It is now an acknowledged fact that companies gain significantly from the variety of perspectives that people of different backgrounds bring. Evidence suggests that diversity can bring greater revenues and increased profits.
Global multinational firms recognize the benefits of diversity, and many are taking proactive steps towards increasing the multiplicity of their workforce. Most Indian companies, however, are yet to make any real progress on this front. The country lags behind not just developed economies, but also BRICS nations on the employment gender gap. The Thomson Reuters Global Diversity and Inclusion Index 2018 named only one India-headquartered company in their top 100.
Contextual Challenges to Building Diverse Organizations
While diversity can take multiple forms, one of the most focal points of diversity – particularly for India – is gender. Research suggests that gender diversity in India could boost GDP by as much as 27%. And yet, only 31% of Indian women work. There are a multitude of reasons for this stagnation.
- The problem begins at the foundations of society, in homes and schools. The girl child mortality rates in India are far higher than that of male children, and access to public health facilities for socially backward groups remains low.
- Even at the primary and secondary school level, girls are often left behind.
- This gap, combined with the ineffectiveness of Indian higher education at producing employable graduates, compounds over time and reduces the multiplicity of the pool of potential recruits.
Furthermore, concerns around overall safety as well as workplace safety point to a need for organizations to invest specifically in ensuring the security of employees at the workplace and in transit. Physical safety is a key lever in preparing an organization for a diverse workforce. However, the archaic, opaque, restrictive and perplexing legal framework is a significant obstacle to diversity because it increases the risks, discouraging employers from creating a heterogeneous workforce. Labour and corporate laws have not kept up with the dynamic business environment of India.
Companies are microcosms of the socio-cultural environment they operate in. Indian firms also contend with the deep-rooted discrimination and power hierarchies that plague society. Any organisation eager to create a sustainably diverse workforce will have to invest in changing mind-sets, uprooting entrenched notions and overcoming the resistance to change.
The Journey to Sustainable Diversity
Thus, any organization trying to build such a workforce needs real thought leadership and the unwavering commitment from its highest ranks. Corporate organizations have clear structures to provide this thought leadership through governance mechanisms. The Board and its committees are tasked with keeping executives accountable and providing long-term vision that should inform day-to-day activities. Board-level involvement and oversight, coupled with strong governance mechanisms ensures the longevity and stability of diversity outcomes. An often overlooked aspect of governing for diversity is that Boards themselves should be pioneers in reflecting the multiplicity they aim for in the organization. India needs to work towards introducing diversity into its governance structures, with a number of listed companies in the country in contravention of a 2013 law that requires them to have at least one woman on their boards. Even those that complied with the law, in a discouraging display of tokenism, appointed female relatives of male Board members, defeating the purpose of introducing greater diversity into corporate spaces.
While a company’s Board provides strategic vision and direction to diversity initiatives, the day-to-day functioning of the organization falls to employees, particularly senior and middle administration. Managing a sustainably diverse workforce requires a focus on Inclusion, by respecting and welcoming different views around the table. Mentorship, empathetic leadership and cultural intelligence are vital to keeping a diverse workforce motivated and productive.
Finally, to embed diversity & inclusion into an organization’s DNA, companies need to create decentralised nuclei of change across the hierarchy by using openly stated and reinforced value statements and coaching programmes that encourage awareness and proactive support for multiplicity at all levels. This fosters a sense of responsibility towards inclusion, effectively ingraining these values into the cultural norms that employees abide by and advocate.
Why should Organizations be Diverse?
The answer is simple: It is no longer a choice. India is moving forward at a breakneck pace. The country’s rapidly increasing internet penetration and rising affluence, amongst other factors, contribute to an ever-changing consumer market. A wave of regulatory change is also underway with reforms in banking and taxation. Senior executives of India, Inc. remain concerned with the volatility of Indian laws. In an environment like this, diversity is much more than just a competitive advantage. It is a key success factor. A company with a diverse workforce has the potential to understand customers better, adapt to change quicker and be more innovative. Furthermore, the symbiotic relationship between society and business is only growing stronger with the increasing amount of time people spend at their workplaces. From employment policies impacting citizen welfare to sustainable processes safeguarding against climate change, businesses have the capacity to create ripple effects and have an undeniable impact on society. Any business must thus respond to the needs of the societies they operate in, and one of the most effective ways to do so is to provide safe and dignified livelihoods to the diverse communities they are part of. Business cannot thrive without the equal participation of all sections of society. These qualities will be vital to survival in the Indian environment, and businesses will thus need to embark on a journey towards greater diversity and Inclusion.