Diversity, equity and inclusion: The way forward

Diversity, equity and inclusion continues to be super critical throughout 2022, in which the new strain variants, continuation of remote working, the great resignation, business uncertainties and varying pace of return to normal will be prevalent. Read on to know the way forward for DE&I.

The incorporation of diversity, equity and inclusion in the workplace has seen eight decades since President Truman’s Executive Order 9981 for ethnicity-based diversity in the United States. Two decades later, the fundamental seeds of the modern-day Diversity, Equity and Inclusion were rooted in the Civil Rights Act of 1964 and the allied equal opportunity goals of the enterprises in the United States of America. The subsequent decades upto the millennium saw a slow but clear focus on gender diversity. Organisational policies and focus on acknowledging diversity, inclusion of workforce from multi groups and having equal opportunities across were being crystallised.

We all have witnessed the work environment disruption, digital transformation that the COVID times have brought about. The pandemic, its ramifications and the enterprise and worldwide response have seen significant changes and evolution in the Diversity, Equity and Inclusion policies, function and initiatives in Asia and across the world. So, let’s examine further.

What has been the evolution in the pre COVID times worldwide and across Asia?

The 2000s saw significant strides made by enterprises and other institutions in Asia and worldwide for gender diversity. This research by McKinsey shows that in the 18 years period from the dawn of the millennium, women accounted for two-thirds of forty five million jobs created in 22 OECD countries, despite the still pertaining challenges with relation to permanent vs part time contract types and equal pay.

Asia is home to sixty percent of the world’s population speaking over two thousand languages. This research by McKinsey, highlights the huge potential of adding USD 4.5 trillion to the GDPs of the Asia Pacific country economies by progressing on gender diversity centred enterprise policies, workplace attitude, and legislative steps in the region.

The next decade from 2010 till the advent of the pandemic, saw the rise and increasing acknowledgment of other diversity indices including cultural, physical disability, age and location amongst others. Outsourcing and remote working were two of the significant ways through which enterprises were able to get access to and reap benefits from a cultural, ethnicity and disability diverse workforce. This research by the International Labour Organisation mentions that 12 percent of the world’s population have physical disabilities and are of working age, and should have access to equal opportunities. It also highlights some of the legislative and other measures in this direction, both internal as well as basic partnerships with other United Nations organisations. Organisations in Asia Pacific and worldwide were implementing innovative policies for representation throughout lifecycle, engagement, opportunities, communication, feedback, rewards and recognition, career paths and many others for great business outcomes and organisational reputation indices.

CHROs and leadership initiatives, besides leadership communiques encompassed common canteens, diversity and inclusion calendars with multi-cultural festivals, events such as food festivals along with respect discussions, money in the jar “punishment”, volunteering and team activities, games such as “I am… but I am not”, painting, music, graduate programmes and many others.

This spelt out tangible business benefits for organisations as well. A McKinsey study found that organisations with gender-diverse leadership teams were likely to exhibit 25 percent increase in profitability and those with culturally and ethnic diverse leaderships were expected to achieve over 36 percent increase in profitability. Furthermore, this McKinsey research from 2015 mentions that Companies in the top quartile for gender diversity and racial/ ethnic diversity are 15 percent and 3 percent more likely to have financial returns above their respective national industry medians, respectively.

And Asia has shown exemplary leadership in this area. This PWC research in 2016 highlights the importance given to talent, diversity and inclusion by CEOs across Asia with scores ranging from 77 percent in Japan to 83 percent in China, and 87-88 percent across ASEAN/ Singapore to 92 percent in India.

This detailed research by Deloitte in the beginning of 2018, highlighted the improvement in organisational KPIs as a result of the DE&I initiatives in terms of the many fold increase in innovation, performance, revenue and business outcomes achievements. It also spells out the significance of leadership, cultural and training and development aspects in the DE&I ecosystem. This article further enumerates the turnaround and significant improvements in Qantas for 2017, and the CEO’s attribution to the diverse and very inclusive organisational environment and culture behind this exemplary performance. Their DE&I initiatives resulted in improved risk management, divergent points of view and debates, better strategy and overall betterment of outcomes.

A similar Kellogg insight study of close to fifty gender-diversity announcements by technology companies from 2014 to 2018 stated that if two companies released their diversity figures on the same day, the share price of a company with 40 percent women would increase by one percentage point vis-à-vis the share price of another company with 30 percent women.

A global report from the International Labour Organisation right before the advent of the pandemic mentioned that companies with more diverse and inclusive cultures and policies witnessed a close to 60 percent increase in innovation and slightly under 40 percent better assessment of customer demand and interest.

In this period, SAP announced its commitment of one percent of its global workforce being people on the autism spectrum. In the year of 2018, Shell was conferred the D&I in Asia Pioneering Initiative Award for their Workplace Accessibility programme; and in the same year, in the D&I in India Best Practice Awards, IBM and Dell EMC were recognised and felicitated for their inclusion and equity work.

Besides gender, differently-abled, ethnicity and country location, diversity and inclusion also started to include sexual preferences as well. This study from Heidrick and Struggles in 2019 highlights trends in the inclusion of employees from the LGBTQ people communities across Asia with Australia and New Zealand leading the way, and a number of enterprises lending support to the Hong Kong LGBT+ Inclusion Index and more than 40 percent of surveyed companies having an LGBTQ inclusion programme. From an overall Asia Pacific perspective, more than 80 percent of the surveyed companies attached great importance to their DE&I programmes and the impact on the personal careers of the surveyed senior executives.

From the perspective of legislation, governments in Asian countries such as China, India, Japan, and Singapore have leveraged disability employment quotas, rights and bills for people with disabilities, subsidies, penalties, incentives and infrastructure improvements in the 2010s. Increasingly aligned and closer public private initiatives were ensuring synergies of government policies and adoption in private enterprises.

What was the impact of COVID on Diversity, Equity and Inclusion initiatives?

There were many positive as well as negative impacts of COVID on the DE&I initiatives. In 2020 during the survival phase, there were apprehensions that the DE&I which was perceived as nice -to-have, may get sidelined as this Heidrick and Struggles research highlights.

The challenges

According to this research by the World Economic Forum, the gender inequality in terms of pay, job losses as well as additional home responsibilities has hit women workers more disproportionately.

Besides the increase of the global gender gap by close to a generation from around 100 to more than 135 years, the World Economic Forum’s Global Gender Gap Report 2020 shows that women are, on average, under-represented in most new age economies especially in high technologies such as artificial intelligence, cloud computing and engineering.

McKinsey’s paper here highlights the challenges that communities of diverse groups of women, LGTBQ, working parents, other ethnicities faced in terms of overwork, overlooking, mental health issues, work-life balance and opportunities for growth. Only one-sixth of diverse employees felt truly included and nine out of ten employees faced challenges in execution of their DE&I initiatives.

The positives and opportunities

As Asia and the world moved from survival to the new normal and appraisal modes for the past two years, trends of extended remote working and global workforce, gig economy, virtual collaboration, volunteering and team work activities ensured a more widely diverse and inclusive workforce. Especially in Asia where there has been immense redirection of work from the rest of the world. This LinkedIn research paper states that China, India and Singapore are leading in terms of remote job applications. Research company Global Data says that Asia Pacific saw the biggest hiring in big data amongst technology industry companies with close to 5 percent increase in jobs.

Furthermore, Gartner predicted here in the latter half of 2021, that more than half of the workers will be remote by the end of the year: a combination of international remote, contractor and gig working and crowdsourcing for bursts.

Considering these factors as well as the ongoing great resignation, this spells out great opportunities and upsides for DE&I initiatives. The new age HR strategic KPIs focus a lot on diversity and inclusion indices and initiatives as a part of the new age innovative, culturally rich, risk responsive, agile and adaptive organisational culture. This Gartner research highlights the strategic importance of diversity leaders in conceptualising, designing, implementing and monitoring the new age workplace which encompasses needs of employees of all diverse backgrounds. Leadership must have an inclusive and growth mindset for managing up to five generations of employees in enterprises: along with gig, contractor, and crowdsourced workers.

Companies are also continuing to expand their budgets and investments in expanding DE&I initiatives even as they make budget cuts elsewhere.

This Economic Times Article towards the end of 2022, highlighted how 71 percent of Indian companies enhanced their DE&I initiatives compared to 60 percent globally, especially due to leveraging technologies in the workplace aligned to these initiatives.

CHROs and enterprise leaders have adopted policies such as continuance of the flexible hybrid/ work from home, creche and child care benefits, shorter working weeks, increasing in paid and unpaid time-outs, paid leaves reimbursements, health and wellness initiatives, return to alumnus have been notable additions to the widely implemented till the advent of the pandemic.

What are the key notable DE&I topics that the pandemic has brought about?

COVID-19 brought about a paradigm shift for CHROs and leaders in a few additional areas which were less prevalent in the preceding era: notably skills versus experience, initiatives for working parents, vaccination status, and cultural inclusion.

Skills versus experience hiring

The shift towards skill-based hiring is a great advancement in organisational diversity and inclusion metrics and addresses hiring biases across gender, industry types and experience.

This research by McKinsey highlights some of the best practices leveraged by companies to move towards skill-based hiring. This has been having great impact especially in Asia’s context due to the availability of a great diverse talent pool from the covid hit verticals – retail, hospitality, aviation, trends of younger workforce, so on and so forth. LinkedIn’s analysis in the middle of 2021 identified software, technology, banking, finance, education and insurtech as some key job categories across Thailand, Malaysia, Philippines, Indonesia and other parts of Asia where skilling, upskilling and reskilling from a wide diverse talent pool across these countries could immensely bridge the gap.

Handling working challenges

This research by the World Economic Forum says that working parents have indeed borne the brunt of the COVID-19 pandemic. This relatively under-focussed diversity group’s challenges are further augmented in Asian countries. Working parents across China, Japan, India, South Korea, Mongolia, and Maldives have also been dealing with study from home and hybrid schooling, besides the usual working challenges. The region’s joint families, relatively limited and smaller demarcated spaces have added to the worries.

Besides the usual monetary and leave benefits, employers are now also including extra flexibility covering daily or weekly shift rotation/ sharing/ allocation, leave with reduced pay, sponsored or subsidised childcare, inclusion of fathers, up-skilling on return, working parents resource groups and others

Addressing vaccination status

With vaccination drives, legal views and policies varying across countries and industry verticals across Asia, CHROs across the region are fine-tuning their policies and tactics to remove bias, have inclusion and minimise litigations, claims and damages.

HR leaders are updating their DE&I and HR policies to incorporate this new diversity category amidst the requirements of in-office or hybrid working, travel responsibilities, and regulatory and personal guidelines and preferences. There are questions around day-to-day operational working, dynamics and reporting of the vaccinated and non-vaccinated categories of employees. Employment contracts, bonuses, leaves, vaccination passports, travel guidelines, communication, health and insurance benefits and personal data protection are some of the tenets of the evolving HR policies.

CHROs and leadership teams must carefully consider all these factors that ensure an equal and transparent working environment; additionally, employers and employees should be aware of all legal aspects including risks, liabilities, claims, and entitlements.

Fostering collaboration focusing on cultural nuances

With an increasingly diverse workforce especially across Asia, CHROs have been focusing on improving employee experience across these diverse categories through their DE & I Initiatives. In this McKinsey Research, this estimate states that employees with a positive experience are eight times more likely to stay at their organisations. In a recent Pan-Asia survey, 23 companies in the Philippines claimed the awards for the best companies to work due to high levels of employee engagement. Also, a Willis Towers Watson survey in mid-2021 highlighted that nine out ten organisations in Asia are taking extensive steps to improve employee engagement and experience.

In the almost overnight remote working induced by the pandemic, with little lead time and preparation for this diverse workforce, CHROs and their teams drew out policies and communication suggestions including dos and don’ts covering emails, online meetings and working hours etiquette, language and idioms tips, hacks of cross culture for instant messaging, naming conventions and other aspects.

A great example of DE&I tactics was exhibited by the online virtual language exchange classes of the AnyMind Group in Japan. The non-Japanese employees across Europe, Middle East and rest of Asia learnt Japanese, and the Japanese employees improved their English skills.

Diversity and Inclusion also contributes immensely to the leadership succession plan, especially in these COVID times. This Article on LinkedIn highlights how to leverage diversity along with high performance and potential candidates to build a strong, robust, de-risked succession plan.

Hiring and onboarding older workers

This World Economic Forum research highlights how older workers are being overlooked, and the advantages they can bring about to their employers especially in the post COVID recovery period. Considering the great resignation and the multiple job and employment options available to many younger workers, employers can well do to avail of the advantages of minimal training, dedication, mentoring, cost savings, integrity, focus, work-life balance, openness in communication and feedback, dependability and less attrition that the older workers bring about.

The Government of Singapore under its Senior Worker Early Adopter Grant (SWEAG) provides considerable funding and other benefits to companies who implement higher internal retirement and re-employment ages over and above the usual statutory ages.

What is the role of technology in the DE&I initiatives of the COVID period?

Technology has been a great enabler in the COVID world. Gartner’s research in the early days of the pandemic mentioned that over 90 percent of Asia Pacific CHROs had implemented WFH arrangements through the support of their CIOs. Besides the HCM tools and infrastructure, the diverse workforce has been leveraging self-service platforms, collaboration tools and employee engagement applications to quickly adapt to the new normal and improve engagement.

Many diverse groups who were relatively less technologically savvy, underwent training and IT enablement to come up the curve. Cyber security training and enablement were provided along with functional and general IT training. Gamification, mentoring and innovative quizzing have led to familiarity and retention. Successful digital transformation has the fundamental tenet of a superior employee experience.

Willis Towers Watson’s research highlights that nine out ten employers in Asia are focusing most critically on a superior employee experience.

For management and CHROs, super teams (amalgamation of human intelligence with automation: machine learning, artificial intelligence, cloud, advanced analytics, and RPA) are providing even better outcomes, data, and intelligence regarding the new-age KPIs including employee engagement and the DE&I ratios and effectiveness of these initiatives.

There is of course the downside of technology. Traditional biases and non-compliance to DE&I initiatives will render the benefits of technology to be null and void. This research by the World Economic Forum highlights how more than 27 million employable candidates, most of which are from diverse groups, are not considered or being overlooked by applicant tracking systems. Another research by the World Economic Forum highlights the advantages as well as the disadvantages of what artificial intelligence can bring to the hiring process.

Similarly with other organisational systems such as skilling and appraisals, the data sets, inputs must eliminate these diversity biases so that the inclusive and diverse new age workforce reaps the benefits and moreover, the leadership teams get true insights into the effectiveness and efficiencies of their widening DE&I policies.

As organisations fully embrace diversity and inclusivity, the human definition of processes and flows, decision making, and the human touch will ensure that HR policies indeed imbibe the related high tech and high touch inputs, flows and outputs.

What are the takeaways for 2022 and beyond?

Although the COVID-19 pandemic has brought about significant opportunities and areas of improvement for DE & I, there still remains a lot of initiative and work to be done in Asia and the rest of the world. Especially considering the multiple waves including Omicron, the continuance of the new normal, the great resignation, increasing competition and in Asia’s context where conversations are not that open as in other parts of the world.

For MNCs with regional headquarters in Asia, their global DE&I policies would need to be fine-tuned to capture the regional nuances and finer aspects. The increasingly heterogeneous workforce correspondingly does need more inclusive leadership with divergent points of view, more resilience, innovation, agility, crisis and risk management, identification of new opportunities, and problem solving.

This research by McKinsey at the end of 2021, highlights that inclusion must be truly embraced, using a combination of policies, leadership, employee perceptions and experiences, and firm policies.

Besides leveraging the plethora of technology tools, CHROs and leaders should continue taking proactive steps to enhance their remote and diverse workforce system and collaboration systems through communication and attention to culture. DE&I initiatives can also be augmented by quizzes, role play, gamification, leaderboard, rewards and recognition. The inputs, settings to data sets, workflows and processes in the technology systems should be uncluttered, free from bias and aligned with the diversity and inclusion ethos of the organisation.

Diversity, equity and inclusion continues to be super critical throughout 2022, in which the new strain variants, continuation of remote working, the great resignation, business uncertainties and varying pace of return to normal will be prevalent. A great organisational culture pivoting on progressive DE&I initiatives can most certainly find opportunities and thrive in these unprecedented and challenging times.