It’s just over a year since Elon Musk took to his social media platform X (fka Twitter) to declare: “DEI must DIE.” The controversial tech billionaire argued: “The point was to end discrimination, not replace it with different discrimination.”
Musk is just one of a number of high-profile figures to wade into the debate about the merits of diversity, equity and inclusion. While those who declare themselves progressive and liberal argue that DEI policies have advanced the cause of equality and social justice over recent decades, others argue that some of these policies have gone too far. The increased polarisation of politics has seen DEI entangled in so-called culture wars and conflated with what some conservatives label “wokeness”.
With many in the incoming Trump administration, including Musk, talking openly about rowing back on the DEI agenda, how that actually plays out in the workforce and in the boardrooms of corporate America will be interesting to watch.
For now, the research clearly implies that DEI initiatives support happier and more productive workforces. Management consultant McKinsey reported research in 2019 that showed companies in the top quartile for gender diversity within executive teams were 25 per cent more likely than those in the fourth quartile to have above average profitability.
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The greater the gender diversity, the higher the likelihood of outperformance, the research revealed, with the most gender diverse companies outscoring the least by 48 per cent. The results were also clear in regard to ethnic and cultural diversity, with 36 per cent outperformance between the first and fourth quartiles.
McKinsey identified five key areas of improved performance in companies with strong DEI practices. These were: enhanced recruitment ability, better decision making, increased customer insights and innovation, higher levels of employee motivation and satisfaction, and better brand reputation.
The case underlined the argument that DEI isn’t a cost or a nice-to-have initiative that can be ditched turning financial downturns. As McKinsey’s Bryan Hancock put it: “D&I is good business. It doesn’t have to be at the expense of financial outcomes. This isn’t an issue where leaders can say, ‘We can’t do diversity right now because we are under a lot of pressure.’ Diversity is one thing we have to be mindful of in every context.”
Ireland is now one of the most progressive countries in the world in the DEI space, on the back of a strong programme of broader equality legislation that has come into law in recent years.
While there is general support for diversity and inclusion among Irish organisations, one of the challenges companies here have had is accurately assessing their workforce and the challenges their people have. What gets measured gets done, as the saying goes.
This is a challenge that has been addressed recently by Inclusio, an Enterprise Ireland-backed spin-out from Dublin City University. Inclusio’s mission is to improve work culture through comprehensive data capture. It employs a combination of psychology, technology and ethical AI to provide a scientific, evidence-based approach to measuring people and culture.
By collecting more than 80 data points from anonymised staff profiles, the company says, organisations can build aggregated pictures of who their people are and how they feel about the organisation. This evidence can then inform workplace cultural initiatives including DEI programmes.
Among the general findings from Inclusio’s work is a high number of people identifying as neurodivergent. This ranges upwards from 14 per cent, with a figure as high as around 19 per cent in the construction sector, says the firm’s founder and chief executive, Sandra Healy.
“Neurodivergent people experience lower levels of psychological safety and trust than the general population. Job supports are important to them, including a strong relationship with their manager and a high level of one-to-one interaction and connection with teams in many cases,” she says.
People from the LGBT community report slightly lower levels of wellbeing and higher levels of marginalisation. In relation to revealing gender identity, where a company has good policies and practices that are well communicated, Inclusio found lower levels of “prefer not to say” responses from employees.
Some of the more interesting findings relate to generational differences in the workforce. This is a huge issue as there are now five generations of employees in the workplace and there is a huge challenge for organisations to understand the nuances and experiences of different groups in the workforce.
Gen Z, those born after 1997, who now comprise 30 per cent of the global workforce, feel less of a connection with their employers than the previous generation, millennials. Gen Z employees actively research the culture of an organisation before applying for positions. Healy agrees that this generation has high expectations and a low tolerance for organisations that don’t live up to those expectations. This can sometimes cause issues for organisations that don’t want to take a stand on social or political issues.
Gen Z’s careers are often more transient, they are more likely to move around than millennials and their social networks and sense of identity are less bound up with the workplace than other generations. With the cost of replacing departing employees put at the equivalent of between six and nine months’ salary, short service and low levels of retention can be expensive. As Healy puts it: “You may not be able to keep them forever but you absolutely must ensure you get your return on investment.”
Levels of engagement have long been a cause of concern but Healy says that “belonging is the new engagement”.
“Belonging is an output of a psychologically safe organisation where every person has a consistent experience. It’s a vital metric,” she says.
For an organisation to thrive, it is clear that understanding the diverse nature of the workforce and having consistent and well-communicated policies to support employees is the key to high rates of productivity, innovation and success.