White Paper Organisational diversity: Much more than … Diversity and Inclusion.pdf · 2013-06-04 · White Paper Organisational diversity: Much more than numbers The Diversity

White Paper

Organisational diversity: Much more than numbers

The Diversity Debate

Getting diversity and inclusion on the agenda

The rapid growth and expansion of global organisations into emerging markets has created talent shortages throughout the Asia Pacific region. Legislative requirements coupled with social drivers across the globe have catapulted Diversity and Inclusion (D&I) initiatives up the leadership agenda – making it not only essential for strategic planning and competitive advantage, but also expected by both the market and employees if organisations want to attract and retain top talent.

There is still a long way to go before D&I initiatives are as commonplace as discussions of ‘growth strategy’, ‘profit and loss statements’ and the ‘need to innovate’. Across the globe, gender diversity is one of the main focus areas of organisations, with some now realising that merely getting the numbers right is not enough. True organisational diversity must foster inclusion throughout the ranks, bringing women in leadership to the forefront. Creating an inclusive environment where every employee can realise their full potential.

This white paper explores D&I initiatives that are becoming increasingly fundamental for organisations to be globally competitive.

Talent2 White Paper Organisational diversity is much more than numbers: The Diversity Debate

A diverse organisation is a smart organisationD&I strategy is essential for companies to be competitive on a global scale, with many crediting D&I for assisting them achieve their business objectives. In many studies, return on equity (ROE) and earnings before interest and taxes (EBIT) are on average significantly higher for companies that score highly for diversity (Forbes Insights, July 2011). Many businesses see D&I as critical for creativity and innovation, in addition to attracting and retaining key talent.

L’Oreal in the US has a formula for managing D&I:

DIVERSITY + INCLUSION = INNOVATION & SUCCESS® which is used in many functions across the organisation including recruitment, sales and community outreach (Forbes Insights, July 2011).

At AT&T in the US they credit D&I initiatives for successfully surviving multiple mergers and acquisitions, by making them resilient, creative and innovative when dealing with change (Forbes Insights, Jul 2011). Legislation and governance is further driving D&I around the world. Many companies have now implemented quotas and set hard targets to ensure they are compliant. Originating in North America and Europe, D&I strategies are becoming a top priority for companies wanting to reap the rewards of a diverse workforce in less mature markets in the Asia Pacific region.

2 / 3Talent2 White Paper Organisational diversity is much more than numbers: The Diversity Debate

Gender Diversity: the starting pointD&I has different drivers in different markets around the world, but gender is consistently the common theme globally. In more established markets like Europe and North America, social pressures and legislation have driven gender diversity initiatives. In some European countries, Governments have set binding quotas for women sitting on corporate boards or have introduced corporate governance codes in relation to females in senior positions. Norway, Sweden, France, Italy and Belgium are all examples of countries with these mandatory guidelines currently in place or to be introduced in the near future. In the US, it is common practice for executives to be given hard targets for gender diversity, and these are often tied to financial incentives for managers.

In the emerging markets of Asia, diversity is largely currently driven by business necessity, rather than imposed quotas. Rapid growth in these culturally diverse markets has resulted in the need for organisations to access untapped talent pools, not only to fill the talent void but also better mirror and serve a diverse client base.

Over 90% of companies surveyed on diversity in Australia, Japan and India, focus on gender (Mercer 2012). Similarly, of the 180 publicly listed companies surveyed in Europe, UK and the US, women are the main focus of diversity efforts (Forbes Insights, July 2012). Forbes indicates that 80% of companies in America focus on gender, 77% in the EMEA and 86% in Asia Pacific.

“Companies in Asia can’t afford to overlook underutilised talent pools.


Case study: Coca-ColaIn the Philippines, Coca-Cola is leveraging the power of inclusion in its business strategies to communities in which they work. This has provided local women with micro-finance so that they can start small road side stalls. These women are well networked in their local areas and are able to be independent business owners, whilst and at the same time sell Coca-Cola’s products to locals population. Coca-Cola sees women as the gatekeepers of products at home and the ones who sell products in the stores.

Women who are empowered and do revenue generating work spend their money on their families and in their communities, effectively giving back. In the Philippines, 70% of their earnings go to small, locally owned businesses and 80% of women manage these stores and seven out of every ten purchases are made by women. This is a matter of sustainability for business in the region (Guillermo Aponte, President and General Manager, Coca-Cola Philippines, Diversity and Inclusion in Asia Conference 2012).

Case study: Accenture In India, Accenture sees diversity programs as business critical to filling the talent gap but also to accelerate the dialogue and pace of change in the external market and environment. One of its key initiatives is VAAHINI, a networking forum for professional women launched in 2005 as the Accenture India Women’s Network.

It offers the opportunity for career women to share inspiring stories, exchange ideas, debate on thought-provoking subjects and develop leadership skills through interaction with industry leaders. In 2010, VAAHINI was opened up to Indian women outside Accenture through a virtual network and now includes over 32,000 female professionals across industries in India (Mercer, 2012).


“Gender diversity is the core focus for organisations globally.

Gender diversity has reached Malcolm Gladwell’s ‘tipping point’, the level at which the momentum for change becomes unstoppable (Ernst & Young, 2010). Gender is no longer a risk or compliance issue but essential for businesses who want to succeed (Ernst &Young, 2012). However, focusing on gender goes beyond numbers of women in the workforce. Women are still underrepresented at the senior level of business. They also tend to ‘self select out’, so the numbers decrease as they rise through the ranks of middle management. According to McKinsey in only 8% of companies surveyed do women hold more than 25% of the top jobs. In 2010, of the ASX 200 companies in Australia, 106 had no female board members.

Inflexible working environments, feeling unsupported to take on extra responsibility and the lack of female senior leaders to act as mentors are all contributing factors and often can be attributed to current achievers and high potential female talent leaving the workforce. Women will often feel they cannot commit to higher positions due to family commitments and will not put their hands up for promotion. Cultural reasons can also see women traditionally overlooked for management positions. It is important that companies recognise the factors holding back women in their organisation/region in order to overcome this inequality and create an accessible platform for all employees to achieve.

The quota debateIn terms of diversity measures, quotas are often feared in business. Many people see it as reverse discrimination and believe promotion should be performance based, not imposed. Quotas are often disguised as hard targets, goals and guidelines to avoid the backlash of the ‘Q’ word.

Bob Ellis, Chief Inclusion and Diversity Officer for ITT, says, “Concerning reverse discrimination, there is always that element. But the fact remains that most opportunities are filled by members of the majority group. Representation of women and minorities in higher positions is a fraction of their proportion of the population in general. The bottom line is that the person hired for the job has the qualifications. Diversity and Inclusion is about identifying and engaging talent based on a person’s experience and potential. We look at how we can grow that potential so that, over time, the individual can achieve his or her full potential within our organisation.”(SHRM, 2009 p24).

Using hard quantitative targets gives companies the tools to measure progress towards achieving diversity goals. Most companies with successful D&I programs tend to set numerical targets. While many companies have a D&I strategy in place, only a fraction of them feel that they have met their goals. Quotas are also inevitability discussed without a ‘use-by date’. Where in fact, quotas could be utilised for a period of time to achieve more balanced representation. These can then be removed once the behaviours have been created and expectations set and achieved.


Unconscious bias – myth or reality?Before you enact any strategic plans for D&I programs it is paramount that you understand the concept of unconscious bias and how to limit its impact on your D&I strategy. Everyone has unconscious bias; however the mistake most organisations make when setting D&I initiatives is that they neglect to take these into account for training. Before enacting any strategic D&I plan many organisations focus initial training on behavioural and mindset change.

At Freehills 12 months was spent on initial training concentrating on behavioural and mindset change (Deloittes 2011). They felt they had all the correct policies and procedures but without this initial training, the polices would never be enacted in a way that would allow their D&I goals to come to fruition. Awareness training is a way that business can overcome this hurdle on the D&I journey. It is important managers are aware of their biases, have the tools to change, and the want to change.

What can you do?

View D&I as strategic planningDiversity strategies have proven to give positive return on investment (ROI) for businesses taking their initiatives to the strategic level. Companies not seeing these initiatives through a strategic and competitive lens are not growing, innovating or profiting from diversity.

Set numerical targets to measure successAs discussed, for companies to ensure effectiveness of their D&I initiatives they need to have measurable targets to hit within specified timeframes. Companies can use financial incentives for managers to drive compliance and growth in diversity.

Flexibility is keyFlexibility is one of the most popular initiatives to help retain a diverse workforce. Flexible working arrangements allow women to pursue higher learning, for example, which for women, can often be the barrier to them seeking senior management positions. Flexibility also allows women with family commitments the ability to sustain work life balance and a demanding career. Annie Marie Slaughter, the first woman Director of Policy and Planning at the State Department in New York suggests companies set core working hours for being in the office but allow people the flexibility in the mornings and so they can attend to family commitments. Many employees and employers now prefer to negotiate core working hours and flexible working arrangements over salary raises. Alternatively governments can support flexibility and gender equality through tax incentives, paid parenting leave and assistance with child care.

A key reason for the female ‘brain drain’ from Australia to Asia is the access to affordable child care to allow them to pursue career opportunities. Domestic help is accessible and affordable and allows families to effectively manage their work and home commitments. Whereas in Australia working mothers often receive minimal financial return on their work after meeting the high costs and inflexible nature of child care solutions in Australia. The government should be in a position to review its foreign domestic worker policies to ensure they reflect the needs of the contemporary workforce and employment environment in Australia.



Women in the workforce and leadershipThere is still a considerable gap in Asia Pacific when it comes to women at executive levels. It is important that women are not only being recruited, but also retained and developed for senior leadership positions in your business. The first step is to make sure that your company is targeting female job seekers. Many companies recruit through national diversity employment fairs or advertise through media with a female readership base.

Retention of female talent can also pose a challenge for many organisations. Often women drop out due to family commitments, and/or their perceived lack of opportunity and access to equal salary and conditions, so it is important that women know they will be supported in higher positions to accommodate their outside commitments where possible. It is also important that young women have female leaders to be inspired by and aspire to. Finally, if you are serious about gender diversity in your business then it must be reflected at the most senior levels of your company.

» MentorsFemale managers who can guide young female talent through their development can be crucial to their success. At Volvo CE, the VP of HR created a workshop where female middle managers can spend time focusing on their career development through discussion forums with other women and senior female leaders present and offer mentoring to the attendees.

» Diversity from the top downAny successful D&I initiative must be fully backed by the senior leaders and these leaders must impress the importance of these initiatives. Only then can D&I strategies filter down and be taken seriously throughout the company. Senior leaders should set hard targets and celebrate diversity wins in the business.

» Make diversity a part of EVPTo attract, retain and develop diverse talent it is important that your D&I strategy becomes a part of your EVP. Many employers are able to sell their family friendly policies, and flexibility and mentoring initiatives when trying to attract top talent. Employees are no longer only looking for the highest salary package, the ability to advance in companies while still maintaining work life balance can be just as, if not more appealing too.


The answerGlobally diversity is driven by a multitude of factors but the essential drivers underpinning many of these strategies are the tangible benefits of diverse organisations. Innovation, creativity, competitiveness and ROI are all benefits organisations are reaping from diversity. In a time when your people are your greatest asset and your biggest differentiator, can you afford not to contemplate a diverse and inclusive workforce?

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About Talent2Talent2 is the leading Human Resources Business Process Outsourcing (HR BPO) and Managed Services organisation in the Asia Pacific region, delivering end-to-end talent management solutions that put People First. These include HR Advisory, Payroll, Recruitment, RPO and Learning.

Founded in 2003, Talent2 operates from over 40 offices providing services in 30 countries across Asia Pacific, Middle East, UK and USA.

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White Paper Organisational diversity: Much more than … Diversity and Inclusion.pdf · 2013-06-04 · White Paper Organisational diversity: Much more than numbers The Diversity