Have you ever felt like your company’s diversity program is failing to deliver on its promises? With all the media attention companies are receiving lately for their efforts to build diverse, inclusive workforces, it is easy to feel like your company is not quite getting it – and in the process failing to attract, engage, and keep all the best talent. If effective diversity management remains a struggle in your organization, you are in good company. The trends show that even though diversity is becoming an increasingly important factor in organizational success (and even survival), in many industries the numbers haven’t meaningfully changed in years. And a quick glance at the panel of executive leaders in many of the world’s largest organizations reveals that despite best efforts, increased training, and lots of money, diversity remains the unattained goal, especially at the top.
At SAP SuccessFactors, we’ve been investing considerably in understanding and addressing the challenges that companies face in this area. We recently surveyed our customers to learn more about the state of diversity and inclusion in today’s organizations and what it will take to truly drive change that lasts. Based on an assessment of business leaders across 58 companies of all sizes in 19 different industries, we found:
Diversity is important to business leaders, but approaches remain rooted in the past
We know that diversity is receiving a lot of attention lately as a workforce issue, but how important is it really to the people who are continually balancing finances, shareholder needs, and organizational objectives? Nearly two-thirds of our respondents indicated that compared to other strategic priorities, diversity is a high strategic priority for their organization. And this priority is not one that is likely to fade into oblivion, unaddressed. More than half (57%) of respondents reported that diversity is strategically more important than it was last year, with an additional 40% indicating that it is just as important.
But even though the strategic importance of diversity is growing, the business practice of intentionally incorporating inclusive practices in strategy and operations has not caught up. Our respondents indicated that they still focus primarily on legally mandated diversity practices such as diversity recruiting, training, and EEO reporting, declaring current use of these compliance-focused practices at a rate that was three times more common than current use of more strategic approaches (for instance, creating succession and development programs with diversity in mind). This mirrors observations made by researchers Frank Dobbin and Alexandra Kalev in their recent Harvard Business Review article, where they wrote: “Companies are basically doubling down on the same approaches they’ve used since the 1960s – which often make things worse, not better.”
Creating real change may require us to look differently at the problem
So why the disparity between strategy and action when it comes to diversity? Our results show that companies are driving diversity initiatives forward, but mostly aiming at soft benefits: increased employee engagement and a more inclusive culture. What they aren’t fully realizing is the power of diversity as a bottom-line-boosting engine that makes them more agile, competitive, and ready to address customers’ needs.
We asked our respondents to share their view on the impact of diversity on their most important stakeholders outside the organization – their customers. Only 15% identified diversity as a key issue impacting not just the internal workforce, but customers as well. The research agrees with this small minority. Extensive research has shown that the diversity of a company is directly related to customer satisfaction and the ability to deliver an improved and therefore profitable customer experience. A diverse workforce ensures greater financial performance in large part due to a company’s ability to serve an increasingly diverse customer base. Why? Because a workforce that reflects the market it serves yields an empathetic and first-person understanding of customer expectations, of product expectations, and brand experience. As 63% of respondents identified diversity as something exclusively relevant to their internal workforce, it is clear that education and awareness around the far-reaching implications of diversity and inclusion have a long way to go.
Not surprisingly, our respondents indicated several key roadblocks to advancing diversity and inclusion progress, among which lack of senior leadership support (21%) and time and other priorities taking precedence (22%) were cited. But the trends suggest that diversity and inclusion are key levers to ensure profitability and customer loyalty – and senior leaders need to take notice. As HR professionals, we can ensure business leaders are aware and accountable for driving diversity and inclusion comprehensively across the organization, or they risk this being a factor in their customers’ decisions to move to the competition. The businesses that will not only survive but thrive tomorrow are not asking “Should we focus on this?” today. They are asking “What should we focus on next to ensure we have a strong workforce that can meet the needs of our customers tomorrow?”
To see more findings from our Diversity & Inclusion customer survey, check out this infographic. To learn more about how you can drive diversity and inclusion comprehensively across your organization leveraging SAP SuccessFactors solutions, visit Diversity and Inclusion.