Diversity and Inclusion have long been thought of as synonymous - but the fundamental distinction between the two is becoming increasingly important to organisations.
The first piece of the puzzle is seeing how diverse an organisation is, solely by looking at the number of people with certain characteristics in the organisation. But delving into an individual's experiences adds meaning and context to those statistics to discover how included people actually feel. It can be highly costly to embark on a program of improved diversity and this can all be in vain if your culture does not support inclusion and these people end up leaving.
Inclusion is a crucial variable when looking at organisational fitness, and we define it like this:
- everyone can be their authentic selves at work. Each person feels they work in a fair, meritocratic
- environment with balanced rewards based on each individuals’ contribution with flexibility for personal circumstances.
The finance sector has historically struggled with representation and inclusion, and though this has been changing and evolving over the years, there’s urgent need for improvement. Inclusion has its many advantages, so let's assess how it affects the Finance industry in particular.
Career Opportunities are vital to Inclusion
A key element of Inclusion is opportunities - the idea that there’s free, unbiased access to opportunities, regardless of identity. Looking at the data from the Financial sector, it’s clear that this equal access isn’t always a reality - especially when it comes to career progression.
Research shows only 1 in 10 management jobs in the UK are held by members of the black, Asian and ethnic minority (BAME) community. What’s more, the New Financial’s sample of 200 firms active in UK Financial Services showed an average of 23% female representation on Boards, but only 14% on Executive Committees. The issue of representation is brought to light here - how can representation be driven forward if people aren’t receiving equal opportunities to progress?
Better inclusion benefits not just organisations, but the overall economy. Recent findings in the May 2018 Randstad report showed that the UK economy would be £24bn bigger if those from BAME backgrounds progressed in their careers at the same pace as their white colleagues.
Inclusion is key to unlocking untapped potential, and has clear positive impacts for businesses too - but organisations struggle to address inclusion issues, particularly around equal distribution of recognition and opportunities.
Organisational fitness and Inclusion are intrinsically linked
We looked at 241 companies within the financial sector, and found their level of Inclusion was strongly correlated with overall Organisational fitness, that is the ability to thrive in tough circumstances. Specifically, when answering the question “I work in an environment where everyone is included, respected and accepted for who they are”:
- 94% of employees from companies with high organisational fitness agreed or strongly agreed
- 22% of employees from companies with low organisation fitness agreed or strongly agreed
It’s clear that Inclusion is a fundamental part of organisational fitness. The better a company’s organisational fitness, the more likely they are to have an inclusive environment and vice versa. A well-rounded organisation should set foundations for an inclusive culture, acknowledging the importance of making employees feel included in the workplace.
Steps in the right direction
Although there is still a long way to go in the finance sector, positive steps are being taken:
- Lloyds Banking Group have recently announced a programme to promote more black employees to senior roles, which includes a target of increasing fivefold the proportion of senior roles held by black employees by 2025. There are two good things to point out here; first, their goal is measurable and clear, and second they are specifically targeting the number of black employees not for the organisation overall but for Senior Leadership roles specifically. This is a step change from looking at the organisation as a whole. What remains to be seen is the strategy that LLyods will employ in order to source and engage those Black leaders.
- In June 2016, HM Treasury launched the ‘Women in Finance Charter’ - “a pledge for gender balance across financial services”, to encourage financial firms to ensure “the progression of women into senior roles …by focusing on the executive pipeline and mid-tier work”. In addition, they have set a target of 50% women in senior roles by by 2025.
- FCA has also set ethnicity targets of 8% senior roles to identify as BAME by 2020 and 13% by 2025.
These are indeed steps in the right direction and we applaud them! These organisations and others will also need to ensure a culture of Inclusion to make sure their efforts are not in vain.
Addressing Inclusion in your organisation
Inclusion and Diversity is not just about ethnicity and gender, indeed it is about your people representing the wider society and all levels and it is about everyone feeling included no matter their identity. Inclusion is vital to all organisations, not just the financial sector. But as inclusion is a sensitive area, and at times a ‘slippery slope’, you need to handle it properly. Learning more about your employees, who they are as individuals and what their experiences are at work, is the first step in the right direction.
If you want to learn more about Inclusion within your organisation, find out how we can help.