World Economic Forum guide to improve diversity

World Economic Forum guide to improve diversity

Five factors to improve diversity, equity and inclusion are laid out in a report from World Economic Forum. Among them are to make employees participate but hold senior leadership accountable and to define KPI (key performance indicator) for the DEI process. The report says remote work has advantages but warns that it may contribute to creating an unequal playing field.

The DEI progress is slow. In the past five years, only one in three companies have made progress in executive-team diversity with some even reversing previous progress. The pandemic has caused a generational loss in gender parity, for example, increasing the projected time to reach global parity from 100 to 132 years. 

Technology is the listed sector with the highest percentage of women in senior leadership, according to the report called Diversity, Equity and Inclusion Lighthouses 2023.

The report lays out the five success factors that emerged from the Forum’s Lighthouse Programme:

  1.  A nuanced understanding of the root causes: Understand the problem with a deep fact base. Identify the root causes. Get input from the target population, initially and throughout. Prioritize and sequence problem areas.
  2.  A meaningful definition of success: Set clear and quantifiable aspirations (what and by when). Articulate a clear case for change that moves employees to action. 
  3.  Accountable and invested business leaders: Set initiative as a core business priority. Hold senior leaders accountable for outcomes, not just inputs or activities. Model and lead desired change, starting with the CEO and senior leaders. Ensure resources for longevity in the budget, expertise and timeline.
  4.  A solution designed for its specific context: Develop solutions that address the root causes, with scalability in mind. Integrate changes into key processes and ways of working, so impact is sustained. Equip and encourage employees to contribute.
  5.  Rigorous tracking and course correction: Define KPIs and implement rigorous tracking process. Use data and feedback to course-correct as needed.

From 2016 to 2022, globally, the proportion of women in leadership – director, vice-president, C-suite and partner-level employees – increased by only 3.6 percentage points, from 33.3% to 36.9%, the report shows. 

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“The proportion of women in senior leadership varies by industry, for example, in Technology (24%), Energy (20%), Manufacturing (19%) and Infrastructure (16%).20 The widening gap between DEI commitment and impact is not going unnoticed by employees, whose perspectives on leadership accountability for DEI efforts are predominantly negative.”

The resort says that in addition, broader trends have emerged that disproportionately affect employees from underrepresented backgrounds and identities: The pandemic has had ongoing impacts on DEI efforts: 27% of organizations temporarily put all or most of their DEI initiatives on hold because of the pandemic.

 “Since the beginning of the pandemic in the US, one in 10 people have experienced race and ethnicity based hostility and one in four have experienced gender-based harassment.”

 According to the Global Gender Gap Report 2022, gender parity in labour force participation dropped significantly between 2020 and 2022 in every region of the world, and currently stands at only 62.9%. 

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“There is a risk that such crisis effects will be perpetuated through longer-term labour market scarring. These uneven developments were partly a consequence of the sectoral composition of the shock and also the care burden that fell disproportionately on women as care infrastructures broke down during the pandemic.”

“In the US, both fathers and mothers saw reductions in labour-force participation at the peak of the pandemic, yet fathers had effectively recovered their labour market activity by November 2020, while mothers’ labour-force participation rate had recovered by a mere 0.1 percentage points and was still 2.8 percentage points below where it was in November 2019.” 

“Changes in workplace norms, including increased remote work, may amplify existing non-inclusive dynamics where DEI is not prioritized.”

“While remote work options may allow minority groups to better avoid workplace microaggressions, this work style can put certain employees at a disadvantage due to barriers such as limited space or broadband access. Remote work norms such as videoconferencing may also force employees to reveal aspects of their home lives that they would prefer to keep private.” 

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“While reducing barriers to the expansion of talent pools, remote work may contribute to creating an unequal playing field. More than 20% of the workforce can work as effectively remotely as in-person, yet these opportunities are concentrated among highly skilled and educated workers and are more available to those in higher-income positions.”

“Hybrid work is preferred by all employees, especially women, who are 10% more likely than men to leave their jobs if hybrid work is not available, but are 15% less likely to be in jobs that offer hybrid work.” 

There is an urgent need to step up collective and coordinated action by both private- and public sector leaders to avoid further backsliding and to create organizations and economies that offer opportunities for all. This will be a precondition to igniting truly inclusive and sustainable growth and fostering greater creativity and economic stability”, Kweilin Ellingrud, Senior Partner and Director, McKinsey Global Institute and Silja Baller Head, Diversity, Equity and Inclusion, World Economic Forum, write in the report.

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