27 September 2023

The future of work: Three steps towards an inclusive workplace

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Diana Ellsworth, Marino Mugayar-Baldocchi, Bill Schaninger and Kartik Sharma* discuss how leaders can embrace the diversity in their teams.

Amid a social reckoning over the past year, we’ve seen a meaningful shift in organisations’ attention to racial justice and equity, including real commitments and investments in doing better.

Leaders are asking both tough and important questions for the future of work, including whether their organisation is genuinely accepting of all people and if their company ensures equal access to opportunities throughout the talent lifecycle.

However, the COVID-19 crisis risks wiping out years of advances in supporting a diverse workforce.

Our research has shown that the pandemic has disproportionately affected women and people of colour, who tend to be concentrated in sectors severely impacted by the crisis.

Additionally, an organisation’s talent practices could be hindering—rather than helping—its efforts.

We see three broad actions organisations can take to ensure they are addressing these challenges in a meaningful way.

  • Make diversity a priority.

Diversity, equity, and inclusion (DE&I) is good business, and it doesn’t have to come at the expense of financial outcomes: Our Diversity Matters research has shown that there is a robust business case for DE&I.

Companies that are in the top quartile for ethnic diversity on executive teams were 36 per cent more likely to have above-average profitability than companies in the fourth quartile.

A similar trend can be seen for gender diversity, with companies in the top quartile being 25 per cent more likely to have above-average profitability than those in the fourth quartile.

  • Challenge biases to increase equity.

The push toward an equitable playing field in the organisation begins even before candidates join.

Many leaders often screen talent based on their own unconscious preferences rather than what is predictive of success.

Counter this by aggressively challenging assumptions about the knowledge, skills, attributes, and experiences (KSAEs) required to succeed.

These KSAEs should be job-relevant and be clearly established before the candidate review process begins.

Underlying assumptions about what people need to know, the degrees and background required, the skills they need, and the attributes that make them successful are subtle, pervasive, and worth challenging.

Language can be an early red flag—for example, conversations about a candidate’s “cultural fit.” Always ask if there is any evidence that suggests something truly differentiates between good and lackluster performers.

If not, it has no business being in the conversation.

Don’t curtail the talent funnel out of the gate because of convention; you could be forgoing amazing talent.

This is an opportunity to rewrite some of the rules.

  • Improve inclusivity.

While essential, a diverse workforce alone is not the full story.

There remains urgent need to increase workplace inclusivity—the degree to which employees are embraced and empowered to make meaningful contributions.

Most employees characterize inclusion on two levels: their personal experience and the way they perceive their organisation more broadly.

What is the company’s working environment like for women, people of colour, LGBTQ+ employees, and other under-represented groups?

Are the right communities and supporting mechanisms in place?

Are managers having open conversations about what it takes to succeed, providing good feedback consistently, and being good sponsors?

Addressing these questions is essential to not only building but also retaining a diverse, high-performing workforce.

Additionally, leaders need to take the drive for change and role modeling into their own hands.

They must embrace the vulnerability that comes from making mistakes to keep trying and break the cycle.

In particular, leaders from the majority group need to recognise that while they may not know exactly how to have a conversation, and they might not say exactly the right thing, they shouldn’t let that vulnerability prevent the conversation from happening.

Having honest conversations and taking meaningful actions around DE&I are tough but necessary steps for any organisation looking to succeed in the post-pandemic future.

Embracing diversity, challenging personal and institutional biases to increase equity, and improving inclusivity are good places to start.

*Diana Ellsworth Leads McKinsey’s diversity, equity, and inclusion work. Marino Mugayar-Baldocchi provides expertise on leadership. Bill Schaninger designs and manages organisational transformations. Kartik Sharma partners with clients on organisational transformations.

This article first appeared at mckinsey.com.

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