16 December 2024
Is DE&I nothing but a woke waste of money?
DE&I is becoming something of a minefield for organisations to tiptoe through. In corporate America it has emerged as an increasingly politicised hot potato, emblematic of the side of the political divide on which a company stands.
Robby Starbuck, a US conservative media influencer and self-proclaimed anti-DE&I activist, claims to have been instrumental in ‘forcing’ Walmart, Ford, John Deere, Boeing, Molson Coors, and Harley-Davidson, among others, to pull back on their programmes. While others, like Salesforce, Intel, American Express, and Workday have doubled down on theirs.
In the UK, Jeremy Hunt, in his last budget as Chancellor, earlier this year, targeted DE&I roles across the civil service in a headline-grabbing bid to reduce public spending. He withdrew £200 million from council budgets, questioning the value of diversity and inclusion roles (when only 0.02% of their annual spend could actually be attributed to such roles).
Only last week, the Church of England has been criticised for the percentage spend on DE&I when parishes are struggling to make ends meet.
And this is the rub: In challenging times, when confidence is low and costs need to be cut, initiatives like DE&I are the first for the chop. It is an easy cost-cutting target, but does it really make business sense?
A brief history
Following the death of George Floyd, in 2020, and the subsequent Black Lives Matter movement, corporate America was quick to jump on the inequality bandwagon. DE&I became the buzzword du jour. As CNN recently reflected: ‘Corporate leaders pledged to hire more people of color [Sic], removed branding perceived to be racist and invested in historically Black colleges. At the time, the efforts were largely met with public support, amid a so-called “racial reckoning” that laid bare a slew of systemic inequities in American society, including the workplace.’
However, the populist political mood has changed, and white Middle America has pushed back. DE&I hiring policies are being branded as a woke waste of money, positively discriminatory and, therefore, illegal. In praising a post arguing for DE&I to be ditched for an ME&I (Merit, Excellence & Intelligence) approach to America’s workforce, new Efficiency Tsar, Elon Musk stated recently that DE&I: ‘Discriminates on the basis of race, gender and many other factors’ stating that: ‘[It] is not merely immoral, it is also illegal.’
Equality v equity
Semantics are important. Does the ‘E’ in your DE&I policy stand for equality or equity? There is a distinction. Equality means you treat everyone in the same way, while equity means you create a level playing field. We would argue that the best hiring policies make reasonable adjustments for everyone to shine at interview.
Business does not exist in a vacuum
Where you sit in the debate, will determine what kind of company you want to be and what kind of company you are perceived to be. A pro-DE&I stance is a statement on social justice. In a world where customers and employees make choices in line with personal values, what values does your business stand for? Business leaders need to think of their organisations as a microcosm for the kind of world they want to live in because, even if they don’t, their customers and potential employees will.
Values-led and purpose-driven
The world’s best-performing companies share one key driver: a clearly defined purpose. Values-led, purpose-driven organisations are defined by their reason for existing. They seek to make a positive impact on the world around them, whether through environmental sustainability, social responsibility, technological innovation or improving the lives of their customers through their products and services. Hallmarks of a purpose-driven organisation are a focus on creating a positive workplace culture and fostering employee engagement and well-being.
As said, society is changing. Both consumers and employees want to support businesses that align with their values and contribute positively to society. Top talent and, crucially next-generation talent, seeks employers that provide a sense of purpose to their work.
Why DE&I is still important
A DE&I v ME&I recruitment-philosophy debate misses the point. For us, the argument is cultural. Where people – whatever their gender, race, social background, sexual orientation, neurodevelopmental status, disability, or religious beliefs – feel relaxed and confident to be themselves in the workplace, they will bring their best selves to work, realise their full potential and, therefore, be more productive and effective for the business. Successful, sustainable organisations are inclusive.
The bottom line is, we all need to become more sensitised to the needs of others in the workplace. The goal is to bring out the best in everyone. As such, we all need educating. Built from the ground up, DE&I is crucially important, in this respect. However, too many DE&I programmes pay mere lip-service and have been imposed, rather than worked out collaboratively through engagement with the workforce. As such, they have no genuine value.
What is your recruitment philosophy?
We recently wrote a LinkedIn post lamenting the 11% fall in the number of female executives in FTSE 250 companies, pointing readers towards a piece of insight we created on the widening gender gap in senior finance. A white middle-aged man immediately shot back with: ‘Hire based on qualifications!!!’ To which, we replied: ‘Of course! And expertise, track record, leadership style, emotional intelligence, cultural add... The question we're asking is, all things being equal, why is it the white middle-aged man usually gets the nod?’
For recruitment professionals and hiring managers, the goal is to create a fair and equitable process. This is important not only for legal compliance, but also to give candidates confidence in your process. This means putting your ‘gut feeling’ to one side and, as far as possible, eliminating subconscious bias and subjectivity.
Recruiters often talk about cultural ‘fit’ but, perhaps, cultural ‘add’ is a more appropriate description of what organisations need, especially when they’re looking to appoint to more senior roles.
When used as a reason not to hire someone, ‘cultural fit’ has become shorthand for ‘they don’t look, act or behave like us’, as if that is a bad thing.
Rather than looking for homogeneity, we would suggest organisations should be seeking complementarity. Diversity and difference are, after all, the hallmarks of innovative, productive teams.
Where people are involved, nothing is completely neutral. However good your recruitment processes, there will always be elements of unconscious bias and even discrimination.
For all the claims around sophisticated AI and customisation, candidate testing, for example, is often a ‘standardised’ and – depending on what sector you are in and what you are testing for – sometimes blunt tool. It is a numbers game, built around the responses of the neurotypical. As such, an over-reliance on any kind of digital screening process can run the risk of missing a neurodiverse gem of a talent, for example.
Is your organisation really a meritocracy?
We all appoint and promote on merit, don’t we!? It goes without saying, surely!? But what do we actually mean by Merit, Excellence & Intelligence? Faced with 50 CVs, are you jumping straight to the back page to see which school or university a candidate has attended or do you blind hire the best person for the job, intentionally hiding all candidates’ personal information in a bid to remove unconscious bias from the process? A bit like TV’s The Voice – where professional artists sit with their backs to the singers, judging them purely on the quality of their voices – the goal must be objectivity to ensure a true meritocracy.
The fact is, we live in an inequitable world. Your social background, the colour of your skin, whether you are born male or female, are neurodiverse etc., all impact your life opportunities. It is not an accident that two-thirds of our previous two Conservative cabinets were privately educated, perpetuating elitist self-interest.
Are you a business committed to creating an equitable, inclusive world or are you an organisation that is perpetuating the status quo? The sad reality is a break to raise young children sounds the death knell for any aspirations of attaining the summit in the careers of far too many women, for example. For all our DE&I programmes, they still earn at least 15% less on average than their male equivalents. And we wonder why some of our people are quiet quitting. The reality is, any individual being paid less for the same work as their colleagues, will inevitably feel undervalued, unmotivated and disengaged.
In brief
Unrepresentative, unchallenged decision-making by a homogeneous white middle-aged male leadership is stifling growth, innovation and creativity in the UK economy. Organisations need to have diverse and complementary voices around the senior decision-making table and workforces that are reflective of the communities in which they operate. As such, DE&I makes complete business sense.
While some right-leaning politicians and activists might claim DE&I is nothing more than a woke waste of money, it is well documented that diverse and inclusive organisations are more innovative and productive. Beyond the moral and regulatory imperatives, the business case is compelling.
DE&I is emblematic of a populist polarisation in society itself. Woke taunting aside, nailing your colours to the mast will be an increasingly powerful statement reflecting the side of the divide on which your organisation sits and, therefore, the kind of people your business will attract.
Will ME&I take over where DE&I is being dropped? Probably. However, Professor Emilio Castilla, working out of the Massachusetts Institute of Technology, wrote about the ‘paradox of meritocracy’, way back in 2010, his research demonstrating that organisations with intentional ME&I approaches to hiring perpetuate bias. For us, it’s not an either-or decision. DE&I hiring strategies look to remove bias and, therefore, ensure people are truly appointed on merit.
By ensuring a level playing field for all, a true DE&I strategy is against any form of discrimination, be it positive or negative, ensuring our businesses are diverse, equitable and inclusive and, therefore more productive and creative.
16 December 2024