Benefits of Diversity Management

It’s clear that diversity management is not just about doing the right thing; it’s about doing good business. By fostering a diverse and inclusive workplace, organizations can unlock innovative ideas, attract and retain top talent, better understand their customers, and ultimately, drive increased profitability. Let’s take a closer look at how diversity management in the workplace benefits both employees and organizations.

For employees

Empowerment and belonging

When individuals feel valued and respected for their unique perspectives and experiences, it fosters a sense of empowerment and belonging that benefits and compensation cannot provide. Being a part of a team where your experiences are celebrated and you feel welcome can lead to increased confidence and motivation to contribute their best work. 

Personal growth and development

Centering diversity management helps expose individuals to a wider range of ideas and perspectives, which can spark personal growth and development. This can take form in both big and small ways, from celebrating Lunar New Year at work or prioritizing International Women’s Day to committing to impactful DEI policies and leveraging local policies such as mental well-being programs. Diversity management in the workplace promoted opportunities for employees to learn about different cultures, experiences, and approaches to work.

Career advancement

Diverse workplaces often have more equitable promotion opportunities based on merit and performance, rather than biases or favoritism. When we welcome diversity into our organizations, particularly among leadership, we open up fairer pathways for career advancement for individuals from all backgrounds. In fact, BCG research found in companies with diverse leadership, employees are 45% more likely to report that they’ve had a pay raise or promotion in the past year. And a Women in the Workplace study by Leanin.org reports women are more likely to be promoted to manager when there are other women in senior positions. These numbers further highlight the importance of representation and diversity management.

For organizations

Talent acquisition and retention

A diverse and inclusive workplace is more attractive to top talent, as individuals from diverse backgrounds are more likely to see themselves represented and have a fulfilling career path. Diverse leadership signals that all employees have the potential for advancement. It can break down barriers and inspire individuals from underrepresented groups to pursue ambitious career goals. This leads to a stronger talent pool and reduced attrition rate.

Enhanced employee engagement and motivation

When employees feel valued and respected regardless of their background, they are more likely to be engaged and motivated in their work. According to McKinsey research, employees are three times more likely to be highly engaged when they work in diverse and inclusive teams. Employee engagement is directly linked to productivity, innovation, and creativity, which in turn drives revenue.

Reduced risk of discrimination and litigation

Creating a diverse and inclusive environment also helps to mitigate the risk of discrimination and legal issues related to bias or unfair treatment. Actively investing in diversity management initiatives will help your organization identify any discriminatory or unequal practices, and reduce the likelihood of future bias within your organization. This leads the way for a more equitable, positive, and productive work environment for everyone.

Diversity Management Challenges and Their Solutions

Diversity management in the workplace is a worthy effort to invest in, but it’s not without its challenges. It’s important for HR leaders to understand the potential risks and roadblocks that may arise when implementing diversity and inclusion management so you can overcome any challenges as they come.

Leadership commitment

Like most major initiatives, leadership buy-in is a must. “All the well intentions or great processes that you may have, if you want to implement it, you’ll always need leadership”, says Sara Fisher, Group Head of People & Culture at MoneySmart. 

But securing leadership buy-in isn’t always that simple. It’s important to know your audience when securing leadership buy-in, and you can do so by appealing to their interests. “It’s not one size fits all. It really depends on how they [leadership] communicate and what’s important to them. But from a practical standpoint, explain to them how an initiative contributes to the company bottom line and especially down to attrition, that resonates with their interests and helps to get their buy-in from there.” Fisher explains. 

Unconscious bias

Unconscious bias can be the enemy of diversity management. As it’s unconscious, many of us are often unaware of the biases we carry. To combat this, it’s important to educate ourselves and our peers and understand our own biases. What stereotypes do you have of people from different groups and how well they may perform on the job? What communication styles do you prefer? Sometimes what we consider to be appropriate or desirable qualities in a candidate may reflect more about our personal preferences than about the skills needed to perform the job.

Implement strategies to safeguard against unfair and biased practices. For example, implementing a panel interview format and ensuring that the committee is diverse, unit affiliation, job classification, length of service, variety of life experiences, etc. to represent different perspectives and to eliminate bias from the selection process can help mitigate bias in your recruitment efforts. 

Resistance to change

Change, even for the better, can be a challenging element to navigate when managing people. When introducing diversity management, employees may feel like they are being forced into something they don’t want to do, managers might feel threatened by changes in their roles or responsibilities as a result of new policies such as hiring quotas, and your organization may even experience resistance from customers who prefer dealing with people who look like them or have shared cultural experiences with them. Dealing with resistance to diversity management will require a tailored approach to each team and customer base, but some key strategies include:

• Develop clear expectations: Establishing clear expectations for performance evaluations and annual reviews as well as setting up processes for handling complaints about unfair treatment based on identity helps ensure fair and equitable treatment for all employees at every level. These policies should be communicated clearly throughout every level of your organization.
• Take a zero-tolerance approach: Putting your money where your mouth is, so to speak, is vital to upholding policies for diversity management in the workplace. Make sure employees know about your anti-discrimination policies as well as what constitutes harassment or discrimination. Develop and communicate clear instructions for how to report unfair practices within your organization to boost accountability and reduce instances of unfair practices.

• Instill accountability: Developing a system of accountability will help ensure that managers and employees are held accountable when they fail to meet diversity management expectations; this includes providing training opportunities to build awareness around bias, and handling situations of discrimination.

Tokenism

A misguided desire for workforce diversity can lead HR leaders down the path of “tokenism,” where hiring and promotions are based primarily on identity rather than merit. This approach undermines the true spirit of diversity management and should be avoided. Some of the key strategies to mitigate tokenism are:

• Focusing on systemic change: reframe goals away from quotas and targets, consider blind hiring practices, and create standardized promotion and development criteria that are consistently applied across the board. Remember, diversity management without equity and an inclusive culture is merely surface-level change

• Invest in education and awareness: unconscious bias training, education around tokenism, and DEI training bring awareness and accountability to the diversity management experience.

• Instill empowerment and accountability: Support the creation of employee resource groups (ERGs) where employees from underrepresented groups can find community, advocate for their needs, and contribute to company-wide DEI initiatives. Actively pair individuals from underrepresented groups with mentors and sponsors in senior leadership positions. And Track and analyze diversity statistics, including leadership demographics, pay equity, and representation across different departments. Hold leaders accountable for creating and maintaining an equitable and inclusive workplace.

Best Practices for Diversity Management

Establish a dedicated team or committee

Diversity management requires intentional action and dedicated programs to achieve true equity. Establishing a dedicated DEI team or committee helps ensure your diversity management goals get the support they need to flourish. Ensure the team itself is diverse in terms of backgrounds, experiences, and perspectives, and select passionate and knowledgeable individuals with a strong commitment to DEI to be involved.

Define clear goals, responsibilities, and accountability measures for the team and equip them with necessary resources, budget, and authority to implement initiatives effectively.

Gather and analyze data

Collect data on employee demographics such as age, gender, race/ethnicity, etc., hiring, promotion rates, compensation, and employee engagement across diverse groups. Ensure this data collection and storage is secure, complying with privacy regulations, and analyze the data by various demographic groups to identify potential disparities requiring attention such as pay parity. 

Data is a powerful tool as it’s not subject to bias, and can provide a clear picture and metric to your diversity management efforts. Regularly share your key findings and data insights with your organization in a clear and actionable format.

Develop clear policies and procedures

Clearly define what constitutes discrimination and harassment, outlining reporting and investigation procedures within your organization. Develop policies ensuring inclusivity and accessibility for individuals with disabilities in communication, physical workspaces, and technology. Establish clear policies promoting equal opportunity in recruitment, hiring, promotions, and career development. When it comes to recruitment practices, focus on the job requirements in your interview and assess experience but also consider transferable skills and demonstrated competencies, such as analytical, organizational, communication, coordination. Prior experience does not necessarily mean effectiveness or success on the job. 

Make these policies clear and known throughout your organization (be sure to add them as a part of your employee handbook.) And lastly, regularly review and update your policies to ensure they remain relevant and effective.