Global leaders now overwhelmingly consider diversity, equity and inclusion (DE&I) a strategic business imperative as employees increasingly place value on equality advances in their work environment.
A new report released by talent solutions and leadership advisory and Heidrick & Struggles found that 93% of leaders around the world now view DE&I as more important than three years ago. The global report, Employees at the Center: What It Takes to Lead on DE&I Now, revealed that 58% of leaders said their companies currently engage in practices – such as clearly defining diversity, equity, and inclusion, and link them to strategy and business outcomes – considered to be ‘leading edge’ three years ago. That’s up from 20% compared to the initial 2019 study.
The nearly 30 percentage point increase suggests a new bar for organisations. Additionally, 52% of executives say their diversity efforts contribute to business success to a large extent, up from 22% three years ago. Leaders rank employees as the top reason for increased DE&I focus.
“These findings should give all of us a moment of pause to reflect on the momentum gained in corporate DE&I efforts,” stated Jonathan McBride, global managing partner of Heidrick’s Diversity, Equity, and Inclusion Practice. “The practices that made a company a leader three years ago, are now considered table stakes. Nearly every executive surveyed acknowledged a rise in importance of DE&I, which underscores the pace of change and highlights the risk of falling behind.”
EMPLOYEES KEY TO DE&I ENGAGEMENT
Around 43% of executives ranked employees as the key reason for increased DE&I focus, placing them as a priority over customers or managing through the Covid-19 pandemic. Additionally, executives believe DE&I initiatives improve business outcomes because they enhance employee engagement, corporate reputation, and business transformation.
The survey indicated that leaders consider engaged employees as more central to their corporate culture than ever, signalling that the enduring war for talent and the pandemic-induced hybrid workplace has prioritised employees’ wishes. Leaders cited employees as the critical connection between DE&I and realised business success. In addition to DE&I efforts as a compelling force for attracting and retaining top talent, employees are also being recognised as an engaged constituency – holding leaders and companies accountable over time. Consequently, more leaders are realising in fresh ways that an inclusive culture is at the heart of a truly productive workforce.
“As workplace dynamics shift reflecting talent wars to a hybrid work environment, getting DE&I right is more important – and more complicated – than ever,” continued McBride. “Across industries and geographies, CEOs are acknowledging that complexity. They’re committing to DE&I because, for employees, it encourages different ways of thinking and promotes career development and, externally, better reflects a company’s customers and constituencies.”
DE&I PRIORITIES
The report identifies four actions best-in-class companies can take to enhance their DE&I efforts. They include:
- Treat DE&I as a Strategic Imperative: When leaders treat DE&I as just as critical to business outcomes as a safety initiative and dedicate resources and planning in the same manner – companies notice real impact to their bottom line. Leading companies indicate they now approach DE&I like any other strategic initiative: with executive leadership, including the board, setting the standard, defining the scope and vision clearly, linking DE&I to business strategy and goals, tracking progress, and aligning processes and operations throughout the organisation.
- Hold Leaders Accountable: Diversity and inclusion progress should be tied to talent goals at all levels, for example, and managers and senior executives must become role models and be held responsible for progress.
- Engage Employees with Intentionality: 40% of organisations cited increased employee engagement because of DE&I initiatives as the leading contribution to business success. To ensure the organisation is held accountable, employees should be at the center of efforts, participating in ongoing conversations about their perceptions on DE&I with company leadership.
- Leverage Board Participation: Where there is an opportunity for boards to show their commitment to DE&I, take advantage of it. The survey uniquely revealed that the most progressive companies are turning to the board and leveraging those leaders to effectively communicate with employees about the organisation’s DE&I efforts.
Click here to download the report.
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