Firms should not just pay lip service to diversity, inclusion

WHILE great strides have been made in achieving greater workplace diversity and inclusion, it is clear that Singapore corporations still have some way to go in becoming truly diverse and inclusive. The Singapore business world can do more to promote itself as a truly egalitarian environment, one where people of all types can come together, for the betterment of all.

There has been substantial research suggesting a correlation between diversity and performance. Companies which are proactive about being diverse and inclusive are more likely to have above-average financial performance, and conversely, companies on the other end of the spectrum are statistically less likely to achieve this. A McKinsey report in 2015 found that racially diverse teams across the UK and the Americas were 35 per cent more likely to have financial returns above their respective national industry medians, and 15 per cent more so for gender-diverse teams. A similar study by the Credit Suisse Research Institute of global large-cap companies found that those with at least one woman on their boards tend to financially outperform their more homogenously-male boardroom peers by 26 per cent.

While correlation is not causation, diversity and inclusion should continue to be important topics in the business agenda and will be competitive differentiators for companies that invest time and effort in these areas. Inclusive hiring and promotion practices, which seek to minimise biases, mean that companies do not form and reinforce a perception of their workforce that is already similar to their status quo in look and feel. For companies, breaking away from their "comfort zones" can yield great benefits. Diverse teams can draw on advantages such as a broader range of insights, more innovative ideas and an improved understanding of customer needs. These benefits also flow through to employee engagement, with higher performing teams naturally having greater job satisfaction and being more attractive to top talent.