Why Diversity & Inclusion are More Important Than Ever

While it is right to acknowledge that there have been significant improvements in diversity and inclusion in many organisations, there persists a stubborn lack of representation in certain industries and levels of the hierarchy. 

For example, in the UK, there is a distinct lack of ethnic and gender diversity at the boardroom level, especially in smaller companies, according to an analysis by Company Matters. In the US, the percentage of women on exec boards is around 30% for the S&P 500 and 24% for small caps. Pew Research has found that Black and Hispanics remain underrepresented in STEM sectors. 

Since 2014 McKinsey Consulting’s analyses of freely available market data have been showing the significant economic performance premium arising from diversity and inclusion in the boardroom.

Their data set showed that ‘Companies in the top quartile for gender diversity on their executive teams were 25 percent more likely to experience above-average profitability than companies in the fourth quartile’.  This is up from 21% in 2017 and 15 percent in 2014. In short, the more gender-balanced a business was, the better it performs. Ethnic and culturally diverse firms sitting in the upper quartile for diversity outperformed those in the 4th quartile by 36% too.

Has progress towards D&I been slow?

Even though it’s clear that greater representation equals greater economic performance the progress towards D&I has been slow. In the US and UK female representation on exec teams has risen from just 15% to 20% over the last 8 years and from 14% to 15% globally since 2017. Ethnic and cultural representation has moved from 7% in 2014 to 13% in 2019. Its progress, but arguably slow given the year-on-year missed economic opportunity of a diversity-primed boardroom.

Don’t overlook unconscious bias.

With D&I being so crucial to a company’s socio-economic success it’s vital that companies further improve diversity initiatives, particularly in the hiring arena where exclusion occurs primarily.  Again, we acknowledge that great strides have been made to combat conscious discrimination largely through enacting D&I corporate policies built on a bedrock of employment legislation. 

Yet, another damaging form of discrimination termed Unconscious Bias (UB) or Implicit Bias has been more recently identified as a significant barrier to D&I .

Unconscious Bias is present in all of us and can be defined as a subconscious attitude, (created from a lifetime of absorbed experiences), that can impact the way we think and feel about others without us realising it.  It happens because our brains can only consciously process 40 pieces of information a second, yet we can unconsciously process 11 million pieces. To keep up with all the stimuli we take mental shortcuts to make decision-making easier, but this leads to the kind of UB problems shown in the two examples below.

• A Yale University study found that both male and female scientists (who had been trained to hire objectively) were more likely to hire men and view them not only as more competent than women, but were willing to pay them $4,000 more too.

• A study by UChicago and MIT, titled, ‘Are Emily and Greg more employable than Lakisha and Jamal’,  found that applicants with white-sounding names received a shocking 50% more callbacks for interviews.

Action

It’s clear that there is still work to be done to improve diversity and inclusion and there are massive commercial gains to be achieved from doing so. What we can do now, is focus our efforts on the recruitment process which is the point where a significant part of an organisation’s discrimination and exclusion occurs. 

Many organisations (including FTSE and Fortune 500), are engaging in training to eliminate UB and some of the courses ask participants to complete Harvard University’s Implicit Bias Test. This UB test measures whether people have inbuilt positive or negative associations with different ethnicities or sexual orientations. After the test, the participant receives coaching on how to mitigate their UB. 

This sounds good in theory, but in practice, UB training outcomes have often been underwhelming. A rigorous study by Professor Edward Chang from Harvard University showed that 3 weeks after receiving an hour-long diversity training participants from an international professional services company were still showing unconscious bias against female applicants versus a control group. (This was a large experiment with over 3,000 participants.)

It's not totally surprising when you think about it. Pigeon-holing UB training into a 1-hour induction course in a busy, distracted corporate environment is not conducive to learning and retention of information. Yet, this is how many organisations deliver UB training; it’s often a 1-hour slot in an information-overloaded induction week. For learning and resultant behavioural change to occur in the area of UB, training should take place over a longer period of time.

Also, research from University of Memphis has shown that a form of UB training called perspective taking, (where participants take on the perspective of others), may have a long-lasting positive impact on behaviour.  These impacts may be particularly powerful for those who are low in dispositional empathy, (e.g., struggle to see things from another person’s point of view)

The message here is while great progress has been made in providing equal opportunities to all in the workplace the diversity and inclusion agenda still has some way to go. 

Diversity training, while well-intentioned, has varied in its effectiveness and is potentially being undermined by generalised, one-off, and therefore easily forgettable training.

However, by using Screenloop's Interviewer Training & Interviewer Shadowing solutions, which involve targeted training interventions, long-lasting behavioural change can be achieved and the D&I agenda can receive a much-needed boost in momentum.