By Barbara Frankel
To evaluate the impact of global diversity efforts, we have investigated best practices that correlate to results, measured in increased human-capital diversity and business opportunity. Through 203 data submissions and extensive interviews with 25 companies, we have learned that diversity-and-inclusion initiatives have been mostly focused around gender, while efforts to include ethnic and religious minorities, people with disabilities and LGBT people are just beginning to surface.
We studied all global regions and found the most successful diversity-and-inclusion efforts in Europe, Asia and Central/South America. Virtually all start with initiatives aimed at women that emphasize local cultural values. We found direct correlations between companies that have initiatives for recruitment and talent-development programs for women and increased representation of women in the workplace, management and the senior-executive ranks. We also note correlations between D&I initiatives such as resource groups and mentoring, and increased female representation in management ranks.
Support from corporate and local leadership is especially critical when addressing other dimensions of diversity. Companies in every region with global diversity councils have made far more significant inroads in LGBT inclusion. And companies with regional diversity councils led by local business leaders are far more likely to implement supplier-diversity initiatives.
In this report, we will document which best practices are working through analytical data and case studies demonstrating results. All of the companies we have analyzed tell us these efforts are just beginning and they expect to see rapid advancement in their global diversity efforts and enhanced competition for talent.
I. Methodology: DiversityInc’s Global Diversity Research
This report relies on two years’ worth of data submissions, totaling 203 entries from 46 countries. The submissions represent nine industries—professional services, technology, consumer-packaged goods, pharmaceutical, chemical, manufacturing, auto, hospitality and medical devices. The questionnaire was designed to be culturally competent, capturing and codifying demographics (gender, age and locally underrepresented groups where reportable) as well as best practices (talent and leadership development, resource groups, diversity councils, supplier diversity).
Our thirteen 2012 sponsors helped us determine what best practices to examine locally and globally to implement initiatives with sustainable results. Our interviews, with an emphasis on talent development, leadership pipeline and resource groups for underrepresented groups, gave us perspective on what has worked for different companies in different countries/regions, and how they overcame challenges. The sponsors are: Accenture, BASF, Cigna, Dell, Deloitte Touche Tohmatsu Limited, Ernst & Young, General Motors, Merck & Co., Medtronic, Pfizer, PricewaterhouseCoopers, Sodexo and Wells Fargo.
Companies filled out the survey for each country they chose; most also provided information for headquarters. The survey continues to stay open. We add companies, countries and regions to our database with each new submission. The survey has approximately 100 questions and is divided into the following seven sections:
- General Information: Ascertains how long the diversity-and-inclusion initiative has existed, and how it is organized and staffed (full-time, part-time and volunteer).
- Headquarters: Assesses global diversity councils and global support and control of local diversity-and-inclusion initiatives.
- Leadership and Values: Examines what diversity and/or inclusion means locally, what the three biggest challenges/barriers facing successful D&I efforts in each country are, what type of internal diversity council has been established, the support of local business leaders, how D&I is integrated into the local business goals, what metrics are used to assess D&I success locally (i.e., what is the business case?), and how employee engagement is measured.
- Human Capital: Measures workforce, management and senior-management representation by gender, looks at the age of the workforce in each country, and probes whether the local organization has specific recruitment and leadership-development efforts for women and other underrepresented groups.
- Best Practices for Global Diversity: Looks at local efforts to implement global diversity strategies and initiatives that include resource groups, mentoring, training, outreach to LGBT people (where legally permissible), outreach to people with disabilities, work/life benefits (especially flexible workplaces), and website communications about D&I.
- Supplier Diversity: Studies whether local supplier diversity exists and, if so, what groups are targeted and what best practices are in place to support growth and impact.
II. Major Global Diversity Findings
Our findings show significant correlations between established best practices and human-capital results, primarily measured in recruitment and promotions of women. The data and interviews support specific and proven approaches to recruitment, leadership development,flexible workplaces, formal mentoring, resource groups, generational issues and global executive diversity councils. Full findings are available to global sponsors and global consulting clients.
- Companies with formal recruitment policies aimed at women reported dramatic increases in female representation in the workforce. For example, in India, companies with formal recruitment policies had one-third more women in the workforce.
- We note a significant increase in management opportunities and promotions for women in companies that have locally based leadership-development programs aimed specifically at women. In contrast, leadership programs targeted at underrepresented groups are scarce globally. For example, in Brazil, companies with leadership programs for women had almost four times as many women in management as companies without these programs; in Japan, the difference was sixfold.
- Almost all companies surveyed felt that flexibility in terms of hours and location is key to increasing retention, engagement and promotions of women and younger people in general. The degree of flexibility often depends on the local cultural role of women and how strong their home/family duties are. For example, in France, companies with flexible workplaces have almost double the percentage of women senior executives and a third more women in management. They also have double the amount of women in the workforce.
- While formal mentoring and sponsorship programs are just beginning to catch on in most of the world, their impact in areas where they have been in place is dramatic. For example, companies in Australia with formal mentoring had one-third more women executives than companies without.
- Global resource groups traditionally are aimed at women and focus almost exclusively on talent development, but we are beginning to see groups based on age, sexual orientation and, in a few cases, race/ethnicity. There are definite correlations between having groups and increased diversity in the workplace. For example, in the United Kingdom, companies with resource groups had 10 percent more women in management.
- Our research shows a vast difference in the age of workers in various countries, with many Asian countries having very young workforces and some European countries having older workforces. The issues facing them are very different and, therefore, require a variety of solutions. For example, more than half of the workforce of the countries in Asia are younger than 34.
- Global executive diversity councils are increasingly used to set D&I strategies for the organization, which then are filtered to local diversity councils for implementation. They show organizational consistency in values and subsequent messaging, which produces results in the global workplace. For example, in Europe, companies with global executive diversity councils are twice as likely to offer domestic-partner benefits in countries where they are legal and three times more likely to include sexual orientation in training. And companies with global executive diversity councils are also three times more likely to have regional councils to implement strategies. Supplier diversity is a good example of that: Companies with regional councils in Europe are twice as likely to have formal supplier-diversity outreach. (There is virtually no supplier diversity in Asia yet.)
Global Diversity Best Practice: Developing Female Talent in Australia: Can flexible workplace models and leadership programs provide measurable improvements in gender diversity? Read these case studies from Deloitte and Ernst & Young.
Global Diversity Best Practice: Flexible Workplaces in India: Global companies must combat a “leaky pipeline” of women talent, but these best practices from Sodexo, Merck, Dell and Deloitte can improve retention.
2 European Case Studies: People With Disabilities & Ethnic Minorities: How are Sodexo and Merck recruiting people from underrepresented groups in Europe?
Best Practice: IBM’s Global LGBT Support: How is IBM’s global commitment to the LGBT market reshaping its business advantage? It builds credibility and trust with clients—and increases revenue prospects.
III. Conclusions About Global Diversity
The direct link between diversity-management best practices and sustainable human-capital results is clear from this research as well as from the interviews with executives around the globe. To highlight the key correlations:
- Companies with recruitment programs for women recruited 20 percent more women in Europe and Central/South America.
- Companies with leadership programs for women had 44 percent more women executives in Asia.
- Companies with flexible work arrangements had 34 percent more women executives in all areas studied.
- Companies with formal mentoring programs had 12 percent more women in Central/South America.
- Companies with global diversity councils were twice as likely to have global LGBT efforts in all regions.
- Companies with regional diversity councils led by local country executives were four times more likely to have supplier-diversity programs in Europe and Asia.
The best practices the companies have detailed for us, and which still are evolving, increase representation, engagement, productivity and marketplace connections. However, the research shows they work most effectively when specifically tailored to local cultural norms and when there is support from both global headquarters and local leadership. There are demographic differences between regions, which we note in this research, such as the much younger workforce in Asia and older workforce in Europe. There are also varying standards on women’s roles in and out of the home, inclusion of LGBT people, the need for proactive efforts to include people with disabilities, and the importance of supplier diversity.
Global diversity is evolving at different paces in various regions and countries, but all participating companies agree to its increasing importance in having an engaged workforce that relates to the local population.
Our consulting practice can help build your global diversity initiative and successfully implement it on a local level. This service includes: Making the business case to local leadership; in-depth assessment of organization/current initiatives; roadmaps and specific plans of action; situational analysis; written and verbal debriefs. Our next round of global research will start in the spring of 2013, and will focus on increasing our knowledge database, especially in emerging-market countries where there is significant business-growth potential. Sponsors will be able to shape the best practices we study and will receive data analysis of their submissions compared to the competitive set. For more information on consulting and research sponsorship, contact email@example.com.