DEI trends that can boost performance in 2022

A diverse workforce that is treated fairly and has equitable opportunities for advancement is a crucial component to organisational success and will remain so in 2022.

Diversity, equity, and inclusion (DEI) in executive teams has shown to improve the financial performance of a business, according to research by McKinsey. Data the business consulting company gathered from more than 1,000 large companies in 15 countries suggests that companies where women made up more than 30% of executives outperformed companies with fewer women executives in the past decade by as much as 48%. The most culturally and ethnically diverse companies outperformed less diverse businesses by as much as 36%.

Innovation and resilience, characteristics that distinguish diverse and inclusive companies, will be crucial as the global economy enters the third year of the pandemic. Otherwise, it will be difficult to bring about a systemic change in the workplace.

Also, factors such as talent shortages and supply chain disruptions have emerged in the past year that will shape the DEI landscape in 2022.

Spotlight on equity

Diversity and inclusion are only two parts of the equation. The other equally important part is equity. Achieving equity requires acknowledging and countering conscious and unconscious bias against underrepresented groups.

European sportswear manufacturer Adidas, for example, committed to fill at least 30% of new US positions from underrepresented groups and made global anti-racism and unconscious-bias training mandatory. US-based tech giants Microsoft and Intel have tied half of executives’ annual cash incentives to successfully achieving diversity metrics.

With the increasing levels of transparency required by businesses for reporting compensation, board diversity, and other workforce management practices, workplace equity has become increasingly important for business leaders that wish to drive DEI initiatives forward.

Remote work and DEI

For an organisation seeking to harness the power of diversity, remote work is a valuable tool. By definition remote work is location-independent. Employers and potential employees can connect in ways that would otherwise not be possible, said Jennifer Nutter, ACMA, CGMA, global financial planning and analysis manager with GAM Investments in London.

Companies are no longer limited to sourcing candidates from local talent pools, and job-seekers can find work that matches their skillset — not just what’s conveniently located.

Pandemic setbacks

The increase in remote working during the pandemic has created benefits such as more flexibility for working parents and people with disabilities and health issues. But it can also exacerbate inequities, such as in career advancement for women, who as caregivers have been impacted the most during the pandemic and require flexibility that could result in them falling behind their male counterparts and not advancing in their careers. Also, it doesn’t benefit those who traditionally cannot work from home or do not have access to the same work opportunities.

And if companies do not consciously work to advance DEI efforts, inclusion and diversity plans may stall even after the crisis is over, McKinsey suggested.

Younger workers want to see action

In 2022, more and more educated professionals under 35 are expected to prioritise personal values when they decide where to work. That means they may avoid companies without a diverse workforce, clear promotion track, and commitment to confront biases.

Hiring a DEI manager is a step in the right direction but not good enough. Young professionals expect action and expect to be heard, according to a 2018 Deloitte survey of more than 6,000 respondents across several demographics. Those younger than 35 define diversity differently than older respondents do; they seek a plurality of experiences, identities, and ideas in the workplace.

It is critical for business leaders to show interest in issues that appeal to their employees, actively involving the younger workers, so that they can effect genuine change.

Adapted from: “DEI trends that can boost performance in 2022”, by Sofia Simeonidou, a freelance writer based in the Netherlands, published on FM magazine on 24 January 2022.