Few companies consider alignment of employees’ beliefs and values with their culture beyond “fit” during the hiring process. “Fit” is equally important for candidates when considering prospective or current employers. The bigger the gap between their personal beliefs and perceptions of the work environment, the higher the probability of disengagement and/or attrition.
When it comes to workplace inclusion and equality, our research indicates that a significant gap exists between employee beliefs and the reality of their workplace. The work environment is a direct reflection of the corporate culture. We found that on average, both women and men rate the importance of an inclusive and equitable work environment in the 8’s on a 10-point scale. A 3-point drop for women and 2-points for men emerges when rating the degree to which it actually exists in their current companies.
Why This Matters
There are two compelling reasons for mitigating this gap: overall company performance and talent acquisition.
Company reputation is paramount in the age of social media. Financially, organizations with good reputations are perceived as providing greater value, cultivating greater customer loyalty, and are believed to deliver higher earnings and market value.
People want to be affiliated with companies known for great working environments along with development and advancement opportunities. Once established, it is difficult to shift a negative reputation. The fintech, technology, and biotech industries experience this first-hand despite efforts to address existing challenges.
Hiring and retaining top talent is challenging at best and retaining them is critical given the current environment. Low unemployment and a shortage of skilled professionals has created a highly competitive talent market. As a result, sourcing and hiring takes more time coupled with the need to offer higher salaries and better benefits.
Replacing employees is expensive when considering the many factors involved with this process. Filling a position can cost up to 20% of a mid-range employee’s annual salary and up to 213% for executive leadership. Brain drain occurs every time an employee severs ties with their employer. Additionally, losing a team member affects productivity and, ultimately, profitability.
Employee (dis)engagement and activism have come to the forefront. According to Gallup, about one-third of employees are actively engaged. Disengagement costs companies “approximately $3,400 for every $10,000 in annual salary” or $350 billion per year for the US economy.
45% of all employees indicate they make employment decisions based on the actions a company takes regarding important societal issues.
Forty-five percent of all employees indicate they make employment decisions based on the actions a company takes regarding important societal issues. Employees are actively holding executive leadership accountable for being socially responsible and vocal about societal issues. The recent walk outs at Wayfair, Google, and Microsoft are the result of personal beliefs being at odds with their companies’ business decisions – a prime example of why alignment between the two is important.
Moving Forward
It is complicated but possible to close the gap between personal beliefs and the reality of workplace diversity, inclusion, and equity. A fundamental change in organizational culture, workplace systems, and accountability throughout the company is required for enduring results. The following seven steps will help start the process: Step 1: Integrate diversity and inclusion as a vital part of the business strategy; define specific goals. Step 2: Ensure the CEO and senior leadership are actively engaged and visible champions of inclusion; publicly declare a commitment to addressing inequities. Step 3: Conduct an in-depth assessment of employees’ current perceptions of diversity and inclusion; include questions about personal beliefs regarding their importance. Step 4: Use data from the assessment as a baseline for designing a comprehensive strategic plan and effectively allocating resources. Step 5: Commit to acting on the results of the assessment; provide frequent and consistent communication regarding progress. Step 6: Reinforce organizational buy-in and alignment through accountability. Step 7: Monitor progress regularly. In addition to generating revenue, the challenge for early stage companies is to ensure inclusion is a critical part of their business strategy embedding it in the culture from the beginning. Mature companies may have an existing diversity and inclusion strategy based on industry best practices and “head count” but many lack a baseline to determine changes in employees’ perceptions. Engagement surveys provide high-level views of employees’ experiences. However, measuring perceptional changes is a more accurate indicator of success and potential problems lurking beneath the surface. Every generation entering the workforce has a direct impact on corporate culture and policies forcing organizations to adapt. A prime example of this is the recent shift from shareholder primacy to a focus on environmental, social, and governance (ESG) led by The Business Roundtable. The genesis of this initiative is unknown although I would like to believe CEOs are realizing the business benefit of ethical and socially responsible decision making. Regardless the motivation, this is an important first step in realigning company culture with employee beliefs. While it takes time, resources, and an unwavering commitment to change a company’s culture, the benefits far out-weigh the effort. It is no longer a luxury; it is a necessity for a company to thrive.