We Need Broader Thinking About DEI in Today’s Volatile Climate

According to KPMG’s 2022 DEI Progress Survey, 59% of companies consider diversity, equity, and inclusion critical to company growth and profit potential.

Fundamentally, these initiatives are designed to attract top talent and ensure all people feel a sense of welcoming and belonging to an organization, ultimately fostering more collaboration and innovation to drive growth.

While a quality DEI initiative can improve employee retention and innovation, many such programs haven’t delivered on their potential and are often viewed as a check-the-box exercise. In times of economic and geopolitical volatility, initiatives such as these are especially susceptible to disruption. So how can leaders engage effectively today?

Culture Shift

It’s become clear that initiatives to encourage a sense of inclusion and belonging are more effective when they’re accompanied by a broader cultural shift, one where everyone feels valued and respected. A recent analysis of the challenges with these programs found that “implicit bias resides in individuals, but it resides in organizational career systems as well. And fixing those systems is as simple as democratizing them.”

To do so, leaders must focus on creating opportunities to foster open, honest dialogue that leverages the unique insights and experiences of a diverse group, and respects and values individual contributions.

At KPMG, each of our professionals are invited to visit Lakehouse, our state-of-the-art learning, development, and innovation center in Lake Nona in Orlando, Fla., often referred to as our firm’s cultural home. Here, they can share their individual perspectives while attending trainings and honing their professional skills, all while immersed in our firm’s culture, which prioritizes values like inclusion and belonging.

As CEOs think about engaging everyone, they must account for key roles, particularly managers. Companies often focus heavily on broad-based training across an organization, but managers are responsible for setting the tone, and they play a critical role in upholding organizational culture.

To do this, managers must have the necessary tools to challenge their own preferences and biases, focusing instead on how they can bring out the best in each member of their team.

Employee Engagement

The future of work—where and how we work—is an important consideration and underscores the complexity of fully engaging your workforce. Although work-from-home rates have fallen from 2021 levels, they’re still higher than before the pandemic— the percentage of people primarily working from home tripled between 2019 to 2021.

Recent research reveals that the labor force participation rate for those with a disability rose almost 5% faster after 2020, showing that remote work has eliminated many longstanding obstacles for this community. Remote work also has helped to address the so-called motherhood penalty, with recent research showing a nearly one-to-one correlation in fields that have welcomed remote work with a rise in mothers’ employment.

As KPMG’s 2022 DEI report outlines, today’s complex and fast-changing work environment makes it important to check in regularly to evaluate how issues such as safety, authenticity, and microaggressions are affecting people in an organization on a day-to-day basis.

A 2021 report showed that remote and hybrid options have led many workers to experience fewer microaggressions or code-switching requirements in their day-to-day interactions, making flexible work critical to their mental well-being. Research is ongoing on the impact of hybrid work arrangements.

The challenge for leaders is finding the balance between their desire to have employees back in the office, employees seeking engagement, and employee benefits from virtual work.

Many leaders see hybrid work, which eliminates the potential drag on productivity from fully remote work, as a part of the solution. And hybrid work has been shown to improve employee recruitment and retention across all groups.

External Climate

CEOs are navigating an increasingly uncertain economic environment. They face more frequent disruptions—such as natural disasters, rapid advances in artificial intelligence, and supply chain shocks—while charting strategies that recognize long-term structural changes, including persistent inflation and higher cost of capital.

We refer to these twin challenges as compound volatility, which poses significant risks to growth and prosperity. Navigating compound volatility is made more complex by the ever-changing dynamics affecting the workforce today.

Leaders are looking at a structurally tight labor market creating heightened competition for talent. They’re also engaging the most diverse generation of talent, who are starting new jobs virtually after completing their university education in the context of the Covid-19 pandemic. Effectively harnessing the creativity, passion, and skills of this generation isn’t an easy job.

In times of increased complexity, fostering a diverse workforce is more important than ever as businesses must pivot quickly and adapt to changing circumstances. Ultimately, leaders who are committed to creating a culture where everyone feels valued, heard, and engaged at all levels of their company will be better positioned to grow and win in the marketplace.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Elena Richards is the chief diversity, equity, and inclusion officer at KPMG US.