Some systems can negatively impact your employees, their potential and wellbeing, and the work environment. Often, these systems operate in the shadows, woven into the very fabric of many corporate cultures, like the ‘The Old Boy’s Club’ or Network, a form of systemic discrimination where choices on employment, promotion or awarding of contracts can be based on sharing a common old school tie or fraternity pin. Regardless of decades of anti-discrimination and equal pay legislation, these relentless and systemic shadows prevent us from establishing a more diverse and well-integrated workforce, and the major benefits it could bring. So, how can a company spot these dark pools of shadows and build a better system to better integrate all employees?
Same Old Problems, Same Old Clubs
In UK government contracts, the ‘old boy’s club’ has been on shameless public display. When it comes to providing personal protective equipment (PPE) to the National Health Service, it’s not what you know, but who you know. The National Audit Office, the UK parliamentary spending watchdog, recently revealed that suppliers with political connections were 10 times more likely to be successful with their bids 1.
This practice of prioritizing your school mates or fraternity brothers over those more qualified to do the job isn’t restricted to the political class, it is also widespread in business. A report by the Sutton Trust, ‘Elitist Britain 2019’ 2, found that 48% of FTSE 350 CEOs came from the private schools attended by just 7% of the population. Clearly, the dominance of privately-educated CEOs underwrites the predominance of a certain class, and disenfranchises all those ‘not in the club’. The Hampton-Alexander Review 3, which monitors the gender balance in over 20,000 senior leadership positions in FTSE 350 companies, reports that women hold just 29% of leadership positions.
Worse, Diversity UK 4 reported that in 2019, Black, Asian and Minority Ethnic (BAME) directors were just 8% of the total, compared to 14% of the population, with only eight companies accounting for over 25% of all BAME directors. Those decades of anti-discrimination legislation have hardly made a dent towards better integration, not through lack of will, but through lack of deep understanding and a workable plan.
Damage to Employees’ Health and Wellbeing
One area that has been brought out of the shadows more clearly is the negative impact to employees’ health and wellbeing. A review by Perceived Discrimination and Health in the US 5 linked experiencing racial discrimination to smoking, and the correlation of workplace bullying and sexual harassment to heavy alcohol consumption as a typical coping mechanism.
Those living with discrimination also experienced an increase in cardiovascular illness, breast cancer, obesity and high blood pressure. The review also highlighted a huge impact on mental health and wellbeing, with employees experiencing depression, anxiety disorders, burnout and loss of control. All of which can lead to hostile or suicidal behavior.
Good Intentions: Blind Spots Hidden in the Shadows
One of the most damaging systems in the workplace can be a well-intentioned attempt to stimulate a sociable culture involving alcohol. Drunk colleagues can be the fodder of Christmas amusement, but it can also make those with caring responsibilities (often women) and teetotalers feel uncomfortable or excluded. If sporting competitions are the only social events, then many colleagues, including those with a disability, may also feel excluded.
Further, the failure of those staff to participate in these events means they might not find out what is happening in the company nor get encouragement from the ‘mates down the pub’. Feelings of exclusion from what is unofficially considered where ‘the real work gets done’ makes employees feel less engaged and like outsiders in their own workplace, discouraging them from staying in the company with a consequent loss of experience and talent.
So too can shadows lurk behind firing decisions, especially with older staff. The threat of redundancy may initially focus discrimination against older, more experienced staff because they add the most to the wage bill 6. But the capabilities, company knowledge and contacts that are lost with that staff member inflicts a damage to the company that is often impossible to calculate.
Conduct exit interviews and find out whether you have been a good employer, and the reasons why staff leave your company. Ensure that this data is reported to the board so the feedback can be acted on 7.
Objective: The Diversity Dividend
While progress towards diversity has been painfully slow, understanding of the benefits are becoming increasingly clear. In May 2020, McKinsey produced its Diversity Wins report 8, which looked at more than 1000 companies in 15 countries. They found that firms in the top quartile for women executives were 25% more likely to have above average profitability than those in the bottom quartile. The case for ethnic and cultural diversity was even more compelling, with those in the top quartile outperforming those in the bottom by 36%.
Diversity in the leadership of companies sets the tone for a more diverse organization, but directions from the top don’t simply stop the practices that prevent people progressing within an organization. Meaningful change requires effort, investment and a better understanding of the often complex and overlapping issues.
Audits and Transparency Aid Better Understanding
You can’t fix a problem until you thoroughly understand its nature and extent. One way to do that is to undertake an equal pay audit. You could also use data the company holds on gender, race, disability, sexuality and age, anonymously, to better gauge the extent of the problems in your workplace. The data will be patchy, but it will help to bring the issues out of the shadows and into a place where you can begin to formulate better action plans.
Diversity Audits 9 are another tool that can be used to understand how employees and other stakeholders perceive the organization’s diversity. Staff may be afraid to speak up unless they are ensured anonymity or that a professional independent party conducts the audit to ensure complete objectivity.
A longer-term objective should be to create an environment where employees are not worried about declaring information such as a disability, their sexual orientation or religious beliefs. In a survey titled ‘The Purple Workforce’ 10, law firm Leigh Day found that 47% of respondents did not feel confident disclosing a disability when applying for a job, and 26% didn’t feel supported after being employed. Staff must feel safe to reveal this information, confident that it won’t lead to discrimination, and understand how this data will help build a more diverse organization.
Which is why it will reinforce the benefits of undertaking such audits if you are transparent about the findings with your staff. It can be made a regular part of the appraisal cycle so both you and your staff can identify the issues and work collaboratively to fix them. Whole Foods were seen as inviting trouble when they began releasing regular reports to their staff about pay in the 1980s. But they have been very successful in fixing pay gaps, because it is not only the management but also the staff that identify issues and work towards solutions 11.
Virtue Signaling and Pink Washing
It is important to realize that the purpose of these audits is to shine a light onto where these issues lay in your corporation, a first step to guide your next steps and begin discussions on where and how you want to tackle the problems. The goal should be to include diversity and integration into the very fabric of your organization’s culture and to take serious steps, with your employees, to make it happen.
Recent attempts by some corporations to be seen to be tackling discrimination, without actually doing it, have backfired. For example, in light of the Black Lives Matter movement, many corporations jumped onto the bandwagon of diversity, with #BLM on every platform from LinkedIn to Twitter. But, diversity activists have already called out these companies for using the movement as a publicity stunt while not doing anything meaningful 12, known as virtue signaling.
Or Pink Washing, when every year during Pride Month, social media feeds are flooded with rainbows, with everything from rainbow sandwiches to t-shirts. Yet, many of the companies involved lack even the basic policies on LGBTQ+ issues, such as full partner-benefits, and are therefore showing support without practicing it 13.
Take a Holistic View
Taking a holistic view of the organization and the findings of any internal investigations or audits can help you draw up an action plan, with practical suggestions about change. One such practical, simple example is the Canadian government piloting “name blind” recruitment for their public service, with the practice of concealing a candidate's name to protect those with more ethnic-sounding names from conscious or unconscious bias during the hiring process 14.
To ensure that the action plan is implemented and leads to change, it should include all members of an organization, from the very top of the company down, with tasks assigned to individuals and regular reports and discussions at board level about progress. Another positive example from government is New Zealand’s Prime Minister Jacinda Ardern’s new cabinet, which includes 40% women, 25% Māori (two in five of those are women), 15% Pasifika (two in three are women), and 15% LGBTQ+ including the Deputy Prime Minister. These choices are a clear and transparent signal of the sort of country she wants to build 15.
Opportunities for Beneficial and Profitable Change
One of the key reasons women overall still earn 39.6% less than men is that they are significantly more likely to work part time than men (30.7% compared to just 8% of men) 16. Late nights and short weekends used to be the hallmarks of promotion hungry executives, but they were beyond reach for many working mothers and carers. Yet research has shown that companies with a large proportion of part-time and flexible working staff are actually more productive than those with more full-time staff 17. COVID-19 has accelerated change to remote working and now such conspicuous late-night overtime has become almost invisible.
The pandemic presents companies with other real opportunities to change the culture of workplaces, and some of the systems that have been holding them back. Remote working and greater use of online meetings are changing our behavior, and performance expectations are being amended accordingly. The decline of communal office work could also be an advantage to disabled workers, who may be able to play a more equal role from their home location.
Corporate away days can provide greater insight into untapped skills that people in your company possess. Try to spend time with colleagues on a completely different ‘playing field’, organize half-day workshops where most people start from the same baseline (without experience). It can lead to re-assessment of other people’s skills, mutual respect and even a little humility.
Getting back to the shopfloor can also be a really insightful experience for senior managers 18. Since many women and ethnic minorities are stuck in the bottom two quartiles of a company, it is an opportunity to better understand the skills and experience they could bring to a different part of the business. Brainstorming strategies have been found to be particularly effective for team members who identify as minorities 19. This can not only help innovation but also break down invisible barriers.
While the tag ‘We are an equal opportunity employer’ has been around for decades, reconsidering where and how you advertise 20 might help change the face of your company, as the usual places get the usual candidates.
A virtual interview is a two-sided coin, with both parties getting less information about background and personality, which could lead to narrower hiring criteria. On the other hand, many IT companies have started employing hackathons as a way to reach a larger pool for recruitment. These recruitment drives can not only help you find talent for more specific areas, but also widen your pool in terms of diversity 19. If you have already changed policies to include flexible working or job share possibilities, include that in your recruitment information.
Delivering Diversity Throughout the Corporation
Some budget should be reserved to support workers with disabilities, making reasonable adjustments to help them, and promote the availability of these resources, so that others can see your commitment to these workers.
Career development and further training should be open to all employees, and not only as perks, which encourages more diverse promotions internally. Also, company policy on parenting and partnership can have a huge impact on how women are retained and progress in an organization. Supporting new parents to take meaningful paid periods of maternity/parental leave is important, but extra effort to encourage mothers to return to work will still be needed. Who can forget the adorable pictures of the New Zealand Parliament Speaker cradling one of his colleague’s baby 21. If governments can do it, so can corporations. The pandemic has shown us that allowing workers to work flexibly, from home, at hours that suit them, doesn’t make them any less productive, and doesn’t prevent them from meaningfully engaging with colleagues. It does add to their overall sense of wellbeing.
A good way to improve the onboarding experience for new staff is to encourage mentoring by senior colleagues. Such relationships can help to transfer knowledge and culture in the organization and foster a more open environment where new employees feel comfortable and welcome.
A very controversial way to tackle discrimination is to use positive discrimination or quotas. Both are equally unpopular in certain areas and corporations, but they do work to ensure minimum levels of representation for identified minority groups within a company. Recent legislation has been passed in several countries setting quotas for (e.g.) women at board level 22, and have been shown to be successful in addressing under-representation 23. Even without making it a policy, discussing making it a goal signals intention.
Bring it Out into the Light
Finally, don’t duck the issue because it is large and complex, bring it out into the light, and most importantly, keep the discussion going. Communication shouldn’t be just a top-down process – although companies serious about tackling lack of diversity will get their CEOs to head up the work – but it should be facilitated at every level, giving everyone the reassurance that their input is valued. You can engage with trade unions (where present), consult with Diversity and Inclusion professionals, or facilitate staff forums that aren’t just talking shops but empowered to make clear action plans.
The process of affecting meaningful change isn’t quick, but it is achievable and ultimately leads to more creative, productive, profitable and happier organizations, and well worth coming out of the shadows.
Jenny has worked in the British trade union movement for more than 18 years, negotiating with employers in the public, private and third sectors. She currently specialises in equality focussed bargaining, working to address discrimination in pay and reward structures, and the impact of technology on workers.
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