How diversity and inclusion can give your business an operational advantage
Boosting diversity and inclusion isn’t just the morally right thing to do. It can also build operational resilience, fill talent gaps, and improve your ability to adapt, transform, and compete. How can your company capitalize on the diversity dividend?
The past two years have pushed operational resilience to its limits. Even as the economy stabilizes and attention turns to the future, there is no respite from the operational upheaval ahead.
Immediate drivers of operational restructuring include the need to manage rising costs in areas such as energy and materials. Many companies are also looking to put their operations on a stable and sustainable footing after the rapid adaptations needed to get through the crisis and the resulting challenges to restart operations.
Looking ahead, it is important to identify and deliver the capabilities needed to cope with disruptions and keep pace with rapidly changing customer demands. What is clear from my work in operational restructuring is that the talent, skills and commitment of the workforce are as important, if not more important, than technology in this operational modernization.
Sustain your business
So where does diversity and inclusion fit into this workforce and into this broader operational upheaval? Research conducted for our latest report on Act Now’s restructuring, From Recovery to Growth, highlights how diversity and inclusion, and related environmental, social and governance (ESG) considerations, are now at the heart of the expected functioning of your business.
What also comes across strongly from the survey of 400 business leaders is that diversity and inclusion can help future-proof your organization. Nearly three-quarters of respondents believe the COVID-19 pandemic has strengthened their commitment to diversity and inclusion.
When asked about the main benefits of prioritizing diversity and inclusion when managing change or restructuring, nearly three-quarters also cited the positive impact on innovation and growth.
In turn, a significant proportion highlighted employee engagement and attracting top talent.
D&I attracts top talent
What do you see as the key benefits of prioritizing diversity and inclusion as an effective tool in your current change management or restructuring? Summary rank 1 -3
Source: Act Now Survey: From Recovery to Growth, PwC, 2021
Diversity and inclusion as a solution to operational challenges
But what about the costs? What about managing labor shortages that are holding back supply and disrupting production? Again, we see how looking at operations through a diversity and inclusion lens can make a real difference in these otherwise difficult to manage areas.
A striking example is overcoming the shortage of truck drivers. Although this made headlines due to fuel shortages in the fall of 2021, the problem has been building up for years. And while much attention has been focused on wages, conditions and the loss of EU drivers, another reason is that half of the UK population cannot – or currently does not want – to approach the steering wheel. Only 1% of truck drivers are women. The proportion of drivers from ethnic minorities is also disproportionately low.
The shortage of truck drivers is exacerbated by an aging workforce – 29% are 56 or older, compared to 20% who are 35 or younger. Looking at the transport sector more broadly, vehicle technicians, mechanics and electricians have the dubious distinction of being the most male-dominated jobs in Britain.
The obvious solution to this limited and shrinking talent pool would be to attract more women and people from ethnic minorities. But recent research by the Office for National Statistics (ONS) has highlighted a number of issues holding back more diverse recruitment and retention, including gender stereotyping, inappropriate behavior and inflexible working practices.
We have seen in other industries how these barriers to diversity and inclusion can be overcome. As the ONS report points out, the first step towards change is recognizing that it is necessary. Yes, moving the dial takes time. But expanding recruitment is the only sustainable way to alleviate driver shortages and the resulting disruption and costs. So where do you start this more diverse recruiting campaign? An easily accessible starting point would be the diverse and road-knowledgeable population of taxi/taxi drivers and bus drivers. They will need training to become truck drivers. But having driven professionally and worked shifts, they know what that entails and many would appreciate the opportunity.
A closer look at operations through a diversity and lens highlights the importance of flexibility in building retention. In one telling example, a logistics company had spent a lot of money trying to retain delivery workers or replace them if they left. A lack of flexibility in working hours was found to contribute to high staff turnover rates. This included clashes with dropping out of school or childcare arrangements. Simply giving drivers more weight when working could solve these problems. Customers may not receive their packages by 4 p.m., but that’s surely better than having too few drivers to meet overall demand.
It is clear that recruitment and retention issues and their operational impact go beyond transportation. Construction is an equally male-dominated industry where many companies struggle to fill vacancies and therefore deliver projects on time. Within the professions, women make up less than 10% of computer, mechanical and production engineers.
The need to bring diversity into the strategic conversation about operational sustainability in these and other sectors is therefore clear.
Likewise, remote work during the pandemic has paved the way for more flexible, autonomous, and work-life-balanced hybrid work arrangements. But some employers still view people who work flexibly as lacking commitment, even if there’s no reason to. They are therefore absent. Embracing this type of work would improve engagement, loyalty, and retention, all of which are critical to ensuring sustainable and effective operational capabilities.
Harness the potential
So, how can your business turn diversity and inclusion into an operational and broader competitive differentiator? The starting point is to ensure that diversity and inclusion are on the business agenda from the start. This would be supported by data and Key Performance Indicators (KPIs) to look at your operations through a diversity and inclusion lens, track performance, and drive improvement and innovation.
Unfortunately, this type of data collection is rare at the moment. Less than 30% of companies in our From Recovery to Growth survey have measures in place to monitor both inclusion and diversity. Better data and tracking would help identify potential for problem solving and how this can be achieved. It would also help identify barriers to progress and bias and discrimination within the organization.
Equipped to compete
So rather than seeing diversity and inclusion as just a benefit or just a reputational issue, it could be the solution to operational problems, a cornerstone of competitiveness, and a way to future-proof your business.
To learn more about the key role of diversity and inclusion in successful restructuring and change, sign up for a free copy of our From Recovery to Growth report. Personally, I found the investigation fascinating. It’s also hugely encouraging to see how many business leaders are embracing the diversity dividend.