How Diversity and Inclusion Drive Business Value and Profitability

by Christine Lewis | Aug 30, 2019 | Diversity & Inclusion

You may already know how valuable diversity and inclusion (D&I) are to the satisfaction of your workforce and to your recruitment efforts and ability to retain top talent. But did you know that these important considerations can also pay off financially? And that D&I efforts can have a significant impact on your workforce’s productivity?

Many Finance leaders are catching wind, as Deloitte’s 2019 CFO Signals survey showed that two-thirds of finance heads from large companies said they now have a form D&I strategy in place at their organizations.

So, aside from D&I being top priorities for businesses because of the ethical and moral implications, it helps to recognize that there are additional benefits for the business’ bottom-line as well. In this post we’ll take a look at what the research shows about how D&I can help financial professionals drive business value and profitability.

Driving the value of your business

It’s now becoming common knowledge that a more diverse and inclusive workforce means stronger organizational performance. This can be broken down into several categories, including retaining talent, employee satisfaction and well-being, and greater workforce productivity.

Retaining talent. Workplaces that focus on D&I efforts and take steps to make employees feel more welcome tend to retain talent better than those that don’t. For example, a report from the Human Rights Campaign Foundation showed that 1 in 4 LGBTQ workers have stayed at a company because of an accepting environment. And it makes sense—employees who feel unrecognized and excluded are more likely to be unhappy with their job and ultimately, they will leave.

Employee satisfaction. On a similar note, it’s important to emphasize that welcoming workplace environments foster more satisfied employees. Modern workers want to work in environments that not only don’t discriminate, but that also encourage openness about differences.

Gone are the days when biases and discrimination are the norms in offices. Instead, creating inclusive, diverse environments drive business value because employees will be more fulfilled by the work they’re doing. An employee survey from Deloitte showed that there is a strong correlation between employees being happy at work and feeling valued by their company.

Greater productivity. More diverse teams tend to be more productive as well. The combination of differing perspectives make efforts more creative, and can open the eyes of team members to views they wouldn’t be able to otherwise see themselves. With more diverse skillsets, experiences, and ideas, organizations can produce and create in more innovative ways.

Increasing Profitability

In addition to creating a more valuable workforce, D&I efforts have proven to contribute to increased profitability businesses as well. Research from McKinsey & Company shows that companies that have more racially and ethnically diverse workforces are 35% more likely to have greater financial returns than industry medians, and those with greater gender diversity are 15% more likely to see better returns.

McKinsey data also shows that in the U.S., for every 10% increase in ethnic and racial diversity on the executive team, annual company earnings rise roughly 1%.

A more recent study from Boston Consulting Group (BCG) shows that companies with above-average diversity on their leadership teams have a 20% advantage in revenue from innovative products and services for their companies over management teams with below-average diversity. These improved financial results come from the varying perspectives and insights that diverse teams bring to the table.

Effective strategies for addressing D&I in your organization

Clearly, there is a strong business case for a more intentional and thoughtful approach to D&I at your business. Aside from the fact that employees will be more satisfied and fulfilled, the business will likely perform better financially.

The strategies outlined below will help you get started with your D&I initiatives and sustain your program’s success in the long-term.

1. Make sure the strategy is known throughout the company

A good first step in addressing D&I is ensuring that the entire company knows about your efforts and that it matters to you and the entire executive team. Less than half of respondents in the Deloitte CFO Signals survey indicated that their D&I strategy is known throughout the company, so there’s still plenty of work to do in this area.

Start by sending around an email on these topics, initiating regular trainings related to D&I, or bringing up issues during company-wide, as well as departmental-wide, meetings.

2. Set up a measurement technique

As with any company strategy, a measurement process will hold you accountable and ensure that goals are being met. Try implementing things like regular employee surveys, and actually measure your diversity stats. Consider, who is underrepresented in each department’s management team? Gathering this data will help you to measure if your efforts are actually working, and you can update your strategy accordingly.

3. Update your hiring approach

These efforts go hand-in-hand with your HR department and the company’s hiring policies. First make sure that D&I is fully integrated into the employee handbook and other policy documents. This will make it clear to employees that it is a serious matter that is given priority at your business.

Then, make sure that hiring and interviewing techniques support these important policies. For example, what kind of questions are being asked on applications? Or in interviews? You must ensure that every employee the conducts interviews understands what type of interview questions are and are not acceptable, especially when considering sensitive D&I topics.

4. Don’t be afraid to admit fault

Finally, as the CFO or head of finance, you help set the example for much of the company. Part of being a genuine leader and exuding integrity is admitting when something isn’t where it needs to be.

This means that if a diversity goal isn’t being met—for example, if the company executive team includes solely older white males—you might admit that this is something the company is working on addressing to integrate more diverse perspectives. Then, you can show your workforce the strategies you’re putting in place to fix things. These tactics show departments across the board that you take D&I seriously and that you’re actually following through on promises.

Good leaders know when to discuss a challenge area instead of pretending like no areas for improvement exist.

Key takeaways

D&I continues to drive high performance and profits for companies across industries. As a financial leader within your organization, it’s important that you realize the value D&I brings to any team, in addition to the steps you can take to make it happen.

Remember:

• D&I helps increase business value by retaining talent, increasing employee satisfaction, and driving productivity.
• Your bottom line will thank you for your D&I efforts, as more diverse workforces and executive teams mean more revenue and increased business profitability.
• No matter the numbers, diverse perspectives bring invaluable expertise and viewpoints to teams to make them more creative and productive.
• Implement D&I into your strategy by:
  • Distributing knowledge throughout the company
  • Setting up ways to measure success
  • Updating your approach to hiring and interviewing
  • Admitting there are areas for improvement within the organization and creating a plan to improve these areas

In addition to these key takeaways, remember to always remain open to change and thus open to the broad range of perspectives that can exist within your company. This viewpoint alone will help you to give D&I the time and attention it deserves.

Launchways Client Tandem Fosters Diversity and Inclusion to Spur Innovation

by Carolyn Kick | Aug 22, 2019 | Diversity & Inclusion

Growing companies are increasingly turning to diversity and inclusion, or D&I, initiatives to fuel their success. People are the ultimate drivers of business success and having the widest range of perspectives available to tackle business challenges is an invaluable asset to companies of all sizes. But small-to-mid-sized businesses are particularly strongly defined by the makeup of their employees.

Many businesses have D&I policies and procedures as a matter of course and treat it as a compliance issue or silo it in HR. But others are starting to put the principles of diversity and inclusion at the heart of everything that they do. And they’re seeing real results. Recent studies show that greater gender and racial diversity each are directly correlated with increased profitability and value creation. And companies with the most women and minorities in leadership positions are between 20-30% more likely to achieve above-average financial performance.

One of the companies that have gone above and beyond in their D&I efforts is Launchways client Tandem, a consultancy that focuses on developing custom software solutions for growing businesses. We spoke to Tandem CEO, JC Grubbs, about how and why he has tried to foster diversity at his startup and how these efforts have contributed to his business’s phenomenal success. As it turns out, businesses looking for ways to stand out from competitors and fuel innovation within their organization have a lot to gain from the lessons that Tandem has learned.

Why D&I Is A Top Priority for Tandem

Before delving into the business advantages of having a more diverse and inclusive team, it’s worth spending some time to consider the moral forces that influence businesses like Tandem to focus so much effort into D&I. Generally speaking, many employers feel a moral responsibility to take care of the employees who dedicate so much of their time and energy to growing their company, and that includes making sure that all employees feel welcome and receive fair treatment regardless of their backgrounds or demographics. Diversity and genuine inclusion are important elements of the positive company culture that so many business leaders want to maintain.

For JC, though, his moral obligation to promote a diverse and inclusive workplace at Tandem goes beyond these general principles. As a member of the LGBTQ community who has experienced first-hand both inclusive and non-inclusive environments work environments, he sees it as his duty to make sure that everyone feels welcome and included at Tandem.

Beyond moral considerations, D&I is just good business for companies like Tandem. The studies showing how diversity contributes to profitability and value creation are grounded in business realities that JC has seen at his company. Since starting the company in 2011, he has seen how Tandem’s products and the ways that the company executes its work dramatically improve as the team becomes more diverse. As JC says, “It has happened over time but as I look at the way that we’ve run engagements with clients, I see a continual improvement in that. Part of that comes from learning and process improvement but I attribute a significant portion of that to our efforts in bringing more diverse voices to the table in how we deliver work to our clients.”

So how has JC built such a diverse and productive team? A lot of it has to do with the way that Tandem brands itself and crafts its company culture.

Importance of Employer Branding

Authentic branding should represent who you want to be as a company not just how you want to be seen. With that principle in mind, Tandem recently underwent a significant branding effort, including adopting the name Tandem in place of DevMynd, to put the principles of diversity, inclusion, and human connection at the very core of the brand. This new brand emphasizes the company’s focus on the human side of software development: getting as many diverse voices and perspectives involved as possible to create unique solutions that fuel innovation.

A significant part of the D&I branding effort has focused on how Tandem features their employees on their website. The “Team” page plays a much stronger role in the site than for most companies, and Tandem has done several things differently to foster a sense of diversity and inclusion. The first thing that visitors will probably notice is that the page isn’t organized with the C-Suite at the top and lower-ranked team members as you scroll down. Instead, everyone is mixed together with the CEO and COO right in the middle so that leadership at the center, rather than the top, of the company. And each employee profile features an in-depth bio that helps potential clients and employees get to know the team, plus three photos including one featuring the employee’s favorite hobby to further humanize the team members.

It’s hard to overemphasize the importance of employer branding and featuring employees so heavily on the website. In fact, according to JC, branding and highlighting his team members has been the number one contributor to the increase in diversity at Tandem. One of the first things that people from underrepresented communities look at when they’re considering a potential employer is what the team looks like. As JC puts it, “When they go to your site and see people who look like them and when they read their bios, they read things that feel like them, it immediately puts them in a different frame of mind in terms of how they view you as an employer.”

The benefits don’t stop at attracting diverse and talented employees, either. Another driver for Tandem’s focus on their Team page and D&I branding is to celebrate their success in that area and the success of their team. Small-to-mid-sized businesses are ultimately just a conglomeration of their employees and it’s important that both potential employees and clients see the people they’re going to be working with and get a sense of what voices are going to be in the room. This can not only lead to productive partnerships but also prevent damaging missteps as it can drive away employees or clients who aren’t a good fit. As far as Tandem is concerned, they don’t want to work with employees or clients who do not want to work with a team like theirs, so the more public they make their diversity the better.

Tailoring the Employee Benefits Package for D&I

But branding can only go so far; the real measure of a business’s diversity and inclusion is how they treat their employees. For growing businesses, especially in the tech field, who lack the resources to compete with major companies in terms of salaries and bonuses, this means tailoring their benefits packages to attract talent and build a diverse and inclusive team.

At Tandem, this started with a comprehensive and fully employer-paid insurance package that provides 100% coverage for employees and their families on all major health aspects: medical, dental, vision, and more. Just last year, they added a telehealth program so that employees can get access to medical advice more quickly and easily; a benefit that especially appeals to employees with children.

Tandem tailored its other benefits to accommodate people who have responsibilities that aren’t tied to work, such as being the caretaker for aging parents or being parents themselves. They implemented a flexible time policy that lets employees set their own schedule as long as they are in the office for core work hours from 10:00am-4:00, give employees the option of working remotely one day a week, and allow employees to work from home on other days whenever the need arises. Despite being too small to be required to offer maternity leave under FMLA, Tandem also offers 8 weeks of new-parent leave for natural births and adoptions, on top of standard PTO. Having that flexibility and making sure that the flexibility is integrated into company policies and processes is an important step to support a diverse set of outside of work needs; another key element of D&I.

Tandem isn’t ready to stop there, either. They are already exploring two new potential benefits to better foster diversity and inclusion: fertility and gender transition support benefits. While they are still looking into costs and proper structures and have not pulled the trigger yet, they believe that it is important to think ahead and look beyond traditional benefits to see what you can and should do to support a more diverse set of employee needs.

Ongoing D&I Efforts and Accountability

The final lesson that growing businesses can take away from Tandem’s D&I success is that diversity and inclusion is a constantly evolving process and that it is important to reevaluate current practices to see if you’re doing the right things and if are there new areas that you should explore. In fact, Tandem’s CEO went so far as to say, “If I had any advice for other growing businesses it would be that D&I is not a one-and-done, ‘check all the boxes’ and then move on type of issue: you need to reexamine it on a continuing basis.”

So what should growing businesses who are dedicated to promoting D&I do to monitor and reexamine their efforts? Tandem conducts bi-annual employee satisfaction surveys and the CEO has a one-on-one with every employee at least annually so that Tandem can be sure that it is maintaining its culture, that its employees feel engaged and included, and that any issues can be identified and corrected. JC also decided to create a Culture and Inclusion committee made up of a wide range of employees that meets every quarter to review current practices, discuss possible initiatives, and generally steer the direction of the company’s D&I efforts.

This committee has been central to the successful integration of D&I into Tandem’s brand and operations. It was responsible for raising the possibility of providing fertility and gender transition support benefits after it worked with Launchways to determine what the current insurance covered and what opportunities for improvement were left on the table. It also looks at the public face of the company to see if it is sending the types of signals to job candidates, such as reviewing job descriptions to see if they appropriately emphasize inclusion or use language that can be interpreted as exclusionary.

Tandem also recently completed an ADA study of their physical office space to get a sense of what they need to do to support people who need access to the building in different ways. And Tandem is planning on publicly releasing career paths, complete with requirements to move up to each position and salary ranges for every position, to encourage transparency and fairness both internally and for potential employees. This is significant, because transparency is absolutely vital to fostering true diversity and inclusion.

Key Takeaways

Every company is unique, and its approach diversity and inclusion should be as well. But Tandem provides a compelling model of how companies can put the principles of D&I at the heart of their employer brand, benefits strategy, and processes to build a diverse and innovative team. Hopefully, you can apply some of the lessons that Tandem has learned to fuel your business’s growth. Just remember that:
• In addition to being morally right, diversity and inclusion is just good business and results in increased profits and business results
• Your employer brand defines how potential employees and clients see you, so making sure that it aligns with and celebrates diversity and inclusion can help you build an innovative workforce and productive partnerships
• Benefits are often the most concrete tool that employers have to foster D&I by accommodating a wide range of employee needs
• D&I is an ongoing process that requires constant reevaluation, accountability, and transparency

If you are interested in hearing more stories about diversity and inclusion like Tandem’s and want to learn about D&I best practices, register for our D&I webinar coming up this October.

How Leaders Can Create an LGBTQ-Inclusive Workplace

by Jim Taylor | Jul 23, 2019 | Diversity & Inclusion

A Williams Institute study in 2018 found that 4.5% of the U.S. population self-reported identifying as LGBT (Lesbian, Gay, Bisexual, or Transgender). The real number is probably much higher, as diversity and inclusion expert Stephanie Huckel’s work suggests as many as 46% of LGBTQ professionals feel compelled to hide who they truly are in the workplace, which means any formal study probably skews quite low in terms of representation.

Any successful HR professional or C-suite executive knows that no team member, no matter how intelligent, focused, and driven can truly do their best work in an environment where they don’t feel safe to be themselves. Maximizing productivity and buy-in from LGBTQ employees and their allies requires creating an environment where people are valued and protected in a way that’s both inclusive and transcendent of their sexuality or gender identity.

Moving forward, we’ll explore:
• The unique legal position of LGBTQ professionals
• Why LGBTQ-inclusive policies build a stronger, better organization
• Some general guidance for creating LGBTQ-inclusive practices

Addressing the Additional Stress on LGBTQ Professionals

Gay, lesbian, bisexual, and transgender professionals have disproportionately felt the pain of discrimination in hiring, firing, and promotion scenarios and continue to deal with explicit or exclusionary workplace harassment, even as it has universally unacceptable to target other protected groups in similar ways.

Some HR leaders and organizations find it hard to understand why their policies and procedures need to contain explicit language about LGBTQ non-discrimination or contain specific guidance about potential issues like homophobic harassment or gender transition procedures. The unfortunate current state of affairs is that LGBTQ professionals receive only patchy, implied federal protections, which means that unless their employers take a strong, proactive, supportive stance, their employment status can feel extremely vulnerable.

Title VII of the Civil Rights Act protects individuals from gender or sex discrimination, but only conventional interpretation extends those protections beyond the definitions of “sex” and “gender” that were understood in 1964, when the law was written. While there have been efforts to expand the language of Title VII to create explicit protections for LGBTQ individuals, that work is currently stalled.

Those prevailing interpretations mean that LGBTQ professionals can file harassment or discrimination claims with the EEOC (Equal Employment Opportunities Commission), but that is a long, expensive process that often draws out the agony of harassment and can potentially negatively impact the victim’s future career prospects.

That inconsistent or just-implied federal support leaves an incredible spectrum of different professionals feeling like they have less agency and recourse in the workplace than their non-LGBTQ peers. With that said, almost half the states in the country have created laws that protect against gender identity and sexual orientation discrimination for both public and private workers.

• Western States with LGBTQ Workplace Discrimination Protections: Washington, Oregon, California, Nevada, Utah, Colorado, New Mexico

• Midwestern States with LGBTQ Workplace Discrimination Protections: Minnesota, Iowa, Illinois

• Eastern States with LGBTQ Workplace Discrimination Protections: Maine, New Hampshire, Vermont, Massachusetts, New York, Rhode Island, Connecticut, New Jersey, Maryland, Delaware, and Washington, D.C.

Businesses operating within any of those states are held to a reasonably high standard for LGBTQ inclusion, with a framework in place for wronged individuals to gain the protection of the court system and punish businesses for discriminatory practices or creating a culture of normalized harassment.

With that said, even in those states, the existence of a legal framework for recourse does not mean the non-existence of harassment or discrimination. Preventing those initial hurtful episodes still falls to each individual employer or workplace, and the businesses who master creating a fully-inclusive workplace will win over the trust and gain the ability to leverage the incredible skills of the LGBTQ workforce.

On the other hand, for LGBTQ citizens of the other 29 states, there is incredible need for either public or private protections. Some counties or cities have passed local non-discrimination laws to provide protections for their LGBTQ workforce and residents, but that means job hunting for many involves using a map of potential landing places that looks like Swiss cheese.

In areas where no public protections exist, LGBTQ professionals must rely on their employers to create, maintain, and enforce their own policies and procedures to prevent harassment and eliminate discrimination. Given both the historic struggles of the LGBTQ community and the historic struggles between employers and workers, it’s easy to see why many feel extremely cynical or insecure in that position.

With that said, businesses in those areas with no public protections who forge meaningful, inclusive policies that invite LGBTQ workers to be themselves, feel comfortable in their work space, and get powerful back-up from their employer have the opportunity to get first pick at an incredible pool of business-driving talent.

Why Proactively LGBTQ-Inclusive Policies Benefit Everyone

From an organizational perspective, LGBTQ inclusion is much bigger than the basic decency of protecting employees from discrimination and harassment. It’s about creating an environment where assessments of someone’s proficiency, abilities, and strengths or weaknesses are made based on performance data and demonstrated results, not assumptions. It’s about fostering a community where everybody’s insights, perspectives, and strengths are leveraged to the maximum through positive interdependence, shared goals, and empathy.

When businesses do that right, they set themselves up to win big in a few different ways. Let’s pause to explore how LGBTQ-inclusion is a matter of best practice.

It’s the Right Thing to Do
Profit has historically been valued above “doing the right thing” for businesses, especially large ones, but that’s starting to change culturally. In the current atmosphere, it’s more important than ever to consumers (and therefore the bottom line) that businesses operate in an inclusive manner.

Directly aligning a business or brand with strong, progressive values is no longer seen as a boat-shaking move that could scare off customers; on the contrary, numerous large businesses have seen themselves called out by consumers and advocacy groups in recent years for failing to articulate inclusive policies.

By being proactive about LGBTQ inclusion, a business shows their employees, prospective employees, investors, competitors, consumers, and the market in general that they’re concerned with talent, not exclusion.

Building Authentic Buy-In from Workers
Given the high percentage of LGBTQ workers who do not feel comfortable sharing their status in the workplace and the number of employees who do not report incidents in which they’re made to feel uncomfortable, it’s impossible to truly quantify how much productivity, innovation, and morale are lost each year due to inclusion gaps. With that said, any number is too high.

By creating a strong, supportive environment where inclusion feels like a true value and not just a legal concern, organizations can invite workers to feel both more invested and safer in a way that leads to better work and a healthier environment. When employers feel like allies and not just bosses, there’s more incentive to invest in the work and succeed together.

Equipping Leadership with the Tools to Solve Problems
When businesses aren’t proactive about policy, they often find themselves dealing with problems they don’t really have the tools to solve. On the other hand, proactive planning means that when a negative scenario (such as a problematic employee) does present itself, there is a procedure in place by which the problem can be handled and removed in a way that is richly-documented and will hold up in court.

Staying Ahead of Regulation
Depending on the outcomes of upcoming elections, significant increases in federal and local protections for LGBTQ professionals could be on the horizon. Businesses that have already articulated internal policies and created a strong, inclusive environment will be able to transition smoothly into whatever new framework might be created, while organizations that lagged behind get into dragged into accountability and regulation leave themselves vulnerable to potentially costly and reputation-damaging disasters.

In the world of business, it’s always important to be perceived as an innovator on the cutting edge. In the new talent marketplace and culture, being a human rights innovator is just as important as being a financial innovator. Inclusion is just one more way that a business can be ahead of the game in the quest to connect with talent and maximize organizational reputation.

Guidelines for Creating an LGBTQ-Inclusive Environment

Building a company that wins through inclusion requires long-term commitment, vision, and strategy, but here are a few tips to help guide organizations looking to articulate LGBTQ inclusion policies and procedures:

Policy creation
• Nomenclature: It’s important everybody in the workplace uses appropriate, professional terminology. Company policies should spell out acceptable and unacceptable terms and establish clear guidelines for workplace conversations. Furthermore, guidelines for appropriate pronoun use should be created and enforced for transgender and non-binary workers.
• Clearly articulated harassment/discrimination guidelines: As we said before, in order to create a strong, inclusive environment, businesses need to give themselves the tools to enforce the culture of inclusion and weed out bad apples in a richly documented, legally appropriate way.
-Reporting process – It’s not enough to say, “discrimination and harassment are bad;” it’s essential to have a well-organized, transparent, and trustworthy system that employees know how to use to report issues.
-Staffing for support – Policies need to be backed up by human faces who are dedicated to inclusion, equality, and building the best possible workplace culture. Working with a trusted HR partner such as Launchways can connect your team with actionable equality policies while mitigating the need for your business to hire an in-house support person.
• Ensuring there are no employee benefits gaps for LGBTQ professionals
-Comprehensive healthcare coverage that connects transgender, non-binary, or intersex professionals with the doctors they need is essential to keep the workforce healthy and provide equality.
-Transition support programs for transgender individuals must be available.
-Life insurance and other policies that account for non-binary identities and non-heteronormative concepts of family must be available.

Employee Training
• New Employee Orientation must introduce LGBTQ inclusion policies and hold hires accountable for knowing them.
• Allow for an evolving world by having a dedicated HR professional stay up to date on emerging themes and issues of LGBTQ inclusion and providing on-going professional development or training as needs are identified.
• Authenticity is required for employee education to really work. Meaningful role play and powerful, relevant speakers are required to make laggards take these issues seriously.
• Documentation of training creates a strong framework for accountability.

Fostering an Inclusive Culture
• Show organizational dedication to LGBTQ inclusion by adopting a relevant cause, raising money for a relevant charity, or raising awareness of LGBTQ issues in your local community.
• Create a welcoming, positive environment where people are treated as human beings with dignity and valuable assets with potential and skills.
• Make HR a driving force in pushing both leadership and rank-and-file workers to make inclusion, diversity, and LGBTQ rights key values.

Conclusion:

LGBTQ inclusion is one of the most important issues facing businesses in the current climate. In order to connect with and retain great talent, organizations must demonstrate their commitment to fully supporting each individual worker in their professional journey, regardless of their sexual orientation or gender identity. With potentially increased regulation looming, the businesses that are proactive will be the ones who articulate the best policies and align their corporate cultures with the winds of change.

Key Takeaways:

• LGBTQ professionals current receive patchy federal and state protection from workplace discrimination
-This can make the workplace a place of increased stress and anxiety, which means workers can’t be their best selves
• Regardless of local laws, businesses who proactively adopt LGBTQ-inclusive policies set themselves up to win with talent and build a future-facing organization
• Policies must be articulated clearly and explicitly designed with the needs, challenges, and support of LGBTQ professionals in mind in order to truly make a difference