Compliance | Culture | Diversity & Inclusion
Compliance, Culture, and Competitive Advantage: Finding Opportunities with Equity, Diversity, and Inclusion
“When women and girls rise, their communities and their countries rise with them.” These powerful words from Michelle Obama remind us why it’s so important for business leaders to take available opportunities such as International Women’s Day, to acknowledge not just women in the workplace, but all aspects of equity, diversity, and inclusion. Each an essential element in the creation of a strong business landscape.
The discussion around equity, diversity and inclusion, which I’ll refer to as “ED&I”, also opens a chance for us to assess some of the obstacles and opportunities companies encounter on their path to success, including a competitive hiring market, a continuous stream of employer-related rules and regulations to navigate and, for small and medium size businesses (SMBs), the challenges of competing with the deep pockets of larger companies for a limited pool of skilled workers.
International Women’s Day presented a timely opportunity to address ED&I more generally, because, as Kimberle Crenshaw has famously said, “if you're standing in the path of multiple forms of exclusion, you're likely to get hit by both.”1 The overlap of different aspects of inequality and bias create several opportunities to improve our businesses, and singular focus on just gender can ignore those opportunities. Because of this, the ED&I guidance in this post includes consideration of all categories protected by the U.S. Equal Employment Opportunity Commission (EEOC).2
The rest of this post will address how businesses can facilitate ED&I in their organizations as they work to build a sustainable, enduring company. I’ll refer to “the three C’s”: compliance, culture and competitive advantage, and how to create a business where ED&I can flourish.
ED&I is vital to HR COMPLIANCE
Maintaining compliance with employer-related laws and regulations is not just the law, it’s also the right thing to do. The negative impact of non-compliance can have enormous impact on even the strongest business. One only has to look to the #MeToo movement or recent media stories of harassment and racism streaming out of corporate environments to see how rapidly a lack of ED&I infrastructure and commitment can lead to devastating compliance issues.
For this reason, I believe that building a culture of ED&I inside your business is no longer a “nice to have” but rather, a must-have. Employment-related regulatory environment is flourishing, and ED&I-related regulations seem poised to only have a larger influence on companies in the future. Businesses can and should do better than simply meeting the low bar of ED&I legal requirements.
For example, startups should ingrain diversity into their foundational DNA and established companies would do well to consider their ED&I practices, being prepared to make systemic and cultural changes where needed. A few elements to consider are:
- Review for pay gaps: There are equal pay laws on the books at the federal and state levels that are designed to eliminate wage disparity based on sex. It is important to follow these laws, many of which include specific guidelines for pay scales and inquiries on past salary history. It is important that companies know the laws that affect them and make equitable compensation practices a priority.
- Take anti-harassment measures: It should be obvious why a workplace free of sexual (or any other type) of harassment is vital to a company’s HR compliance and their overall chance of long-term success. The EEOC provides guidelines on what constitutes sexual harassment and many states require that employers provide periodic harassment training.
- Become familiar with new and developing laws affecting equity and diversity, including anti-discrimination training requirements and evolving EEOC and state requirements. This includes laws dealing with nuances around gender identity and gender expression.
- Hire professionals who can provide expert guidance in risk mitigation to help, whether from a professional employer organization like TriNet, an internal HR team. or elsewhere. The ever-increasing (and ever-changing) number of employee-related laws at the federal, state and local levels, coupled with the damaging effects that result from non-compliance with those laws, makes the investment in ED&I measures a good ROI for businesses of every size.
- Consider evaluating what unconscious biases may be present across your organization related to hiring, development opportunities, and career advancements.
Integrating ED&I into the company CULTURE
Inclusion is a key component of a safe, tolerant and compliant workplace. The concept of inclusion is one that is defined by researchers in different ways, some focused on the value of difference, and others emphasizing finding common ground. Research from Catalyst reveals two key ingredients to effective inclusion: uniqueness and belonging. When employees are recognized for their differences and also feel a sense of belonging based on shared common attributes and goals, businesses are best set up to experience the benefit of workforce diversity3 . Company cultures that not only welcome but actively celebrate ED&I tend to be places where bullying, discrimination and harassment of any type are not tolerated and do not gain root. Additionally, actively pursuing ED&I in your company culture can have a direct, positive impact on talent recruitment and retention, innovation and, ultimately, business success.
In addition to the compliance guidelines shared above, the following areas provide some golden opportunities for SMBs to integrate diversity measures into their company culture.
Recruitment practices: Often, a lack of creativity and a bias toward inertia result in unsuccessful recruiting of colleagues from diverse backgrounds and experiences.
- What is your hiring strategy – experienced hire or emerging talent?
- Hiring an experienced candidate with a diverse background is the most competitive of all recruiting practices with companies looking to make an immediate impact on their ED&I program. I would encourage SMBs to think about this strategy as it is competitive and costly with diverse talent in high demand.
- Emerging talent strategies can give SMBs access to a continuous flow of talent who you can hire, nurture and grow, building an organic approach to diversity. You could consider leveraging a platform such as DiverseEducation.com to focus your recruiting efforts on a particular school or schools that confer the most degrees to minority students. Even if you are not recruiting for a recent graduate these schools will have alumni networks which can further add to your talent communities.
- How do you assess candidates?
- As you begin the journey to a more diverse workforce and inclusive culture, adjusting your sourcing strategy is critical. Even more critical is ensuring your internal mechanisms for assessing and validating your sourcing of talent is set up for success. Educate your interviewers on best practices, unconscious bias, and what it means to exemplify and practice ED&I behaviors in the workplace. Diverse interview panels help with broader thinking and give under-represented talent pools a better chance of demonstrating skills and capabilities.
- How do you onboard candidates to make them feel included, give a sense of belonging and ability to contribute using their unique strengths?
- You are seeking employees with different backgrounds, perspectives, life experiences, and skills to have a wider range of capabilities and impact across the organization. You want to create an environment where everyone feels a sense of belonging. Inclusive cultures are those that celebrate each individual’s unique characteristics and contributions. Modern organizations should regard inclusion as a business imperative and promote employee resource groups, training on topics such as respect at work and unconscious bias, recognition programs, and specifically acknowledging leaders that focus on ED&I and contribute to the community in a way that reflects and honors the diversity of the communities in which we live and work.
- Additionally, do not underestimate the power of your current workforce to help spread the word on open positions. Current employees are often a company’s best ambassadors. And as a bonus, the more diverse the workforce, the better equipped the company is to continue to attract diversity.
Benefits: An SMB’s ability to provide comprehensive employee benefits can, of course, help attract top talent, especially in a tight labor market. While traditional benefits such as healthcare, retirement and disability insurance can have universal appeal, companies can differentiate themselves among diverse talent pools by considering benefits like paid parental leave, educational benefits, pet insurance, remote work options, flexible scheduling, commuter benefits, onsite childcare, facilitating the shipping of breast milk, volunteer time off, and a host of other possible options.
In addition to helping employers stand out from the competition, a rich benefits package can go a long way to showing employees you value them as people, which can help drive employee engagement and encourage retention.
Encourage employee input and demonstrate trust: One of the best benefits of having a diverse company culture is that diverse people with diverse backgrounds and diverse experiences come with unique viewpoints. Once an organization lays the foundation of ED&I, the next step is to set the stage for ideas and innovation to flourish. Employers can do this by giving employees ample opportunity, support, and a “judgment-free zone” to contribute their thoughts or concerns and ask questions. These opportunities include:
- Open-door policies where employees feel comfortable coming to business leaders throughout the organization,
- Town hall-type meetings where group discussion is encouraged, and
- Suggestion boxes/online portals for those who want to contribute their thoughts anonymously.
Practice inclusion on a daily basis: A strong company culture is continuously built in a number of fundamental ways. Employers who want to create a culture of ED&I can do this every day by:
- Encouraging all attendees to share their thoughts in meetings.
- Respecting all forms of gender expression, including using pronouns preferred by employees and making sure dress codes are flexible enough to allow employees to dress in accordance with their own gender identity and expression
- Providing professional growth and developmental opportunities equally to all employees who are interested – and ensuring those opportunities are widely communicated, practiced, and made available throughout the organization
- Respecting employees’ practice and recognition of religious and cultural holidays and acknowledging and speaking about these important events
- Acknowledging and celebrating differences
- Avoiding use of culturally or socio economically specific metaphors that may not be universally understood; as an example, if an Australian leader used the term ‘sticky wicket’ or ‘let it through to the keeper’ it’s likely that an American audience may not understand those terms and as a result could feel excluded from the conversation.
- Offering a wide variety of benefits that speak to the needs of all employees, even those you don’t have yet!
ED&I as a COMPETITIVE advantage
Hopefully by this point it is evident that a company that is compliant with employer-related laws and regulations, and has a diverse base of loyal employees who are and know that they are respected as individuals and free to contribute ideas, will be that much better positioned for success. Finding a causal relationship between ED&I and financial performance is challenging with regard to large organizations, however recent research from Harvard Business School found that in the venture capital industry diversity improved profitable investments at the individual portfolio-company level and overall fund returns4 . It’s also worth mentioning that not only are ED&I measures important for recruitment and retention, but a diverse employee base can also help attract loyal customers.
ED&I is not just a trend. It is becoming increasingly vital for many companies to incorporate diversity into their businesses. For instance, by the end of 2019, all publicly traded companies in California will be required to have at least one woman on their boards of directors. By 2021, that number will increase. We expect to see more inclusive regulations popping up around the nation.
The reasoning behind the push for diverse representation at the top levels of business is important—with a diverse representation in leadership roles, the correlative result is an increase in practices and policies that benefit these groups, which leads to increased success. This helps build stronger, more enduring organizations and, as Michelle Obama said so eloquently, ultimately fuels economic growth for everyone.
Many incredible TriNet colleagues contributed thoughts for this post. They Include: Althea Bovell, Boyd Rogers, Bruna Moura, Cathy Manginelli, Fatima Afzal, Ganesh Sundaresan, Grant Weinberg, Helen Hong, Joel Smith, Kathleen Nolan, Kim Runyen, Kristine Gunn, Madhuri Nemali, Mathew Thomas and Trina Walker.
If you want to read more, particularly about intersectionality and the considerations of intersectional feminism, I encourage you to seek out the work of:
Kimberle Williams Crenshaw
Please reach out to me directly on LinkedIn if this post has provoked thought for you.
1Crenshaw, K. (n.d.). The urgency of intersectionality. Speech presented at TEDWomen 2016. Retrieved from https://www.ted.com/talks/kimberle_crenshaw_the_urgency_of_intersectionality?language=en
2The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information.
3Prime, J., & Salib, E. R. (n.d.). Report: Inclusive Leadership: The View From Six Countries. Retrieved from https://www.catalyst.org/research/inclusive-leadership-the-view-from-six-countries/
4Gompers, P., & Kovvali, S. (2018, July 09). The Other Diversity Dividend. Retrieved from https://hbr.org/2018/07/the-other-diversity-dividend
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