Getting D&I right from day one is possible – here are five ways to do it

Article by Alexa Grellet, Co-Founder & Commercial Director at HR DataHub.

Covid-19 aside, it would be fair to say that the topic of diversity and inclusion (D&I) is one of the most talked about workplace issues of the last decade and something that is truly shaping our work cultures today.

Global consulting firm, McKinsey & Company, has demonstrated a direct correlation between employee diversity and financial performance. Specifically, that companies in the top quarter for racial and ethnic diversity are 35% more likely to generate higher returns. Likewise, a BCG study suggested that increasing the diversity of leadership teams leads to more and better innovation and improved financial performance. The results showed a significant correlation between the diversity of management teams and overall innovation. For instance, companies that reported above-average diversity on their management teams also reported innovation revenue that was 19% higher than that of companies with below-average leadership diversity (45% of total revenue versus just 26%.) Similarly The Boston Consulting Group and the Technical University of Munich found higher levels of diversity in management positions contributed to increased revenue from new products and services.

All these results point to the same conclusion; focusing on D&I is not only the morally right and good thing to do, rather it’s a business imperative.

But is getting D&I right merely the reserve of big business, or is it something that businesses of all sizes, should be thinking about?

Well interestingly smaller businesses stand to gain from diversity and inclusion initiatives just as much as large companies do. Not only does D&I incorporate the knowledge and experience of more demographics, but it also leads to more creative thinking, stronger innovative ideas internally and better decision making. It is also proven to aid recruitment and retention too. For instance, Glassdoor found that workplace diversity is an important factor for 76% of job seekers when evaluating employment opportunities.

Data aside, you can see why D&I initiatives tended to have been the focus of big business in the main. Larger businesses (in general) have bigger budgets, bigger HR teams, dedicated D&I experts, and of course they also feel those pressures from their boards, stakeholders and their customers to deliver on their ESG agenda.

Smaller companies, on the other hand, tend to be focused on scaling their journey, with some only concentrating on the here and now and a fair few, quite understandably, struggling to survive as a result of the pandemic. As such, it is often the case that early-stage founders have neither the budget, nor the people power to put their time and effort into thinking about D&I with so many other considerations competing for attention.

However, I believe that early-stage founders hold a unique position as change agents. They are innovative, agile, and they have the mindset to change the world too. They can change the workplace for the better, adapt working cultures to become more inclusive, and change the world we live in, in a truly profound way.

Here are five ways they can do this from day one:

1. Mindset: Let’s be frank here, getting D&I right is always going to be tough work and it will take an ongoing commitment from everyone. There is no magic pill here that one can just take and then a perfectly formed D&I strategy will flow; rather it’s a delicate balance that is hard to strike, and one that requires intentionality above all else. The key here is to make sure that diversity and inclusion is in the business DNA from the start, rather than an afterthought that can be corrected later. D&I is more than just “who you hire”. It’s about the culture that is created within the business.
2. Knowledge: A leader will need to dedicate time to educate themselves about the various topics and opinions so that they can be well informed and intentional about all the dynamics at play in the D&I space for their sector. But education around D&I has never been more readily available. There are numerous experts sharing their advice and knowledge online, on social media and at networking events for free daily. Moreover, they will also need to look inwards too; understanding their background and identifying any biases they may have. Ultimately the quality of the work they do on their own perceptions will be directly linked to their ability to create a healthily diverse and inclusive team.
3. Culture: Leaders will need to cultivate empathy and trust. Given D&I needs to be weaved tightly into the very culture and fabric of the business, employees must believe in what their leaders articulate and must see D&I principles represented in both the smallest and the biggest of ways. Employees will need to trust that sharing who they are at work is genuinely valued and respected or they won’t open up and any trust will be lost. Leading by example goes a long way here too; leaders must ask (and truly listen) to feedback and create opportunities to celebrate and support diversity in all its forms.
4. Recruitment: Four words stand out here; language, reach, process and feedback. Recruiting the right team is one of the most important jobs for early-stage founders. It’s the perfect opportunity to road-test the company’s commitment to D&I. To do this they will need to start by crafting the job description by using inclusive language. Next, they will need to check how far they are reaching to find talent. There are plenty of dedicated spaces to help businesses look for diverse talent. They will then need to build a process that enables every member of the team to be checked for bias. This may mean having many different people interview candidates, sharing feedback with them at every stage of the process and looking for ‘complementarity’ rather than ‘fit’.
5. Data: A small team certainly won’t have the budget for a fancy HR system to capture data about how it recruits and manages their people, and frankly they just don’t need it either. In actual fact the priority here is just getting organised. Early-stage founders will need to create a spreadsheet, gain greater visibility on the initiatives they are putting in place to support diversity, and track if they are having an impact. They should track everything from demographics and salaries, to policies and benefits. At the end of the day, data doesn’t lie. Looking at the numbers closely will help the business stay on track and improve its D&I strategy longer term.

We believe that early-stage founders can build diversity and inclusion into their company from the ground up. Key to doing this though will be them understanding why diversity and inclusion is actually important to their business. It may be that they believe that having a diverse and inclusive workforce will help them to better understand their customers for instance; or it could be that they believe diverse and inclusive teams work better together; it may be that they believe that diverse teams are better at team problem-solving; or because it will ensure a stronger culture, so people stay with the business long term; or it could be because they want to attract more diverse candidates. In all likelihood, though, it will be all of these things.

Of course, we know early-stage founders have so many aspects competing for their attention, but putting the time and energy upfront into building D&I into the very fabric of their being will pay dividends long term and will ultimately give them a competitive advantage.

About the author

Alexa Grellet is co-founder and commercial director at HR DataHub. As an experienced commercial leader, Alexa has worked in tech her entire career, from enterprises to scaling start-ups, all over the world. Alexa is passionate about using tech for good and has a talent for building strong inclusive cultures which is why she joined HR DataHub in January 2021. HR DataHub is an intelligence platform for HR teams and provides technology-powered objective insights. The Tech for Good company, which works for clients like M&S, DHL, Asda and EDF Energy, amongst many others, helps organisations make data-led people decisions by collecting reliable, wide ranging D&I data and combining it with cutting edge technology to provide actionable insights for organisations no matter the size or industry they operate in. Alexa is passionate about social justice and believes that improving the way we employ people is one of the most powerful ways to uplift society.