Martha How: The impact of diversity and inclusion on employee experience

An organisation that develops a positive employee experience is well placed to attract and retain talent; its approach to diversity and inclusion is a key component of this. But, to avoid good intentions backfiring, employers must ensure they take a considered approach to implementing diversity and inclusion policies in the workplace.

Although there is no commonly agreed definition for employee experience, it is a different and wider concept to its predecessor, employee engagement. While engagement is personal to the individual and their opinion of the employer, experience encompasses thoughts, feelings and reactions reflecting the employer, so can be said to be employer-led.

Everything an organisation does, from its management team to its holiday policy, will influence the employee experience, helping to determine whether staff feel connected and supported, and even whether they actually like their employer or not.

For this reason, an organisation that wants to attract and retain a diverse workforce must demonstrate that it will support them and their careers.

Getting it right has significant business benefits, with evidence showing that both profitability and business performance can improve when diversity is explicitly managed.

For instance, in its January 2018 report Delivering through diversity, McKinsey looked at business performance across 1,000 organisations in 12 countries. This found that top-quartile organisations for gender diversity in executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation. Similarly, those in the top quartile for ethnic and cultural diversity in their executive teams were 33% more likely to have industry-leading profitability.

With UK demographics shifting, having a progressive diversity and inclusion policy makes sense.

The most recent census, conducted in 2011, showed a marked change on the previous survey: while 91.3% of people aged 16 to 64 in England and Wales described themselves as white in 2001, this had fallen to 85.6% by the 2011 survey.

Although hugely important, workforce diversity is one of the most complex challenges employers face. Employers must, therefore, carefully consider whether their approach is fair, equitable and achieving the desired effect.

A key area where an employer can deliver an inclusive strategy is in the benefits package. Here, a flexible benefits scheme is particularly useful. This allows employees to select the benefits that suit their needs; a family might want to take out insurance-based benefits, while a younger single person might prefer to increase their holiday allowance or take advantage of subsidised gym membership.

However, there are also risks with the benefits package, especially where employers look to demonstrate their diversity and inclusion policy in the products and services they offer.

As an example, take a corporate medical insurance scheme. An organisation wishing to demonstrate that it is highly inclusive and diversity-friendly, might include some elements of gender reassignment treatment, including breast enhancement and laser hair removal for transgender employees. But what happens if the organisation is approached by a non-transgender female employee who wants laser treatment for excess body hair?

It is important to think carefully about any change to benefits provision or design. Could someone be excluded as a result of an employer’s moves to be more inclusive? And, by catering for the so-called ‘minority’, is the majority being excluded in any way?

There is also a risk that benefits communications become bland as a result of sensitivities around diversity and inclusion. Adopting a self-select approach can help; by answering a few questions about their preferences, employees can receive a much more personalised set of communications.

While there are pitfalls, with diversity and inclusion playing such a significant part in employee experience, employers should not shy away from implementing a policy. Creating a workplace that supports and encourages diversity is a commercial necessity.

Martha How is principal at Aon