Diversity, equity and inclusion – more than buzzwords
13 FEB 2023
Diversity, equity and inclusion have become buzzwords in the discussion of an important social topic. But are these issues also business relevant? The answer is a resounding yes!
Diversity, equity and inclusion have become buzzwords in the discussion of an important social topic. It’s no longer just about gender equality. Equal opportunity, irrespective of ethnic, cultural or social background, sexual orientation or physical limitations is just as important.
But are these issues also business relevant? The answer is a resounding yes! In an innovative, global and agile business such as ours, DE&I (Diversity, Equity & Inclusion) are not simply “nice-to-have”. They’re a necessity, a priority and a foundation of our business success.
Why is this the case? Three crucial factors – innovation, employee engagement and talent recruitment – lead to higher overall performance in diverse and inclusive companies.
Better innovative ability
Our business in the high-tech sector is characterized by a rapid pace of innovation and the constant need to adapt to continuously changing market environments. Diverse company teams are more innovative and anticipate changes in customer needs and markets earlier. People with different backgrounds and experiences see the same problem from different perspectives and find different solutions. This increases the likelihood that one of the solutions will lead to success. The company can respond quicker and more effectively to changing business environments. A publication by the World Economic Forum argues that organizations that rely on DE&I have an up to 20% higher rate of innovation than less inclusive organizations.
Higher employee engagement
Diversity in leadership teams and a focus on inclusion in the leadership culture also have a direct influence on employee engagement and team performance. Employees feel appreciated and accepted, which significantly increases motivation.
A study by Deloitte shows this direct relationship. Leadership based on inclusion results in a 70% increase in employees’ experiences of fairness, respect, value, and belonging. And this in turn significantly increases collaboration and improves teamwork.
Recruiting the best talent
We need to be attractive to all potential talent – irrespective of ethnic background, nationality or gender identity, for example. For a company such as Merck KGaA, Darmstadt, Germany, this applies worldwide. We’re competing globally; the United States and Asia are two of our key markets. Diversity within the teams is an essential prerequisite for thriving in this environment.
Significantly better company performance
Therefore, I’m not surprised that diverse and inclusive organizations fare better financially overall. An extensive McKinsey survey from 2020 backed this up. Ethnically and culturally diverse companies are considerably more likely to outperform their competitors.
However, the McKinsey study also shows that there is still a longer way to go when it comes to equality and fairness of opportunity in comparison with increasing workforce diversity. Among employees of the more than 1,700 companies surveyed in eight countries, overall sentiment on diversity was overwhelmingly positive; however, sentiment on inclusion was markedly worse with less than a third assessing it positively. This clearly shows that inclusion is more of a challenge for companies.
Employing more diverse talent is no longer enough – it’s employees’ experiences at the workplace that count. They have to experience and perceive equality and equity in their everyday work; this creates a feeling of belonging and security and thus better performance. The companies leading the way when it comes to DE&I have embedded this deeply in their company culture.
It’s not just a case of implementing individual measures but applying a systematic approach that takes bold and far-reaching measures for fairness, strives for real behavioral change and pursues a zero-tolerance policy for discriminatory behavior of any kind.
Merck KGaA, Darmstadt, Germany is taking a comprehensive approach
This is how we understand DE&I. We are setting ourselves bold ambitions for inclusion, gender equality and cultural and ethnic diversity. We aspire to build teams with a balanced age structure and diverse educational backgrounds and experience, and we aim to create an international working environment. We therefore also encourage our managers to actively build diverse teams by considering training opportunities to raise awareness and including diverse candidates in the interview selection process. We also offer our employees a broad range of training programs on topics such as inclusive team leadership and overcoming unconscious biases.
We strive for real cultural and behavioral change at all levels of the company and along the entire value chain. And of course, this applies in all regions globally in which we operate.
Cultural changes are long-term processes, which are not always easy to manage. We have developed KPIs for DE&I to make culture easier to grasp and measure our progress (e.g. an inclusion index, which we compile annually). These help us to regularly assess how well we’re doing and where we need to continue to improve.
This is supported by a DE&I organization that extends across all levels of the company: from the Chief Diversity Officer and our own Diversity Council to a wide range of formal and informal networks that campaign for female employees, for example, or which employees from various ethnic backgrounds or the LGBTQI+ community can join. Our Diversity Weeks, which we regularly host, provide platforms for learning and dialogue.
The most important thing is always that the focus is on human diversity. After all, diversity and inclusion have become so crucially important for business success – ultimately, what counts is that people are able to fully express their individuality, also at work and around their colleagues.