Long reads

We need to talk about diversity and inclusion

16 Jul 2020 By Jo Faragher

Black Lives Matter protests have added urgency to concerns over ongoing inequality at work. But how can HR best step up its game?

Perhaps it was the ha’pennies that did it. In 1981, the Toxteth area of Liverpool was one of many parts of the country engulfed by violent and angry clashes between the black community, the police and, in some cases, far-right groups. And the world of work was not immune. In one notorious example of direct action, when a black teenager was wrongly accused of stealing a coat from a Liverpool department store, local groups coordinated to purchase items from the store using small change, including half-pennies, grinding it to a halt on a busy shopping day until the manager agreed to apologise and treat black staff and customers fairly.

Such stories are one reason some campaigners are less than confident the Black Lives Matter (BLM) protests of 2020, sparked by the killing in Minneapolis of George Floyd, will lead to lasting change. In the wake of riots in Toxteth, Brixton and elsewhere 39 years ago (not to mention the subsequent, seismic Los Angeles riots of 1992), official bodies were required to draw up diversity and inclusion policies. Major corporations began to employ D&I experts and, over time, quotas and reporting mechanisms were introduced alongside, in the UK, the bringing together of various acts into the Equality Act 2010.

Still, the BLM movement has led to an outpouring of criticism of workplace practice and the woeful under-representation of black and minority ethnic employees in most sectors. And to a sense the HR function and the D&I movement has, despite its good intentions and many local success stories, been unable to initiate lasting workplace equality. Quite simply, when the protesters pack away, the world returns to business as usual.

Though race is at the forefront of current discourse, and is the area where the effects of inequality are arguably most toxic and profound, almost no protected characteristic can be said to be properly represented in the workplace. The same organisations that have loudly voiced their support for BLM would for the most part be exposed by mandatory ethnicity pay reporting. And the danger is that in the wake of coronavirus, with D&I budgets stretched and HR teams fatigued by urgent restructurings, momentum will quickly dissipate, across race and other vital areas of diversity practice.

Indeed a recent CIPD survey found that before the Covid-19 outbreak, 14 per cent of employers put D&I in their top three HR priorities, but this fell to just 5 per cent one month into lockdown. This was despite around two-fifths saying they thought their prior D&I investment would help them respond effectively to employee (43 per cent) and customer (41 per cent) needs.

In part, counteracting this is about how HR professionals, and others with an interest in improving equality inside organisations, make leaders aware of what needs to be done and why. Historically, says Rob Briner, professor of organisational psychology at Queen Mary University of London and scientific director of the Center for Evidence-Based Management, there has been a tendency for businesses to “feel they ought to be doing something” and invest money and resources when they haven’t really worked out what the problem is. “There’s an assumption that you can ‘fix’ something just by ‘doing’ diversity. But you need to get specific,” he says. 

Dawn Moore, group people director of construction company J Murphy & Sons, agrees a lot of activity has typically focused on target setting without rigorous interrogation of why these targets exist and how they might be achieved. “Many companies will set targets such as doubling the number of women, but they’re not looking at the reasons women aren’t applying, or why they’re leaving,” she says. “They don’t tackle the underlying issues.” 

It is better, of course, to start at the beginning and ask those involved what they’d like to see and what obstacles they encounter. With ethnicity, many businesses have relied on a network to filter the experiences of black employees and package them for executive consumption. But almost none have actively encouraged leaders to socialise and form lasting working relationships with those with a different ethnic background. “A list of good practices is helpful, it can give you ideas, but the best people to ask are your own people – particularly those from under-represented groups,” says Moore.

One of the factors making this conversation far from straightforward is organisational bureaucracy and sheer inertia. The moral case for initiating racial equality is as clear and unassailable as the notion of ‘caring for your people’, but justifying the sort of longer-term activity typically funnelled through HR departments means constructing a case, defining returns and measuring outcomes. Even if the best way to articulate your case is that the risk of failing to act is so severe, businesses are simply not set up to handle such logic. 

And in any case, what does a business case for inclusion even look like? “There is some reliable evidence that [D&I] can produce business benefits such as better retention, employee satisfaction and wider market share – all of these are measurable outcomes,” says Dr Anna Paolillo, management lecturer at Kingston Business School. “But at the same time, other evidence shows that some initiatives can lead to negative outcomes such as exclusion or turnover. Organisations have to take all elements into consideration to see why some strategies might not work so well.” 

Briner agrees that the complexity of proving and ensuring the success of D&I activity often stems from the fact that initiatives can easily have unintended side effects, which must be taken into account. “One of the claims we see a lot is that team diversity improves performance and creativity. But the evidence shows that while some performance improves, sometimes conflict increases too,” he says. Which is not to say people professionals should conclude D&I can never be quantified. As a long-time proponent of evidence-based HR, Briner would be the first to urge a similarly robust approach to D&I – just with a healthy awareness of the complexities involved, and scepticism regarding whether the impact of D&I efforts can ever be tracked directly to a company’s bottom line.

Part of the challenge is that the success of D&I can be measured in many ways, says Mel Green, research adviser at the CIPD and co-author of its research on the business case for diversity in 2018. Many make the mistake of measuring only the diversity side of things – in many cases because it’s relatively easy to quantify – and neglecting inclusion. “Diversity and representation are important, but organisations also need to think about inclusion. If the organisation is male dominated and hires a senior female, they alone can’t change the culture,” says Green.

Moore agrees too many organisations use the words ‘diversity’ and ‘inclusion’ interchangeably, focusing on ‘fixing’ the former and wondering why the latter hasn’t improved. “Managing diversity only focuses on organisational demography – promotion procedures, policies, even affirmative action programmes,” she says. “Inclusion is a much broader construct and requires a change in the way people interact and the removal of obstacles.” 

If diversity is a numbers game, inclusion reflects experiences of and feelings about being at work, says Cecilia Weckstrom, senior global director at Lego. Weckstrom has used engagement data to draw a link between feelings of inclusion and staff motivation. “Data analysis of engagement surveys and our inclusion index questions revealed that inclusion was the fourth biggest driver of motivation, so this ultimately has a benefit for the bottom line. So if you want to improve motivation, it’s a major lever,” she says. 

Weckstrom’s background is in product innovation, so she is used to poring over consumer data to understand exactly what people want. Why not, she asks, apply this to employee data? “It’s so odd that we haven’t drawn the same conclusions in our companies,” she says. “The business case for diversity is a network of relationships and we need to understand it on a forensic level. Who is best placed to understand this group or that group? Who’s missing from the table? It’s about co-creation.” 

How you use data is important, as this can drill down into the real issues, says Green: “You need to get more granular, as this will highlight where the issues are. So when collating gender pay gap data, look at intersectional issues such as race, or why and when women are leaving, for example.” 

Finding the right insight from your own data can be an imperfect science, however, warns Raafi-Karim Alidina, co-author of Building an Inclusive Organisation and consultant at Frost Included. Not every employee chooses to disclose their ethnic background or sexual orientation, for example, so measuring the impact of programmes on those groups can be difficult. “There are some aspects of diversity that are harder to count up, such as socioeconomic background, introversion versus extroversion – but they still matter in terms of how people do their work or their approach to problems,” he adds. 

In many cases, organisations have all the data they need but don’t interrogate it in the right way. For example, the numbers may suggest a particular group is not being promoted despite being rated as highly as others on average in performance management terms. Rather than accept this as an anomaly, smart HR professionals correlate this data – is the group in question less likely to undertake organisational learning, for example, or more likely to be in a part of the business that has historically not offered a path to the C-suite? Organisational context can be everything, and is why the temptation to cut and paste initiatives from other businesses can be so counter-productive.

It is context that will ultimately win over those most important to persuade when it comes to maintaining D&I momentum (and investment), says Lily Zheng, an organisational consultant and author. Achieving buy-in from senior leaders shouldn’t be a case of assuming they’ll want only cold, hard commercial metrics, she adds – most will be perhaps surprisingly open to a nuanced explanation. “People who are trying to push D&I realise that leadership buy-in is important. It’s critical to make it work but they don’t know how to secure it without ‘selling’ it or ‘making the case’,” she says. “There’s a perception that leaders are recalcitrant, that they need to be hoodwinked. It’s an adversarial approach when it should be collaborative.

“We can often make a better case to leaders if we break it down – it’s not just about a zinger that makes them feel bad about themselves. When you’re trying to create a different culture, you can look at metrics such as engagement or trust, or who’s looking for a new job. If you’re a data-driven company, find a data-driven approach. If you’re a mission-driven company, you might benefit from making a moral case.”

Black Lives Matter has shown that powerful ideas about equality do not need to be seen in the context of individual identity – they increasingly resonate with society at large. Keeping the focus strongly on ensuring all individuals genuinely have the opportunity to participate and thrive at an organisation will deliver on both employers’ moral and commercial obligations. “There is commercial value in the moral case. If something helps people to thrive because everyone can contribute, there are longer-term benefits such as retention,” Green adds.

But organisations must approach this with care – as evidenced by recent scrutiny of businesses coming out in support of BLM, and in particular whether statements around their internal efforts are backed by meaningful, ongoing activity on the ground. In their book, Alidina and Stephen Frost, CEO of Frost Included, describe organisations as typically being at one of three stages in the D&I journey. The first they describe as Diversity 101, or “let’s just try not to get sued”. The next – Diversity 2.0 – is where they feel it’s important to reflect their customer base but it’s still very marketing-driven, says Alidina: “It’s ‘we want to be seen as equitable and to show off to people that we’re an inclusive company’.” 

The danger is, “people see it, they join the company, but after a couple of months the smoke and mirrors disappear and they leave”, says Alidina. “There might be a seat at the table but they don’t actually have a voice.” The next step is towards what Alidina and Frost describe as Inclusion 3.0. “This isn’t a strategy, this is part of your  overall business, the way you do things.” It could mean major changes to policies such as flexible working or how recruitment is debiased, but it’s also about the day-to-day things that build a culture – whether racist comments are called out, who is asked to contribute to meetings, who you invite to speak on panels, whether customer-facing outputs feel diverse and inclusive and so on.

The question is whether the coronavirus crisis will lead to more or fewer companies advancing to such nirvana. Even with the added impetus of the recent BLM protests, there are worries D&I will slip off the agenda and that suitably nuanced business cases for initiatives will fall on deaf ears.

The more hopeful reading is that BLM, allied to the brutal necessities of a coronavirus reset, could force organisations to look with fresh eyes at what actually works. That means asking employees what they would like to see from their organisations, says Paolillo: “For example, flexible work and telework have long been seen as a luxury and not as a need. Now that it has become a necessity for everyone (regardless of their gender or health conditions), policies could be adapted in a way that makes them accessible to everyone, without negative implications or undertones.” We can, in short, design a new way of working that actively promotes inclusion. It is perhaps the biggest task the HR profession has ever faced – but in many ways, it simply no longer has a choice.  

How to take an evidence-based approach to D&I 

In the current climate, HR teams will be under greater pressure than ever to provide evidence that diversity programmes work. Rob Briner, professor of organisational psychology at Queen Mary University of London, argues there is a difference between “always using evidence and adopting an evidence-based approach”. Too often, he says, practitioners use evidence with little attention to its quality and relevance to their firm, or look at limited types of evidence. 

He advocates a four-step approach to weighing up whether a D&I intervention is likely to be meaningful for your organisation: 

Identify the problem or opportunity. What does the scientific literature say about 
the issue you’re looking at? What are the consequences for businesses and how trustworthy is that information? Would proposed solutions work here? 

What do other practitioners say? What is their experience of the causes of this issue and how 
did they apply the solution? 
Again, would it work here?

What do your stakeholders say? (Including employees, employee resource groups, customers, industry bodies.) 
Do they think the issue is important and how do they think it should be addressed?

Look to the data. What do your numbers reveal about D&I trends over time, or the effectiveness of previous initiatives? 
Do they reveal any costs or benefits of future programmes? 

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