The 21st century workforce and workplace are changing significantly, and many HR directors are evolving their approaches accordingly. It’s important for HR directors to understand these significant shifts – such as the need for increased leadership diversity and a focus on social responsibility – to attract and retain talent in this new world order. Contributor Katie Bouton, Founder & CEO of Koya Leadership Partners.
Diversity, equity and inclusion are principles essential to success in today’s business environment. A recent McKinsey study showed that companies that have higher-diversity leadership teams and Boards experience 30 percent more success than those that don’t. These findings demonstrated a direct correlation between gender, racial, and ethnic diversity and better financial performance.
Yet, many HR directors struggle to diversify at the senior level. Despite wide-spread recognition that diversity is not just a critical value, but a key to success, the vast majority of C-suites and boardrooms are still comprised of a homogenous grouping of older white men. HR directors are increasingly tasked with diversity initiatives that result in increased representation of women and people of colour throughout their organisations, particularly at the top.
When Shark Tank investor Kevin O’Leary analyzed the various companies he invested in, he found that his most successful investment endeavors were the companies run by women. After nearly a decade of investing in small companies through Shark Tank, he told CNBC, “not some of my returns, all of my returns, have come from the ones run by women or owned by women.” Similarly, in 2015, when he invested in 27 companies, he told Business Insider, “I don’t have a single company run by a man right now that’s outperformed the ones run by women.”
The second critical shift is a demand for companies to be more socially responsible. Increasingly, a new generation of professionals is asking more of their employers. People (particularly millennials) are looking for workplaces and leadership that demonstrate their values and act upon them. Today, employees, customers and investors expect public and private companies to do more than simply give their time and money. They are demanding that companies find more innovative and impactful ways to help solve the broader challenges in society, as well as ways to help engage employees in these efforts.
Millennials, for example, often want to know what an employer stands for before they ask about salary. Seventy-five percent of millennials believe that businesses are focused on their own agendas, and not on helping to improve society, per a Deloitte study. Millennials are much more mission-driven than previous generations have been. Deloitte’s researchers call this an “impact gap” – when businesses are not doing enough to improve the world and make a positive impact. According to Forbes, 64 percent of millennials say it’s a priority for them to make the world a better place.
There are a number of actions that HR directors can take to help their companies better reflect and meet the needs of the 21st century workplace and workforce:
Build a Diverse and Inclusive Team. Do your leadership team and Board of Directors truly reflect 21st century society? Do you have women and people of color well-represented across all levels of your organization, including in the C-suite? Diversity is also critical to driving innovation; people with different perspectives, backgrounds and experiences are critical to that effort.
Find Your Larger Purpose. Purposeful Engagement – or Corporate Social Responsibility 2.0 – is a different way of operating that’s more impactful for your business and for society. Consider the larger contributions your company is making to society and assess how your company is driving critical social change. Align your business efforts with your larger purpose and it will shift how you operate.
Integrate Resources to Maximize Impact. Every company division needs to be engaged in the social responsibility effort, and all business resources must be deployed around this larger purpose. Typically, key resources devoted to social responsibility efforts have been siloed in different departments, often with very little coordination. Human resources deploys employees to volunteer, marketing manages branding through sponsorships and advertising, charitable giving departments give funds to nonprofits, and communications works to get press coverage on these efforts. When you shift your structure, you’ll create an overarching purposeful engagement strategy that integrates all of the company’s resources. Then, when you align all departments to collaboratively promote your larger social purpose, you’ll maximize value and impact.
Align Business Goals with Social Purpose. An institution’s larger social purpose can be the guiding principle for all its work. Done correctly, it will be designed and implemented in a way that is integral to business success. Ensure that every employee is engaged with your larger mission. Develop measurements for every department and business line. Without alignment, corporate mission can be easily sidelined.
Understand the Future Workforce. Millennials – which will comprise 50 percent of the workforce by 2020, per PwC – prioritize values and purpose, and expect companies to articulate and act upon their values and their larger social mission. They want to work with – and support – companies with a social mission, who care about more than just financial benchmarks. Having a Purposeful Engagement strategy is vital for attracting and retaining this next generation of employees/future leaders.
Engage Employees. Internal communication is critical. Employees will be much more engaged and willing to participate if they understand the larger social purpose and how they play a part. Clearly and authentically explain why the company is doing this, how Purposeful Engagement will be a core part of your corporate culture moving forward, and how the company – and its employees – will help meet societal needs. Discuss and demonstrate how your organisation is about more than just financial benchmarks – that you’re committed to helping make the world a better place.
As an HR director, you can be a driving force behind this workforce and workplace paradigm shift. When you understand the importance of elevating your company’s CSR efforts, you’ll be better able to help leaders buy into this concept. The more that businesses embrace Purposeful Engagement and the importance of diversity, equity and inclusion, the greater the benefit – increased customer loyalty, greater profits and higher levels of employee engagement and retention, all while helping make the world a better, more inclusive place.