Inclusion: Transitioning from Buzzword to Corporate Imperative

Have you ever seen the meme of the dog calmly sipping coffee at a table while the room is engulfed in flames, muttering, "This is fine"? That comes to my mind whenever I see someone dismiss the necessity of diversity, equity, and inclusion initiatives.

The reality is, things are not fine. In this post, let's take a deeper look at the state of DE&I in the workplace, acknowledging the progress made and the challenges that persist.

The progress we’ve made

To name a few, women's labor force participation is at record highs following the drop from the COVID-19 pandemic, boards are becoming more racially and ethnically diverse, and more and more companies are adopting inclusive hiring practices.

All commendable steps toward a fairer workplace.

Persistent Challenges

Not to devalue that substantial progress, however, women still face a wage gap that widens with age, individuals with “diverse sounding names” continue to face discrimination when it comes to hiring (Leonard, 2018), and microaggressions and bias in the workplace occur on a daily basis. Now, my intention is not to come off as “woke” or even so pessimistic, because the reality is that none of those things are going to cause an organization to become bankrupt.

Best case scenario, they have the potential to impact certain groups of employees, causing some to become disengaged, followed by a loss of performance, and later turnover. At worst, they can lead to a court case that results in some bad PR and fines. Both the best and worst-case scenarios however, do have a significant impact on an organization's financial performance, overall productivity, and not to mention the well-being of individuals. Unfortunately, unless they are extreme cases, they are often just too difficult to quantify and correlate to specific financial losses.

But let’s get real for a minute… What's the real cost of exclusion? Even top talent can lose motivation if they feel their company doesn’t actually take into consideration everyone’s perspectives, are not challenged enough in their work, or if the purpose of their role within the context of the entire organization is unclear. Lack of inclusion can cause employees to feel disconnected and become disengaged.

Disengaged employees soon become unhappy with their work and/or employer. They no longer exude any extra effort, enthusiasm, or support for the team. They become complacent and noticeably withdraw from the organization.

The detrimental effects of employee disengagement on an organization's financial performance are typically reflected in higher absence rates.

According to “Absenteeism: The Bottom-Line Killer,” unscheduled absenteeism is estimated to cost around $3,600 per year for every hourly worker and roughly $2,650 each year per salaried employee (White paper, 2005).

Consistent disengagement and absenteeism quickly lead to a drop in performance. While some disengaged employees can sustain performance through project ownership or inspiration from their personal work ethic, they’re generally the exception and not the rule in exclusive environments.

A decline in employee performance directly and significantly affects the overall performance of the business.

Involved employees have clear roles and tasks, easily and effectively collaborate with others when necessary, meet deadlines, produce quality work, build and promote the brand, make sales and ensure positive customer interactions.

Employees who are not engaged underperform, generate less output, and are not contributing their best efforts to the achievement of the company’s goals.

This loss of performance can easily become apparent to customers, which can cause them to seek products or services elsewhere if they feel a company is not eager enough to meet their needs or experience bad customer service.

Employees who have been disengaged over a long period of time are either let go, or eventually seek out other employment opportunities on their own in which they feel they will be able to add value.

High turnover rates serve as an indication that there is a lack of inclusion or utilization of talent within an organization.

Turnover has a significant cost for organizations, considering recruitment and on-boarding expenses in addition to the loss of skills, competencies, and experience of previous talent. It’s estimated to cost an average of 6 to 9 months of an employee’s salary to replace them

(“The Cost of Replacing an Employee,” 2016).

High turnover will eventually lead to negative employee ratings in public forums. These are red flags that can create a negative perception among potential candidates, dissuading top talents from applying to the organization.

All of this to say, billions of dollars are lost every year by organizations due to uncivil behavior between employees. The result is lost productivity, delayed or failed projects, high employee turnover and lofty consulting bills that were necessary to facilitate collaboration in teams.

The combined effect of bias and exclusive behavior creates a detrimental cycle that only compounds and stifles business potential.

Why Inclusion matters more than ever

In today's ever-changing business landscape, technology is reshaping how business is conducted. Many organizations are now facing the need for innovation, which will either involve acquiring entirely new talent or upskilling their current employees.

Either way, organizations need innovative, agile employees who can adapt, collaborate effectively, and feel empowered to try new things as well as to fail fast.

For that to happen, they need to be led by compassionate leaders who understand their employees and are able to harness employees' full potential.

Gone are the days where your company can hire the trendy consultant, armed with their treasure trove of sticky notes and markers, to orchestrate a day of design thinking, and magically bestow upon everyone the aura of innovation. Internal innovation efforts within corporations such as hackathons, accelerators and incubators alone have not proven successful enough in improving performance long term.

Companies can no longer afford to not work together effectively.

While minor employee issues may seem inconsequential now, it's time to evaluate your organization's true connection with employees and dismantle any collaboration barriers that hinder the full realization of diversity's value.

Inclusion is not just a buzzword; it's an imperative for success in the evolving business world.

It's time to acknowledge the real cost of exclusion and take meaningful action to build a more inclusive workplace.

If you're eager to delve deeper into the root causes of exclusion and discover practical strategies for change, consider picking up a copy of my latest book, Beyond Comfort Zones: The Real-Talk Approach to Diversity, Equity, and Inclusion.

In a rapidly changing business landscape, the time to act is now. Inclusion isn't just a choice; it's the cornerstone of future success. Let's together create workplaces where everyone's voice matters and innovation knows no bounds.

Sources Cited:

Leonard, B. (2018, April 11). Study suggests bias against “Black” names on resumes. SHRM. https://www.shrm.org/hr-today/news/hr-magazine/pages/0203hrnews2.aspx.

White paper: Absenteeism - The bottom line killer. (2005). CIRCADIAN® White Paper, https://www.circadian.com/white-paper-absenteeism.

The cost of replacing an employee and the role of financial wellness. (2016, January 15). https://www.enrich.org/blog/The-true-cost-of-employee-turnover-financial-wellness-enrich#:~:text=The%20Society%20for%20Human%20Resource,in%20recruiting%20and%20training%20costs.