Diversity is a smart workforce investment
First of a kind CDO study shows reputation, retention, and revenue value for large global corporations
Although the Chief Diversity Officer (CDO) title is relatively new in corporate America, many organizations — starting in the 1960s with the military and educational institutions — have had a diversity function. The role and tasks associated with diversity and inclusion (D&I) have evolved as social and political institutions have sought to manage increasingly diverse perspectives, experiences, and lifestyles.[1]
Today, respect for differences among individuals in organizations has become a well-recognized business imperative. The D&I function within organizations touches on physical and cognitive ability as well as all the ways employees see themselves and identify in their daily lives: their faith and religious identity, ideological and political perspectives, racial and ethnic identity, cultural perspectives, gender identity, sexual orientation, and other experiences like military status.
Most Americans (77%), believe that their country’s racial and ethnic diversity is good for the country, and nearly as many (75%) say it is important for companies and organizations to promote this diversity in their workplace.[2]
Evidence of positive contributions to company success from having diverse workforces has fueled demand for CDOs and other D&I professionals.[3] Despite brisk corporate D&I professional job growth, there is scant publicly-available information about how this leadership role is shaping up in today’s corporations.
To fill the gap, global communications and marketing solutions firm Weber Shandwick and management consultancy United Minds partnered with KRC Research to survey 500 senior-level corporate D&I professionals, including a subset of CDOs, at high revenue companies in the U.S. The result, Chief Diversity Officers Today: Paving the Way for Diversity & Inclusion Success, provides a wealth of knowledge about today’s corporate CDOs: their professional background, skills and experiences for success, responsibilities, reporting structure, priorities, performance measurement, external partners, challenges, and their outlook on the future of D&I.
D&I professionals in our study define D&I as accepting, respecting, appreciating, including, and providing equal opportunities for all people and groups in the workforce to foster teamwork and growth.
The survey shows that top priorities for CDOs include recruiting and retaining diverse talent; D&I training, learning, and development; and fostering a D&I workplace culture.
In the study, we identified companies whose D&I functions are “well-aligned” with their company’s overall business objectives (39% of companies), those “aligned” but with room to improve (46%), and those whose functions are “misaligned” (11%).
A key insight is that when corporate D&I practices are well aligned with business strategies, companies see positive outcomes for reputation, retention, and revenue.
Many D&I professionals believe D&I is an important driver to foster positive company reputation, attract high high-quality talent, and to bolster financial performance. Companies showing D&I functions as well-aligned with their company’s business strategy showed far greater returns on reputation, retention, and revenue compared to other companies.
The survey found that alignment:
· Positively impacts company reputation. Eight in 10 executives in Well-Aligned D&I functions (79 percent) strongly agree that D&I is an important driver of company reputation. This rate is significantly higher than the 44 percent of those surveyed who said that their company’s D&I functions are just Aligned with business goals and about 30 percent of executives from companies with Misaligned D&I functions (30 percent).
· Has a tangible outcome on hiring and retention. On average, the study found D&I activities impact 30 percent of new hires and 13 percent of resignations. However, Well-Aligned functions have a significantly higher rate of acceptances (33 percent) due to D&I issues than Aligned functions (28 percent) and Misaligned functions (24 percent).
· Improves financial performance. Two-thirds executives in Well-Aligned D&I functions (66 percent) strongly agree that D&I is an important driver of financial performance. Again, this rate is significantly higher than that of executives in Aligned D&I functions (27 percent) and Misaligned D&I functions (12 percent).
“Our research demonstrates that companies with the most successful D&I functions commit the resources to D&I and ensure it is integrated into the culture and larger business strategy of the organization as well as Human Resources,” said Tai Wingfield, SVP and lead of Weber Shandwick’s DEI offering. “Alignment doesn’t happen by accident, it is fostered deliberately through leadership, CEO support, financial accountability and strategic communications.”
The biggest challenge CDOs personally face in achieving D&I goals within their companies are making the business case for D&I internally. In fact, many CDOs say that D&I is not prioritized unless there is a visible or public problem with D&I. A related challenge is making D&I values and outcomes visible externally.
Challenges that stand in the way of company D&I goals include issues associated with their organizational culture, external cultural/societal/sector shifts, and D&I fatigue, customer and employee demands for D&I, employee engagement, structural changes in the company and in the company’s leadership, organizational crises and issues — including ones that are specific to D&I.
Despite challenges, most CDOs (81%) are optimistic about the future of D&I in corporate America.
Edited by Sally Squires & Lexi Mondot
Interested in working with us? Please contact Ellen DeMunter at EDemunter@powelltate.com.
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About the Research
Weber Shandwick and United Minds commissioned KRC Research to conduct a survey of 500 individuals in the U.S. who are senior level professionals responsible for diversity and inclusion at their organizations. Respondents — sourced from a commercial panel — were screened to qualify for the study as follows: Work full-time for organizations with annual revenue of at least $500 million; Are 18 years of age or older; Spend at least some of their time on the job dedicated to diversity and inclusion; Are the senior-most, share senior-most, or report to the senior-most D&I professional in company; and Do not work for an advertising, marketing or PR agency. The 20-minute online survey was fielded from March 4–27, 2019.
About Weber Shandwick
Weber Shandwick is a leading global communications network that delivers next-generation solutions to brands, businesses and organizations in major markets around the world. Led by world-class strategic and creative thinkers and activators, we have won some of the most prestigious awards in the industry. For more information, visit http://www.webershandwick.com.
About United Minds
United Minds is a management consultancy that specializes in transformation. Leveraging a deep bench of specialists, the company helps organizations deliver positive, lasting change by combining data-fueled strategy and creative communications solutions, engaging stakeholders in every part of the process. United Minds is part of Weber Shandwick, one of the world’s leading communications and marketing solutions firms. For more information, visit www.unitedmindsglobal.com
About KRC Research
KRC Research is a global nonpartisan opinion research consultancy. A unit of the Interpublic Group of Companies (NYSE: IPG), KRC Research offers the quality and custom service of a small firm with the reach of a global organization. For over 30 years, KRC Research has worked on behalf of corporations, governments, not-for-profits and the communications firms that represent them. Staffed with multidisciplinary research professionals, KRC combines sophisticated research tools with real-world communications experience. For more information, visit www.krcresearch.com
[1] Vaughn, B. E. (2007). The History of Diversity Training and Its Pioneers. In Billy E. Vaughn (Ed.), Strategic Diversity & Inclusion Management (Now Diversity Officer magazine), pp. 11–16, Vol. 1, №1. Diversity Training University: San Francisco.
[2] Pew Research Center, Survey of 6,637 U.S. adults conducted Jan. 22 to Feb. 5, 2019. https://www.pewsocialtrends.org/2019/05/08/americans-see-advantages-and-challenges-in-countrys-growing-racial-and-ethnic-diversity/
[3] Indeed Hiring Lab, State of the Labor Market: Diversity and Inclusion Jobs Grow Briskly, March 26, 2018 by Daniel Culbertson.
