• June 7, 2024

Reframing the case: IMA India’s 2024 DE&I Agenda Report Highlights the Strategic Imperative of DE&I for Business Success

Reframing the case: IMA India’s 2024 DE&I Agenda Report Highlights the Strategic Imperative of DE&I for Business Success

In an era where the moral imperative of Diversity, Equity, and Inclusion (DE&I) is increasingly recognised, the business case for DE&I has emerged as equally compelling. This transformation has turned DEI into a financial necessity, particularly in a country like India with its complex social dynamics and diverse, multigenerational workforce.

India’s overall diversity score, particularly regarding gender, lags behind global standards. As a result, many Indian businesses find themselves in a race to catch up. The majority of DE&I research lacks India-specific insights, prompting IMA India to survey and interview HR leaders from both foreign and domestic companies about their DE&I practices. The 2024 DE&I Agenda Report, consolidates these findings, capturing insights from a range of industries. CFOs and other C-suite executives can also leverage these insights to enhance their strategic initiatives and enable a more inclusive workplace culture.

McKinsey’s annual reports consistently demonstrate that diverse companies financially outperform their less diverse peers, with the margin widening each year. Increasing female workforce participation could particularly help emerging economies like India unlock their full potential. The World Economic Forum (WEF) found that globally, 39% of job seekers have rejected job offers due to a perceived lack of inclusivity at the hiring organisation. Non-inclusive workplaces often suffer higher rates of employee burnout, quiet quitting, and attrition. Conversely, inclusive workplaces drive employee referrals, strengthening the recruitment of top talent.

Reflecting India’s socio-economic diversity, current findings reveal that employees from economically weaker sections (EWS) and ethnic and religious minorities constitute the largest share of diverse groups in the workforce. The option for hybrid work has become a priority, particularly for women, who are approximately 10% more likely than men to resign if hybrid work is not available.

In 2021, Bayer launched ‘B Secure,’ a mobile communication app to ensure the security of its employees. Supported by the South Asia Security Team’s extensive ground network, the app functions 24/7 as a first responder when an alert is raised. The app features a Panic button for instant calls to the South Asia Security Team and access to nearby hospitals and police stations, a Follow Me button to monitor one’s movements, and a Report Incident feature to capture and disseminate information. B Secure is especially beneficial for women colleagues who travel extensively, providing immediate access to responders in case of a crisis and promoting a sense of care and security.

To measure the success of DE&I initiatives, clear metrics are essential. Commonly used measures include the proportion of diverse hires, attrition rates within diverse groups, and the number of leadership positions filled by diverse employees. Additional useful metrics encompass engagement levels and gender pay gaps. On average, larger companies (by revenue or workforce size) are more likely to establish formal DE&I frameworks and targets, while smaller firms often rely on informal frameworks due to resource constraints or lack of established processes.

Embedding DE&I into every organisational function is crucial. However, care must be taken to avoid alienating employees who do not belong to diverse groups, as resentment can undermine the inclusive culture DE&I programmes aim to build. Success factors also include recognising the uniqueness of each organisation’s DE&I journey, considering various factors like leadership intent, available resources, macro influences, and personal experiences.

Forward-looking organisations acknowledge that an inclusive environment enhances both profitability and productivity. A recent McKinsey report on DE&I highlights a growing trend: diverse companies financially outperform their peers, and the gap is increasing. Conversely, a lack of diversity can lead to financial underperformance, with companies in the lowest quartile for gender and ethnic diversity being about 66% less likely to achieve financial success. Thus, a lack of diversity can be financially detrimental.

Despite progress, differently-abled individuals and the LGBTQI+ community remain underrepresented, partly because many LGBTQI+ individuals do not disclose their sexual identities. Looking ahead, general indifference is considered the greatest threat to the implementation and expansion of DE&I programmes. This is closely followed by the perception that the workforce is already sufficiently diverse, negating the need for further action. However, most respondents do not perceive a lack of top-management commitment to DEI.

Integrating DE&I into the core of business operations is not just a moral obligation but a financial imperative. As businesses in India and worldwide strive to harness the full potential of their diverse workforces, the emphasis on DE&I will continue to grow, driving both social progress and economic success.

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