Diversity and inclusion (D&I) have been on the agenda for businesses for some time now. However, changes to how businesses operate following the Covid-19 pandemic challenges around staff recruitment and retainment and the prominence of Black Lives Matter over the last few years have meant that the business case for diversity and inclusion has never been stronger.
Morally, many companies think it is important to do everything they can to build best practices in the workplace. However, there are also business benefits to prioritising D&I – it can bring a wealth of new perspectives, ideas and talents to an organisation, allowing it to thrive in the marketplace.
Larger companies have been promoting their own inclusivity efforts with extravagant media campaigns and company-wide training programs. While small businesses do not have the same resources that big companies have to dedicate to D&I, there are still things that you can do as a small business to change the culture on this issue and implement meaningful progress. This is particularly important given that small businesses (with under fifty employees) accounted for 61% of total employment at the start of 2022.
What are Diversity and Inclusion in the Workplace?
Diversity and inclusion are often used interchangeably. However, although intricately linked, each means something slightly different.
Diversity in your workplace means that your staff consists of a genuine mix of individuals from various social and ethnic backgrounds who bring new perspectives to the table. It is more than just creating a racially and gender diverse team - diversity is also about people’s identity, nationality, age and disability status.
Inclusion is often defined as the extent to which everyone in the diverse mix feels involved, valued, respected, accepted and supported to do well at work.
The Benefits of Diversity and Inclusion
Diversity and inclusion are important from an equity viewpoint but also good for business.
In 2019, McKinsey and Company surveyed more than one thousand companies and found compelling evidence for a positive link between a company’s diversity and its financial performance. Companies with a higher ethnic and cultural diversity were 36 per cent more likely to outperform their peers on profitability. Similarly, for gender-diverse companies, the percentage was 25.
These trends can be explained by the many advantages of having more diversity and inclusivity in small businesses. Some of these are listed below:
- Focusing on D&I attracts higher-quality talent by widening the recruitment pool. Research carried out by Glassdoor in 2021, also suggested that three out of four job seekers consider a diverse workforce an important factor when evaluating job offers.
- More customers and investors are looking to take action to encourage diverse and inclusive work environments. Therefore a company’s policies and practices on this can also impact its ability to attract customer loyalty and investor decisions.
- More inclusivity helps a business better connect with and relate to a diverse audience
- More inclusivity promotes higher employee retention owing to greater workplace satisfaction
- When employees feel a sense of belonging at work, they are more engaged and more likely to go the extra mile for their organisation, which has a ripple effect on profitability.
Obstacles Facing Small Businesses in Relation to D&I
While the large majority of small businesses acknowledge the benefits and relevance of diversity, only a minority actually adopt formal HR strategies to address the issues. There are many reasons for this. For a start, such businesses are mainly locally based and operate regionally. Most employ fewer than ten people (often family members only) making them too small to include a range of individuals with diverse backgrounds.
Other issues facing small businesses include low levels of staff time, few financial resources, economic insecurity and the absence of a formal HR management process.
What Small Businesses Do To Promote Diversity and Inclusion?
You may feel that your options are limited, as a small business, to take significant steps to increase the diversity of your workforce, but that is not necessarily the case. Some of the strategies that small businesses can use to promote positive change without spending too much money include the following:
Incorporate the values of inclusivity and diversity at the very core of your business.
This could be done by educating yourself and your employees about treating everyone with respect and cultivating a work environment where everyone feels heard and valued. As a small organisation, you may not wish to have too many policies, but at least consider a concise statement on D&I, making clear your position on it, what behaviour is expected and how employees can raise concerns.
Encourage employees to be themselves and show pride in what makes them individuals.
Employee-led programs, charity drives and even social groups can help them put focus on things that matter to them. Acknowledging and celebrating other religious and cultural holidays as well as those in the Christian calendar can also be a good way of engaging employees.
Talk to employees.
They may have ideas for increasing diversity and inclusion in the workplace as they may be able to identify obstacles that management is unaware of.
Actively promote work-life balance programmes where possible.
This generally contributes to building an inclusive culture as it opens the door to workers from different backgrounds and circumstances and positively impacts the diversity of the workforce.
Watch out for social events, where inclusion barriers can unintentionally appear.
For example, always choosing a venue such as a pub may be uncomfortable for people of some religions and backgrounds, or always opting for evening socials may make it difficult for staff with childcare duties to attend.
Re-evaluate hiring processes to ensure that it encourages diversity.
For example, if you are receiving very few applications for a job from non-white candidates it might be worth re-examining where you are advertising that job and whether other channels might attract a wider pool of applicants. In this respect, also consider being proactive and using your network to widen your pool of candidates. LinkedIn can be a great source for those looking to actively diversify their team and can be used to reach out to people who have the right skills, but will also bring something new to your workforce.
Tackle what you can.
While it might not always be possible for very small businesses to represent diversity in their workplace, it may be possible to apply D&I to other areas of the business, such as customer base, products and market development. You could consider ways to make your products or services meet the needs of a more diverse community and investigate suppliers or vendors that are more diverse and inclusive. Products and services could be tested on a diverse range of people and marketing could be set up to achieve inclusivity and avoid stereotypes and cultural insensitivity.
Small businesses may not have the time or resources to host intensive training days on D&I, but there is still plenty that you can do to help employees feel that there is ongoing empathy and support in their place of work. Improving diversity and inclusion in your company will not happen overnight, but it will gradually lead to a happier, more productive and more profitable organisation.
If you would like expert guidance in drafting a D&I policy or statement, or any other policies for your organisation, we would be more than happy to help. Email us today.
