2021 saw both wins and losses for business to become more diverse, equitable and inclusive, but some emerging trends could really move the dial on DEI in the year ahead.
By Helen Tudor, Diversity, Equity & Inclusion Lead, Managing Director in CTS, Sheffield Haworth
The impact of the last couple of years on diversity, equity and inclusion in the workplace has been mixed, leading to both positive and negative outcomes. This poses a significant challenge for senior leaders and HR professionals as we move into 2022.
There is no easy one-size-fits all approach for organisations to solve all their DEI issues. However, there are some emerging trends beginning to move into the mainstream that have real potential to change the game for DEI.
In this article, we’ll reflect on the main challenges of 2021 and those that lie ahead in 2022. We then explore the three key emerging trends that offer exciting potential for furthering the DEI agenda of forward-thinking organisations.
2021 – adapting to the ‘new normal’
It’s a mark of just how fast moving the pandemic has been that the phrase ‘the new normal’ already seems very 2021. Most, if not all, organisations had trialled some form of remote working in 2020 out of necessity. Not only did this not seem to negatively impact productivity in most cases, but survey after survey showed that most employees enjoyed the experience.
As a result of this, and of continuing uncertainty around the pandemic, 2021 was the year when many organisations began to grapple with hybrid working. This in turn helped shine a light on DEI issues within organisations. As McKinsey put it in an article from March 2021, “Women around the world have been deeply affected by the COVID-19 pandemic, which has heightened the large and small inequalities—both at work and at home—that women face daily.”
In a study of women in the US workforce, McKinsey found that 1 in 4 women were considering leaving or downshifting their careers, compared with 1 in 5 men. More worryingly, “three major groups have experienced some of the largest challenges: working mothers, women in senior management positions, and Black women.”
Speaking of ethnic minorities, the rise of the Black Lives Matter movement and evidence (such as this UK government study) showing that ethnic minorities are more at risk of Covid due to the types of work they do helped to propel DEI for people of colour to the top of the agendas of many large organisations.
In this respect, hybrid working has been both a blessing and a curse. It has given many working mothers and caregivers greater freedom to work from home. Yet at the same time, anecdotally many successful women in our professional network are fearful that women working from home could find it harder to progress their careers, due to spending more time out of the office and being left out of key meetings. As well as, more importantly, unofficial ‘out of hours’ conversations that take place in a social environment after working hours.
McKinsey’s Women in the Workplace 2021 report says that, as a result of the pandemic and remote working, “women are even more burned out than they were a year ago, and burnout is escalating much faster among women than men.” The result of this is that the figure of 1 in 4 women considering leaving work or downshifting has since increased to 1 in 3.
The report also says that women are typically doing more to support their colleagues’ mental health than men, at all levels. This means they are taking on extra unpaid responsibilities for which they receive no official recognition, contributing to the burnout already mentioned.
Meanwhile, a recent BCG study of working caregivers in the US, Germany, and Japan found that they were “feeling greater stress than noncaregiving employees”. These employees were more likely to feel that their productivity had suffered and were, on average, 50% more likely than non-caregivers to look for a different job if forced to work onsite fulltime.
In summary, organisations in 2021 reacted to DEI challenges by trialling a range of flexible working models, looking to accommodate the needs of working parents and focusing on attracting and retaining physically impaired talent who would be able to work productively from home. Globally, many organisations also increased their focus on recruiting and retaining people of colour, principally via mentoring, sponsorship, and tailored development programmes.
What’s in store for organisations in 2022
In many ways, we can anticipate that 2022 will bring us more of what we saw in 2021. An increased focus on attracting talent from previously overlooked groups, for example. More experimentation with hybrid working to accommodate working parents and caregivers – especially in those roles that are becoming increasingly competitive.
However, there are three specific emerging trends in 2022 that we feel have the potential to make the biggest impact on DEI this year.
Trend #1: Recognising peer-to-peer inclusion
An article in the Harvard Business Review from December 2021 discusses the huge potential positive impact of peer-to-peer (P2P) inclusion. After studying the phenomenon for three years, the article’s author concludes that “peers have the power to include or exclude other individuals, and the exercise of that power can make a meaningful difference to work performance.”
Examples of effective P2P inclusion cited are:
- To help each other out with work tasks
- To take emotional care of others
- To make physical connections
As the author writes: “interpersonal inclusion between peers helps with retention and growing the quality of employees’ human capital, thus contributing to team effectiveness more broadly.”
P2P inclusion shifts the emphasis from top-down inclusion to make it the responsibility of everyone in the organisation. A committed leadership team is essential, but this research suggests it’s time for inclusion to become part of the working culture.
Interestingly, McKinsey’s Women in the Workplace report suggests this is already happening to some extent. The report says that “women managers are consistently doing more [compared with men in similar positions] to promote employee well-being—including checking on team members, helping them manage workloads, and providing support for those who are dealing with burnout or navigating work/life challenges.”
Indeed, this is one of the reasons why women managers are experiencing higher rates of burnout. The answer is for organisations to recognise and reward the efforts of managers and non-management employees who practice this kind of unofficial inclusion. This would in turn help to encourage the practice.
Trend #2: Tech-enabled DEI solutions
A recent Deloitte survey of around 400 tech executives in the US revealed that “leaders know tech-enabled solutions—a US$100 million market and growing—have significant potential to achieve DEI outcomes.”
As Deloitte says: “tech-enabled solutions can be a powerful catalyst for change—if tech leaders play an active role in reengineering the way data is collected, standardized, managed, analyzed, and reported.”
Existing DEI technologies fall into four main types:
- Candidate sourcing and selection
- Development and advancement, eg via performance management, leadership development, and mentorship/career management
- Engagement and retention – by measuring employee experience, employee communications and the employee voice
- DEI analytics, for example measuring pay equity, promotions, assessing the DEI business case, and managing and analysing employee resource groups
US asset management firm Mercer has identified 105 DEI tech vendors, and believes that the proper use of DEI technology solutions could be transformative. We are inclined to agree, and we certainly see a growing trend in companies hiring senior technology leaders who recognise the role they have to play in furthering DEI in their organisation.
As Deloitte puts it: “Tech leaders can provide the technical expertise and strategic vision required to integrate solutions that span the workforce life cycle to drive diversity, equity, and inclusion across the organization.”
Trend #3: Increasing senior accountability
We’ve touched on this already, with the idea of CIOs taking a more active role in applying tech-enabled DEI solutions and in the idea of senior teams more actively supporting employee resource groups. However, this point takes the idea a step further.
Around 20% of Fortune 200 companies currently use DEI metrics for performance-based compensation, and this is likely to increase. Starbucks has a programme in place that awards a 10% bonus to the executive team if it hits its representation targets and reduces pay by 10% if the representation of employees of colour goes into decline.
Similarly, McDonald’s has a programme in place in which executives will be measured on metrics around improving diversity representation for women and underrepresented groups.
Simiso Nzima, head of corporate governance for the California Public Employees’ Retirement System in Sacramento, California, says bluntly that it is important “to include diversity, equity and inclusion metrics as part of performance evaluation at every leadership level in a company since we know that what gets measured gets managed.”
Moving the dial on DEI in 2022
Each of these trends remains at a relatively early stage, but each is gathering momentum. Combining these trends is likely to prove particularly powerful. Making senior executives’ pay dependent on increasing DEI will make it more likely that organisations deploy tech-enabled solutions to help them measure their performance. Similarly, deploying one or more tech-enabled DEI solutions will make it easier to structure DEI-related compensation packages by increasing organisations’ ability to measure the relevant data.
In 2022, it may still be the forward-thinkers who lead the way, but these firms are certain to follow one or more of the three key trends we’ve highlighted here. Moreover, those who do so earlier are most likely to reap the rewards, whether in terms of improved productivity, an increased bottom line, a more attractive brand, or in their ability to attract more top tier diverse talent.