The role of DEI and ESG in workforce planning
ESG cover the three key components of a company being a good corporate citizen. However, companies need to continue to transform their perception of DEI as a ‘cost’ to the business to build a truly inclusive environment, both internally and externally.
Forbes reports the views of Armando Azarlo, CEO at Axis Agency, who highlights that general recruitment marketing to everyone does not work when the new ‘general’ market is in fact ‘multicultural’ and wants to see different viewpoints and experiences embraced in the workplace. Employee listening is a useful tool to understand what current employees value about their workplace and its culture, that can be built into a wider employer brand campaign to attract and retain talent.
DEI agendas focused on being an inclusive employer can also help companies weather turbulent times. The Harvard Business Review highlights how adaptability, something they term as ‘change power’, is 80 per cent higher in companies that received the highest DEI scores from Glassdoor. Its research also highlights how purpose can be strengthened by greater diversity, pushing forward organisational change through greater internal engagement.
Externally, brands can differentiate themselves by engaging with their local and global communities. As vice president of DEI at NBC Universal Media, Sal Mendoza describes his role as business development, community engagement and building brand equity – directly by reflecting and engaging with the wider communities in which the business operates. We have heard this directly from customers in our HR Workshops, who say that they are trying to be more reflective of their communities and customers in the workplace when recruiting.
How DEI bolsters recruitment practices
Flexible working can hold the key to not only reducing commutes and supporting the environment, but also directly on the diversity of a workforce. The Behavioural Insights Team’s latest research found that offering part-time working or job share opportunities increased applicant pools by 50 per cent at John Lewis and increased applications from women to senior roles by 19 per cent at Zurich Insurance.
A focus on inclusivity can also ensure that recruiters do not unwittingly exclude good candidates. The research highlighted how women and ethnic minority candidates are less likely to apply if the requirements are broad. Instead of saying ‘you’re a natural leader’ in a job advert, ‘you have held line management responsibilities’ is more specific and might result in meaningful differences in how applicants respond.
Worryingly, business’ concerns about falling foul of ESG may be leading to increasing apathy about the pillars and the value they create for the business. According to our most recent UK Reward Management Survey, 65 per cent of employers have a diversity and inclusion plan and nine per cent do not have a plan. However, the Department for Work and Pensions’ Employer Survey 2022, polling 8,002 employers in Great Britain, highlighted that 20 per cent said they ‘see no benefits’ to having a diverse workforce.
Having a plan and executing one effectively are not synonymous; there has to be leadership buy-in that embeds the plan into actions and the wider culture. Crucially, two thirds of staff will quit if the employer does not share their values – which is growing more prevalent, particularly in younger generations who recognise the emotional connection of the work they do.
Furthermore, even though ESG and DEI are on the boardroom agenda, McKinsey has reported that while in some sectors 100 per cent of companies have a defined ESG strategy, only 40 per cent have the internal knowledge and resources to achieve the targets. Importantly, as ESG and DEI can be a broad church, making sure that each company’s role and impact on society reflects the initiatives it adopts will set it up for a sustainable approach that delivers long-term success, future-proofing organisations.
Get in touch
It is important that DEI and ESG are seen as the keys to sustainability planning that can weather the test of time, beyond HR and political trends. With reports that nearly half of businesses are not measuring the impact of their existing ESG efforts, many are calling for a more consistent, data-led approach across the issue. To drive momentum behind a company’s ESG agenda, data collection and analysis is crucial to effectively understand the difference an actionable plan is making.
Communication plans internally and externally to attract and retain talent inspired by a company’s efforts in this area will help organisations in their war for talent. Contact us today to help plan your total reward approach, with ESG and DEI factored into your plans for the future.