It is no secret that a diverse workforce is a healthier one – one of the key findings of this year’s McKinsey Report, Delivering Through Diversity, was that companies with a diverse leadership continually outperform those without. Yet, despite overwhelming evidence of its benefits, only 6% of 2017 FTSE 100 chairs were people of colour and in 2016 only 11% of create jobs in the UK were held by black, African and minority ethnic people.
Founder and CEO of Equality Group – a business consultancy committed to building a diverse talent database in the FinTech workd and offering companies guidance on reaching their diversity goals – believes the problem lies within many companies’ perception of diversity as a ‘nice to have’ option rather than a ‘must have’ quality that will improve the health of their company.
Here, she talks through the rewards that companies reap from engaging with true diversity and the misconceptions that still stand in the way of many companies achieving it.
Bianca Barratt: Why are you focusing on investing in businesses led by black and Asian women?
Hephzi Pemberton: As a businesswoman and an angel investor, I have always cared deeply about creating greater equality in access to opportunities. I founded Equality Group earlier this year to focus on increasing access to Finance and Technology for all under-represented groups. I found it incredible that last year women of colour received less than 1% of all venture funding. That isn’t a reflection of the lack of talented female entrepreneurs, it’s a reflection of the industry that invests in them (or not). There are a number of great women of colour who don’t necessarily have access to the networks and resources to make their business vision a reality and I want to be a small part of plugging that gap.
BB: What do you think about our current perception of diversity in the workplace?
HP: A lot of the time diversity in the workplace seems to be a “nice to have” rather than a “must have”. The firms that are really embracing diversity as a key part of their culture and how they do business are seeing the fruits of their investment in the form of greater creativity, better decision making, a more inclusive culture and stronger financial results, as McKinsey has shown with research spanning over 10 years. When diversity is seen as a competitive advantage and business necessity then you see incredible rates of change in the diversity of an organisation. When diversity is simply seen as either as a Corporate Social Responsibility or Public Relations exercise, then you see very little (if any) progress on the numbers and results. Of course, when holistically measuring diversity you would like to go for true diversity of background and thought rather than making diversity just a gender issue, which is often the case currently.
BB: What impact is this current perception [of diversity] having on companies?
HP: My view is that businesses that fail to expand their perception of diversity beyond a “nice to have” will be left behind. We are living in an increasingly more diverse and connected world, where people – whether investors, customers or employees – are looking for organisations that reflect the world they want to live in. I think more diverse and inclusive businesses will be able to attract the best talent and appeal to more customers. The interesting part will be when it ceases to be an advantage to be diverse but becomes a death-wish not to be.
BB: What are the financial benefits of a diverse workplace?
HP: Unsurprisingly, gathering the data from companies who are failing to increase diversity is a challenge, however, we do get a clear message from the studies that have been done. This year’s McKinsey report, Delivering Through Diversity, found that companies in the top quartile for gender diversity on executive teams were 21 percent more likely to outperform on profitability and 27 percent more likely to have superior value creation. The results were even more impressive for ethnic and cultural diversity: top-quartile companies were 33 percent more likely to have industry-leading profitability.
BB: Why do you think so many companies are dragging their feet when it comes to true diversity?
HP: Let’s look at the interesting group – those who want to increase diversity, but can’t. The remaining group, who don’t want any change will be getting what they are already looking for – the status quo. For those who do want to change there are a few common pitfalls which make it look like you are dragging your feet when you are earnestly not intending to.
One main pitfall is that you need buy-in from across the organisation, but too frequently diversity is limited to an “HR issue”. Given that there are numerous reasons why recruiting and retaining diverse talent can be challenging, it becomes much easier to drive change through when you start with clear sponsorship from the top.
BB: What are the obstacles you come up against time and again in your work?
HP: One of the most frequent and frustrating obstacles we come across at Equality Group when helping to drive increased diversity is meeting people who have been speaking a lot about the value of diversity, but when it comes to doing some of the harder work of reviewing their talent pipeline and development frameworks or running searches with a greater number of diverse candidates on the shortlist, there is a remarkable amount of inertia. Historically this was understandable as there were few specialist firms to help increase the diversity of pipelines, but within Finance and Technology at least, I hope that this is now no longer the case!
BB: Tell me a story of a time you’ve been surprised by someone’s perception of diversity – either positively or negatively.
HP: I have always said that Equality Group includes everyone and that we don’t discriminate against any type of person. To prove this point, I have the happy scenario of currently working with two female co-heads of a large fund and diversity in their leadership team currently would be a senior male colleague. Hopefully it’s a great example of how more searches will look for us in the future, when we are not just asked to hire “more women” or “more ethnic minorities”, but simply to hire the most talented individual that would also bring the most diversity to a team.
BB: Within your own experience, what was the catalyst for setting up Equality Group?
HP: Having worked in talent and recruitment for almost a decade, I knew that more needed to be done if we wanted to see greater levels of diversity in Finance and Technology. Too often search firms are replicating lists of candidates they have already sourced and rarely are these as diverse as they could be. There is a lot of like-for-like hiring that exists in the market and I wanted to build a firm that was turning the formula on its head. At Equality Group, we start with diversity at the centre of what we do, rather than add it on at the end.
BB: Does the political climate have an impact on your work?
HP: As Equality Group works with companies in Finance and Technology rather than directly with the government, we are less immediately effected by the political climate in Westminster or Washington. Despite the current uncertainty and relative instability of the political environment, there have been some positive steps towards greater equality and fairness, which we very much encourage. For example, some of the recent political pressure for greater levels of transparency around compensation and senior leadership representation has been helpful in bringing diversity onto corporate agendas and I am sure that this trend will only continue.
BB: What do you see as the biggest obstacles for creating diversity in the next five years?
HP: The first obstacle is the number of visionary leaders and leadership teams that make diversity a strategic priority from the very top. The second is around evolving recruitment processes and pipelines to increase the number of diverse candidates that are successful. Then the third is developing a business culture and work environment where diversity can thrive and accelerate into leadership positions, where they then become the role models and mentors that inspire more diverse talent to join the organisation. It becomes a virtuous circle when all three of those things happen.
By Bianca Barratt
Source: Forbes
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