By Tim Newnham - HR.com
This article is part of a 3-piece series titled “Moving Business Beyond Bias” focused on how SAP SuccessFactors is using technology to create equity in the workplace. The series covers the state of equity in the workplace, how HR is positioned to provide the next big competitive advantage, and how you can use technology to rid bias from people-based decisions. In this first piece, I share key information to help shed light on the problem and the opportunity.
Top performing companies have a keen eye on diversity and inclusion and those that achieve their goals are for the most part top performers in their respective industries as well. “The workforce demographic research points to one conclusion: diversity is not an option, it is a fact. The call to action for leaders is cultivating a culture of intentional inclusion, one that has a constant curiosity about how to harness all the best and available talent,” says Dr. Patti Fletcher, Leadership Futurist & Solution Management at SAP SuccessFactors.
Research about who is in the workforce and the implications on innovation, business performance, how people lead, work, and make people decisions, have set the foundation for SAP SuccessFactors’ Business Beyond Bias product strategy. Dr. Gabby Burlacu, Human Capital Management Researcher at SAP SuccessFactors, shared research findings that have inspired SAP in their approach on this topic:
According to a McKinsey study, Why diversity matters:
- Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
- Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.
- Companies in the bottom quartile both for gender and for ethnicity and race are statistically less likely to achieve above-average financial returns than the average companies in the data set (that is, bottom-quartile companies are lagging rather than merely not leading).
- In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.
According to Bersin by Deloitte:
- Global organizations with “mature” D&I practices generated 2.3 times as much cash flow per employee over a three year period.
- Mature practices include having all decision-makers take ownership over D&I, embedding D&I in day-to-day work.
Another study conducted by SAP analyzed financial outcomes, survey data, and workforce metrics in over 500 stores from a large North America-based retail firm in order to determine the aspects of the workforce that matter the most in driving store performance. What they found:
- A diverse workforce can better understand the requirements of an increasingly diverse customer base, ensuring that the products and services your company delivers are the right ones to meet your customers’ needs. When this large retail organization staffed their stores in a way that resembled their respective markets, they saw greater sales as a result.
- In retail, your employees are interacting with customers face to face, providing a visible indication of the kinds of people your company values. 71 percent of LGBT individuals prefer to buy goods from LGBT-friendly companies. 87 percent of differently abled individuals are more likely to buy from companies that employ other differently abled individuals.
- This market is so pervasive that apps have emerged that are designed to help consumers locate diversity-friendly businesses from which to buy.
- Having a sales force that resembles the market you are selling to communicates to your customers that they can expect to speak to someone who looks, thinks, and considers options in much the same way they do—a key to closing the sale, and driving profitability.
Why CEOs believe they’ve solved this issue
They are spending more money than ever before. They have training and programs in place. Their companies likely have a statement about this on their website, so they’ve communicated the importance of this topic. They’ve possibly even hired someone (a Chief Diversity Officer) to manage this issue.
According to Patti, “There is unconscious bias fatigue with CEOs. I have yet to meet a c-suite executive who doesn’t believe that the technology and processes can be overhauled. What they do have an issue with: people don’t change. With billions spent on D&I, with the blame-and-shame tactics that often happen from both training and PR, CEOs and their direct reports have change fatigue which is a mix of ‘are we still talking about this’ and ‘people can’t change’.”
In the second piece, we share insights into how equitable workplaces are putting HR squarely in the hot seat as the people who can drive meaningful change for business continuity. Part 2 can be found here.
