Building a diverse workforce: How and why do we put a value on DEI?

All the rhetoric around diversity can pay dividends, with simple changes capable of creating positive impact over time. Inflexion’s Talent Director Freddy West brought together the portfolio and facilitated a panel to discuss this at Inflexion’s recent People Leaders Exchange.

It’s been widely reported that diverse companies perform better. Elizabeth Cowper founded Ludo to address precisely this. She shares eye-opening stats: a board comprised with a third women achieves 10x greater performance, and if we reach gender parity globally, it’d add $12 trillion to global GDP. Having founded B2B SaaS platform Ludo to focus on inclusion on the workplace, she is clearly well versed in numbers.

But is the drone making decisions makers weary of the rhetoric? “People leaders are busy and DEI can become white noise.” This is why showing the impact of diversity on bottom lines is key.

Her passion for proving the return on diversity is shared by Shane Loidolt a former Organizational Transformation leader at Disney and S&P Global. “The finance teams within companies often shift from most cynical to the biggest diversity champions once they see proof,” says Shane. “Once they’ve spent a bit of money on it and you turn the crank a few times, they see staff churn go down, hiring becomes easier, and revenue per employee goes up. Their attitude changes noticeably and they help to reinforce the narrative of why we are doing this and how we can get it done. It comes down to people, processes and systems.”

It’s clear the evidence is important in getting buy-in, and then it’s important to establish a culture of individual and organisational accountability across all levels.

How to build diverse teams

“Instead of talking about DEI on its own, it’s important to look at everything through a DEI lens,” stresses Lucy Brown at Mercer. She explains that the number one risk for many businesses is people risk, and that DEI is hard to prioritise when less than a third of organisations have an appointed DEI leader. “The roles should be created as that creates a space to talk about it,” Lucy advises. She outlines the following approach:

  • Strategy should be rooted in proof, data and analytics
  • A team should be created which is comprised of aligned and committed workforce and leaders
  • DEI should be weaved into policies, practices and programmes
  • Accountability should be assigned, with goals set, progress measured and shared transparently

The idea of prioritising and using numbers was backed up by Shane. “The first step in anything is what you’re looking to optimise for,” he points out, alluding to a former employer whose management were fairly similar in demographic and so lacked diversity of thought. To address this, they doubled down on the ‘why’ it mattered, drawing on facts about the importance of diversity. “We also leaned on EQ – humans don’t want to miss out on opportunities, so we showed them the importance of this to them. We also tied it to compensation since people care about their paychecks. This helped us improve diversity at the exec level as well as talent attraction as more people showed up at outreaches.”

Another firm Shane worked with took a non-traditional route to boost diversity whilst saving money and empowering employees. The firm needed tech expertise but rather than paying high rates for external hires, the firm sent its cleaners to a machine-learning bootcamp. Thereafter their salaries were increased, meaning the staff felt they were both earning and learning, while the firm got the talent it needed at a 40% discount to market rate. “We challenged the status quo,” Shane recalls.

This approach resonates with Lucy’s advice: “Think outside your industry if you’re struggling to find talent. Look for the skills you need and shift your search rather than focusing only on your existing industry pipeline.”

While the numbers are important for buy-in, they’re not the only thing. Concludes Elizabeth: “The happiness of employees is important, since if you don’t feel well, you won’t be your true authentic self. That means you won’t perform at your best, and so you won’t be as productive at work. If your happiness index is high, so is your productivity. The two things need to be interlinked, with co-joined KPIs for wellbeing and DEI.”

Inflexion is committed to DEI both at the firm level, with nearly a fifth of the partnership comprised of females, and at the portfolio level, with Freddy committed to supporting more diverse boards and with a large proportion of the portfolio embracing the UN’s Sustainable Development Goals around gender equality (5) and reduced inequalities (10). “Attracting and retaining strong talent is key for the success of businesses, and doing so means fostering a culture where individuals feel welcome, happy and nurtured,” says Freddy.

All Inflexion portfolio companies, regardless of size or ownership stake, have full access to our Value Acceleration resources covering ESG (including D&I), digital enhancement, international expansion, M&A, commercial strategy, and talent management.