Report: Most Companies Are 'Going Through the Motions' of DE&I

Research identifies practices companies can adopt for success

Kathy Gurchiek By Kathy Gurchiek February 23, 2021
LIKE SAVE
going through the motions

​Corporate attempts to improve diversity, equity and inclusion (DE&I) are falling short, according to new research that raises serious doubts about traditional approaches to the business and social issues surrounding DE&I.

"Roughly 80 percent of companies are just going through the motions and not holding themselves accountable," according to the report, Elevating Equity: The Real Story of Diversity and Inclusion

The report is based on survey responses from 804 HR professionals working in a range of industries as well as interviews and one-on-one conversations about the findings with leaders around the world. JoshBersin.com, an Oakland, Calif.-based HR consultancy specializing in workplace analysis, conducted the research in partnership with Perceptyx, a global survey and people analytics company based in Temecula, Calif.

They mapped 84 DE&I practices to determine the five essential strategies and 15 practices that have the greatest impact on business, organizational and workforce outcomes across all industries, geographies and company sizes.

DE&I as a Business Strategy

According to the report, organizations tend to resort to legacy tactics of bias training, diversity recruiting, and programs that sometimes backfire and contribute to more division than unity. The survey found that:

  • 76 percent of companies have no diversity or inclusion goals.
  • 75 percent of companies do not have DE&I included in the company's leadership development or overall learning and development curricula.
  • 40 percent of companies view diversity work as a way to mitigate legal, compliance or reputational risks, with HR in an enforcer role.
  • 32 percent of companies require some form of DE&I training for employees; 34 percent offer training to managers.

"What we discovered is that DE&I training, recruitment practices, employee resource groups and many other DE&I interventions add value—but not as much as you may think," the authors of the report wrote. "In fact, our biggest finding is very profound. The most powerful strategies to drive inclusion and diversity come from the business strategy, not HR programs. When the business has the right focus, the HR practices add value. When done in isolation … the practices have little or no long-lasting impact."

The report cites The Coca-Cola Co. as a cautionary example.

"The company spent years addressing the issues of racial disparities in leadership and pay (driven by a class action lawsuit for almost $200 million in 2000) and made major progress pushing diversity," the reports states. "But despite the commitment from the CEO, the company's culture did not change, and today Coca-Cola is revisiting its entire 20-year effort to focus on inclusion and behavior change."



What Employers Can Do

Research from Together Forward @Work, an initiative from the Society for Human Resource Management (SHRM), found that "despite years of financial and strategic investments in diversity, equity and inclusion, U.S. companies have notable numbers of workers who express concerns and discomfort about fundamental issues of racial equality in the workplace." SHRM's report stressed the importance of making listening a top priority for all workers, leaders and HR professionals.

The Bersin report noted active listening—and taking action based on what organizations learn—as the biggest driver of diversity, inclusion and belonging.

"It may sound simple, but the most complex issues in DE&I—what to do about Black Lives Matter, or a harassment claim or other complex social issues—are all being discussed by employees. Of the 80-plus practices we analyzed, the most important of all was to 'listen, hear, and act' on what employees want to talk about," Bersin said in a blog post.

He cited Goldman Sachs as an example. It held forums for leaders to learn more about barriers and challenges people in the company face and created action plans. When the employer heard managers wanted to learn about allyship, it created an Active Ally Action Plan that included a printable list of actionable steps.


5 Essential Factors: Core Organizational DE&I Practices

Listen and Act

  • Frequently listen to employees and act on results.
  • Show that leaders believe diversity is good for business.
  • Support people to be their authentic selves.

Strengthen HR Capabilities in All Roles

  • Make sure HR can meaningfully consult on DE&I issues.
  • Invite business partners to actively seek out HR for DE&I issues.
  • Embed DE&I in every HR program.

Engage Senior Leadership Commitment

  • CEO sets DE&I vision and communicates progress.
  • CEO holds leaders accountable for DE&I outcomes.
  • DE&I strategy is an integral part of business strategy.

Set Goals and Measure

  • Invest in benchmarks to measure and drive DE&I.
  • Set outcome goals for inclusion (e.g., inclusion index).
  • Communicate DE&I metrics internally.

Create Accountability for Results

  • Drive DE&I in the entire ecosystem (partners, customers, vendors).
  • Embed DE&I in learning and leadership programs.
  • Chief Distribution Officer distributes accountability for DE&I outcomes among leaders.

Source: Elevating Equity: The Real Story of Diversity and Inclusion, Josh Bersin and Perceptyx, 2021.


Additionally, organizations whose DE&I efforts are successful:

  • Make systemic changes.
  • Listen to employees to identify barriers to DE&I and address them.
  • Have strong, highly capable HR personnel to consult on DE&I.
  • Have leaders who actively drive change into the organization. It makes no difference, according to the report, whether the chief diversity officer reports directly to the CEO, the chief human resources officer or another senior leader. It is important, though, that the DE&I leader work with the CEO to set companywide strategy, much like the chief financial officer works with the CEO on the company's financial strategy.
  • Have clear, measurable goals that extend beyond diversity representation.
  • Have accountability for DE&I at all levels of the organization. DE&I is seen as core to the business and not solely as a way to demonstrate good corporate citizenship or to right wrongs. Tetra Pak, a food processing and packaging company in Pully, Switzerland, built action plans around diversity and inclusion, many of which focus on closing leadership gender gaps and having its market companies systemically focus on DE&I to ensure specific local issues are addressed, according to the company website. The company uses regional DE&I panels to set strategies, define goals and oversee DE&I progress.
  • Focus on DE&I in the company ecosystem, including its partners, suppliers and customers. Cincinnati-based Proctor & Gamble creates packaging for visually impaired customers, for example. The idea was the brainchild of a special Procter & Gamble consultant for inclusive design who is blind.


DE&I Practices That Do and Do Not Work

Effective

  • Leaders believe diversity is good for business.
  • DE&I is in the organization’s ecosystem, including partners, suppliers and customers.
  • CEO sets a vision for DE&I and frequently communicates progress.

Ineffective

  • Mandatory training for employees, managers or executives.
  • Traditional DE&I programs such as employee or business resource groups, mentoring.
  • Absence of collaboration by the head of diversity with the chief executive officer, chief HR officer and all business functions.

Source: Elevating Equity: The Real Story of Diversity and Inclusion, Josh Bersin and Perceptyx, 2021.


Organizations that are most successful at fostering DE&I focus on making systemic changes. That includes, the report pointed out, operating DE&I "as a business function, not a set of HR initiatives, with a well-defined strategy that is owned by everybody in the organization and supported by capable experts."

"If you're looking at spending more money on DE&I, you may be better off promoting an internal leader into the job and spending time developing an inclusive business strategy and set of business objectives, rather than hiring a DE&I expert and then developing and launching a set of new programs," the report stated.

"Remember, the problem we're solving is to create a sense of equity and fairness in the company. These are management issues first, training and HR issues second."



LIKE SAVE

SHRM HR JOBS

Hire the best HR talent or advance your own career.

SHRM WEBCASTS

Building World-Class Employee Onboarding for a New Hybrid World of Work, April 28 at 12 p.m. ET

Building World-Class Employee Onboarding for a New Hybrid World of Work, April 28 at 12 p.m. ET

REGISTER NOW

SPONSOR OFFERS

HR Daily Newsletter

News, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day.