 30% more productive. Microsoft, Hewlett Packard, Dell, Deloitte and IBM are among many world class firms now seeking out this talent.

And that is just one example of an underrepresented and overlooked group holding great promise, if only given a chance.

2. Company culture

LHH’s Global Workforce of the Future report shows a culture of belonging can be just as important in talent retention and productivity as salary and flexibility. Currently only 61% of workers report satisfaction with their company culture. Our own research found that a third of white-collar workers want to leave their job in the next 12 months – another 24% are looking at doing it in a longer time frame. Of these workers, 22% cited company culture as their main reason for wanting to leave.

So, how do employers keep these people? What do they want? Flexibility, open-mindedness and room for innovation, according to our research – all the key characteristics of a diverse workforce identified by a Harvard Business Review study.

And let’s be clear – a conducive company culture does more than just create a pleasant environment that people want to work in. It has a direct impact on revenue and performance, too. McKinsey found that more diverse companies are more likely to financially outperform their peers and that the penalty for lagging on diversity is growing by the year.

3. Internal mobility

Fewer women and minorities at the top will mean less diversity, less representation and far fewer leader development opportunities.

Which will suit a self-destructive business just fine – especially upon learning from McKinsey that companies with more than 30% women executives routinely outperform those with less than 30% women executives – with the least gender diverse companies lagging on performance by as much as 48%.

After an almost 60% increase in the number of board seats occupied by women between 2016 to 2021, gender diversity momentum continues within ASX300 brands, but the same cannot be said when it comes to cultural diversity. Despite the proven benefits of cultural diversity at board level, including more accurate reflection of stakeholder interests, greater opportunity to anticipate the changing needs of customers, employees and investors, and the positive correlation between diverse boards and the ability to solve difficult problems.

In 2021, 7% of directors on ASX300 companies were identified as having a non-Anglo Celtic or non-European ancestry compared to 25.4% of the population as a whole. It is predicted to take 18 years for the proportion of ASX300 directors with non-Anglo non-European backgrounds to increase to 20%, which would more closely reflect and align with the general Australian population.

4. Talent retention

If it’s hard to get good people, it’s just as hard to keep them. The talent retention challenge has exposed fault lines in almost all companies – a lack of inclusion is most certainly one of them. Our research found 25% of workers were looking to change jobs because of dissatisfaction in this area.

Gen Z, especially, will quit for their principles. LinkedIn research tells us 87% would be prepared to defect to an employer that better aligns with their DE&I values. And as Gen Z will make up 27% of the workforce in OECD countries by 2025, alienating them will undoubtedly scupper your firm’s future.

An inclusive workplace will generate more diverse ideas, boost innovation, improve performance and, ultimately, greater financial returns.

So, how far is your organisation from fulfilling the potential of inclusivity?

Find out more about how to foster an inclusive and diverse workplace that attracts and engages talent, get in touch with an LHH expert today.