The upheaval of 2020 has been defined in part by highly visible social movements. Employees, consumers, and even governments are looking to companies to play a significant role in pushing new social justice causes. This call to action goes far beyond simple tweaks to a company’s mission statement. In 2022, companies must attack their Diversity and Inclusion efforts with intentionality. In other words, you need to not only say what you are going to do for DEI but give a comprehensive and public roadmap for how you intend to achieve your goals.
This rising prominence of DEI in corporate circles is happening in conjunction with a larger trend. Professionals and investors are prioritizing the Environmental, Social, and Governance (ESG) impact of corporate missions, culture, and larger work. Over the years, ESG has evolved into a required reporting system for many companies to their investors. While ESG is not yet formal law for companies, the emphasis that investors place on it in 2022, virtually makes it a must-have. According to Workiva, over half of adults want to know a company aligns with their social values before investing. Additionally, 68% want better data and reporting.
The pursuit of diversity isn’t just about doing the right thing. A diverse workforce can drive better outcomes that can enhance business growth and brand reputation. It is estimated that companies with a highly engaged workforce make upwards of 147% more earnings per share than unengaged workforces. Happy teams are also objectively healthier. According to WebMD, upwards of 90% of doctors’ visits can be attributed to some form of negative stress in a patient’s life. It is also estimated that upwards of $576B are lost every year by US employers to workforce illness.
Where DEI Efforts Are Falling Short
The rise of DEI gives hope as more professionals and investors pressure our companies to prioritize it. However, as companies transition from their old way of doing things, there are going to be growing pains. DEI strategies aren’t perfect there are several areas that the DEI field will need to address over time.
DEI is not present in the sectors that need it most
According to a report from the United Nations, women suffered much more from the economic consequences of the COVID-19 pandemic. Higher representation in sectors like food service and retail has pushed 47 million women and girls into poverty because of job and income losses.
While ‘higher end’ corporate sectors have adapted and recovered from the worst of the pandemic’s disruptions, others have not. Our inability to empower professionals in all sectors does a disservice to them and our collective society. Our inability to re-engage many workers within these sectors speaks to our failures in promoting DEI in these sectors. DEI must become a common practice in daily life. It cannot be reserved for the few lucky enough to work in a corporate setting.
DEI remains difficult to track and monitor
Knowing the undeniable business benefits of DEI, investors demand transparency of how companies are addressing DEI in their ESG considerations. From what we have seen, investors, business partners, and consumers are paying more attention and demanding transparency into organizations’ diversity programs, metrics, and key performance indicators.
While there is emerging thought leadership on how to promote an inclusive workplace, we lag in our ability to properly track it. Our ability to better quantify our DEI would do the following:
- It helps companies satisfy their ESG requirements.
- It helps DEI departments track and adapt their strategies more efficiently
- It creates more buy-in from both internal stakeholders as well as potential DEI detractors in the outside world.
DEI is difficult to track because it comes down to abstract dynamics. It’s hard to quantify culture, social interactions, or human behavior. As you can imagine, this is trickier to track than carbon emission rates (as an example from the ‘E’ portion of ESG). DEI is inherently less tangible and more nuanced. Defining success in these areas is also inherently more subjective. Our definition of success can change or even be debated among professionals with the same goals.
Constructing Your DEI Strategy Tracked with ESG Reporting
Before executing specific DEI tactics, companies would be smart to start broad. At the very top, companies should focus on an inspiring vision of what a more inclusive version of their workplace should look like. After a broad vision has been established, it should be defined with concrete goals. This combination of vision and goals provides a launch pad for your strategy.
Once you have defined the ‘what’ we must plan out the ‘who’ and the ‘how’. The means by which we set out to achieve our vision for DEI, and the people we hope to leverage to bring that to reality. When all this groundwork has been laid, reporting infrastructure is vital and the last non-negotiable ingredient.
So what are some tactics companies can employ?
Inclusive career and succession planning
Access to skilling opportunities drives income. Motivated professionals are changing their approach to their careers. An inclusive ecosystem has a culture and training that fosters mentorship and leadership development. As more professionals grow and climb the ladder they are equipped to pass on greater career advancement to others. Inclusion is vital to building more adaptable professionals. A recent survey shows more organizations are focusing on multi-skilling to enable employees to complete tasks from different jobs and drive change in their organizations. Building a successful ecosystem of mentorship, career advancement, and growth is no small task. It requires rethinking how we recruit, who we recruit, and what traits we recruit. It also means we must ensure our culture and processes matches this talent to the ecosystem we hope to cultivate.
Invest Heavily in Aligning Leaders with DEI Efforts
Like other ESG reporting and strategies, DEI is not a simple add-on to larger company goals. To ensure DEI takes center stage, companies need true commitment from their leaders.
Most companies have a sustainability group or an individual sustainability officer who issues an annual corporate responsibility report. But as of now, these departments and strategies are not heavily integrated with DEI. DEI decision-makers need to be included in more areas of company operations and decision-making. Inclusion must become a focus in all company strategy development, asset allocation, risk assessment, financial reporting, and investor relations. The presence of DEI perspective in both decision-making and reporting can carry positive impacts that carry over into better performance within these other departments/focuses as well!
Leadership buy-in is crucial when trying to include a DEI perspective into company strategy and reporting. This buy-in also carries weight with the rest of the workplace which in turn is vital to scale and sustainable DEI efforts over time.
DEI in ESG Reporting
Including DEI principles and voices in every facet of company operations also helps ensure said efforts can be effectively tracked and reported in ESG reporting. Having DEI as a core goal and component of operations also helps all stakeholders better interact with company DEI efforts both good and bad. Technology, AI, and nudge messaging are vital new tools to help companies overcome the challenges of monitoring and reporting on abstract DEI metrics like behavior change, culture, and more.
Meet RevWork’s learning retention platform and app
RevWork’s next-generation learning reinforcement platform taps into the science of habit formation to deliver enterprise learning content that creates lasting results. Get a demo today.
