How diversity can help business go from good to great

Niki Vincent

Dr Niki Vincent. Source: Supplied

Workplace diversity seems to be a buzzword at the moment, but do we really understand what it means?

People often think conversations about diversity are just code for gender equality issues. It’s true gender differences that manifest in pay gaps and lack of flexible work options are urgent matters, but real diversity and inclusion is also much broader. Few leaders understand the implications and benefits of harnessing its power.

In a competitive and increasingly complex marketplace, organisations that set strategies to maximise diversity of thought and reflect the rich composition of our society will be the ultimate winners with both employees and customers.

But while the Weinstein saga and the subsequent #MeToo movement has successfully highlighted problems with sexual harassment at work, other opportunities for change are still overlooked. We rarely hear much about the kinds of workplace issues faced by those from diverse cultural or religious backgrounds, Aboriginal and Torres Strait Islander people, or stories of working Australians who are living with a disability.

That’s because those who are seen as “different” often face exclusion and are rarely considered part of the dominant mix in many workplaces. As one commentator said, “they might be invited to the party, but they’re not asked to dance”.

We might have official policies that promote diversity and all the HR regulations in the world, but if we don’t truly accept, include and integrate every individual in an organisation, and ensure they have an equal voice, we’re missing the point.

Who we are and who we employ

It’s clear our identity and attitudes have changed over the past 20 years in Australia. Businesses need to keep up.

Figures from the Australian Bureau of Statistics (2016) show around 28% of Australians are now born overseas, with a stronger migrant intake from India and China. Around 3% of the Australian population identify as Aboriginal or Torres Strait Islanders. Plus, one in five Australians are now living with a disability, many of them aged 65 and over — a group that also constitutes the fastest growing sector of the community.

Yet these figures are not reflected in most Australian companies.

An updated report released by Australia’s Race Discrimination Commissioner this month, titled Leading for Change, found a staggering 75.9% of senior leaders in Australian business are from an Anglo-Celtic background, with just 4.7% from a non-European background and only 0.4% from an Aboriginal or Torres Strait Islander background.

Likewise, figures around disability employment are also sobering. Those living with a disability aged between 15 and 64 have lower participation rates (53%) and higher unemployment rates (9.4%) when compared to those without a disability (83% and 4.9% respectively). An estimated 34% of people with disabilities work in professional or managerial positions, yet university graduates with a disability take more than 50% longer to get a job.

Shutting people out as they age is also a concern. In the Australian Human Rights Commission’s 2015 report National Prevalence Survey of Age Discrimination in the Workplace, 27% of people over the age of 50 reported experiencing age discrimination at work.  

Discrimination costs money

While discrimination is largely a result of misinformation and false assumptions, it also costs employers millions of dollars in lost productivity, as well as adding pressure to the public purse.

McKinsey has been looking at the issue of diversity for some years. Its 2015 report Diversity Matters examined 366 public companies from around the world and found companies in the top quartile for racial and ethnic diversity were 35% more likely to have higher financial returns when compared to industry medians.

Likewise, statistics prepared by the Australian Network on Disability, in a report called Business Benefits of Hiring People with a Disability, draw on research from Deakin University showing workers with a disability are no more likely to be injured at work than other employees, and there are no differences in performance and productivity. It also identified that employees with a disability have fewer scheduled absences compared to employees without a disability.

From a marketing point of view, better diversity and inclusion practice also makes sense. It’s hard to appeal to all your customers if you have no understanding of their needs.

How many staff in your office have in-depth knowledge of LGBTIQ communities, or those from culturally and linguistically diverse backgrounds? Better insight might allow businesses to expand the reach of their goods and services.

Not charity, just good business

With an ageing population, skill and labour shortages will intensify in coming years. The cost of labour will become more expensive unless the supply pool can somehow be expanded to include those who have not traditionally been seen as a source of labour. Employers will need to “employ outside the box” if they want to have a dependable supply of labour and skills into the future.

Diversifying the workforce and changing employment practices, therefore, is not an act of charity – it’s sound business decision-making. We know customers and staff embrace businesses that show they value inclusion, and they’re often more loyal.

Some academics are pushing companies to go beyond simple “lip service” to diversity with training programs and recruitment guidelines that are never followed up. They claim the best way is to ease up on control tactics and enlist managers to voluntarily expose themselves to different groups of workers and to work together for internal cultural change.

In a Harvard Business Review article from 2016, authors Frank Dobbin and Alexandra Kalev discuss how it’s direct interventions like university recruitment strategies, mentoring programs, self-managed teams and internal task forces charged with coming up with strategies that really make a difference. Importantly, the article suggests some of the most effective solutions aren’t even designed with diversity in mind — they’re good for all employees: for example, flexible work options or more access to individual training or coaching.

The important thing is that we are looking at the most effective ways to move the dial on diversity and inclusion in Australian businesses, and quickly. Boards should have it at the top of the agenda. In an increasingly connected global community, it’s important that we find ways to increase our competitive edge.

We are all different in our own way, embracing those differences (and similarities) in workplaces will provide the boost that can help Australian business go from good to great.

NOW READ: The perception problem with flexible work needs addressing, now


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