Challenges and opportunities for diversity leaders in 2023

As we look ahead for 2023, Diversity, Equity and Inclusion (DEI) strategies will continue to be a major concern for international leaders. The past couple of years has brought about a heightened awareness of the need for inclusive workplaces, as the Black Lives Matter and #MeToo movements, then the pandemic and cost of living crisis, has forced people to confront issues of racial injustice and social inequality. While organisations have begun to implement DEI strategies, many have encountered challenges, and some have even started to backtrack on their commitments. It is true that challenges are widespread, but there are positive prospects for DEI strategies in 2023 too. Drawing from recent insights from industry experts and research, this article will consider these key obstacles and prospects for DEI in 2023.

 

“We didn’t think the energy crisis would be as long term, fuelling the living cost increase that has already seen double digit inflation. This hit underrepresented groups worse than others; research shows that those from ethnic backgrounds will see cost of living rise more than white counterparts. Diversity and inclusion specialists need to think about how the organisation supports workers in financial distress. Budgets may rule out pay rises but there are non-financial initiatives that can help, like access to financial education, earned wage access (paid earlier than the pay date), and opportunities to get discounts, especially common products, and services. We [Centrica] gave everybody a support package internally from a certain grade and below as an unexpected piece of support, as we understood the challenges our colleagues are facing. While not affecting pay, it showed we understand things are not easy. We hadn’t done it before, but you can rewrite your own rule book. Nothing says you can’t do the right thing. I have a saying, ‘There’s never a wrong time to do the right thing.’” - Devi Virdi, Group Head of Diversity and Inclusion | Centrica.

 

A notable obstacle to greater inclusivity has been the worsening polarization experienced in the UK and many countries worldwide. Political and social polarization can create problems for diversity and inclusion champions in several ways. When people hold polarized views, they are less likely to listen to and understand opposing perspectives. This can make it difficult for diversity and inclusion champions to communicate their ideas and strategies effectively. People who hold extreme views may also be resistant to change and may not be willing to accept diversity and inclusion as important values. This can lead to a lack of support for diversity and inclusion efforts and may lead to worse lead to more stereotyping and bias.

 

“We sometimes see a challenging defensiveness in this space from people who have heard a lot of talk about DEI but aren’t seeing results. So, when you try to introduce new initiatives or discuss new topics, there can be a strong sense of DEI fatigue, especially from those who sit within affected groups who might be experiencing disproportionate outcomes. People are closed to new focuses from the get-go. Applying a focus on empathy and belonging seems to resonate at the moment, but some of the polarized debates perpetuated by the media are presenting a challenge. With the topic of gender identity, for example, so many of the viewpoints that we hear raised are laden with assumptions and often fall into a rigid binary of ‘against’ versus ‘for’, and vice versa. Whilst often not intentional, people don’t realise how much harm that can cause, the stereotyping that is reinforced. Nuance is everything.

What we try to do in training is set up a safe space to ask questions and have an open conversation. Then, by reflecting on terminology and some of the myths out there, we reflect on alternative considerations. Often people haven’t had the time or space to discuss these things, let alone within the workplace. Creating an opportunity to listen to concerns and reflect is crucial for building a more balanced conversation.

The great thing is that, where organisations have been focusing on DEI for a while now and are succeeding in building trust, progress is tangible; we see that people are more consciously curious and inclusive. Intersectionality is also much better understood, and organisations are taking bold steps beyond the Equality Act to consider the complexities of gender identity and expression, socioeconomic background, menopause, neurodiversity and much more. This more incisive and targeted approach seems to be a great catalyst for employee engagement.” – Molly Hugh, Senior Consultant | Green Park DICE Practice.

 

One of the primary challenges facing DEI strategies in 2023 is the issue of corporate accountability. As the Edelman Trust Barometer Report 2023 illustrates, there is a growing expectation among employees and consumers that companies will take a stand on issues of racial injustice and actively address societal issues. However, as some experts have noted, many companies have focused on "talk" rather than "tactics," which can lead to feelings of betrayal and mistrust among employees. To overcome this challenge, companies will need to be more transparent and accountable in their DEI efforts and make sure that their commitments are backed up by concrete actions and measurable outcomes.

 

“One of the big challenges of working in diversity and inclusion is lack of trust from ethnic minority communities. There are several cross-cutting issues that erode trust, [such as] a lack of transparency in how the system works and the way in which decisions are made.  At the CPS, we recognise these challenges, and we are taking steps to address them… The opportunity to build trust and public confidence is ever present. In the CPS we have done this through targeted community engagement where we can demystify how the (criminal justice) system works and the CPS's role within that and explain how we make decisions. We have established national and local mechanisms for doing community engagement. Our strategic partnerships play a pivotal role in driving the changes we want and must see to address the lack of trust and confidence… This clarity on the way in which we will ensure fairness for defendants is important for building trust.” - Baljit Ubhey​​,​ Director of Strategy & Policy | Crown Prosecution Service

 

Another major challenge is the high turnover rate among Chief Diversity Officers (CDOs) and other DEI leaders. Our research indicates that many DEI leaders are burning out, as they are often asked to take on a heavy workload with limited resources and support. To overcome this challenge, companies will need to invest in the development and retention of DEI leaders, providing them with the training, tools, and support they need to effectively lead DEI initiatives. They should recognize their achievements and contributions and also involve them in the decision-making process. Diversity & inclusion needs to be integrated into the broader picture.

 

“Organisations thinking about diversity and inclusion more nowadays means that there are more opportunities for change. Everyone got excited about positive changes before, but it needs to genuinely include everyone for it to really matter. It requires a systemic perspective. We need to ask how companies are being intentional about reducing inequality in their space, company and sector. It’s not about having a D&I strategy; it’s about folding it into the business strategy. Questions companies need to ask themselves are: How are we driving innovation? Who is in the room? Who is taking these decisions? Who is bringing the experience and understanding of the work to this table so we can talk about how we can approach innovation in a different way? Can we truly say we understand our market segments? And what mark do we want to leave?” – Dr Balissa Greene, Diversity and Inclusion Consultant and chartered Occupational Psychologist

 

Despite the increasing awareness of the importance of diversity, the senior management and leadership levels of many organizations remain homogeneous and non-diverse. However, there has been progress; FTSE 350 companies have met the target of 40% Women on Boards three years ahead of the 2025 deadline, for example. But, there is still a need for more organizations to support employees in reaching leadership roles and to allocate work inclusively. Furthermore, while career growth is an individual responsibility, organizations need to offer opportunities for discovery and growth, including through the support and evolution of employee resource groups (ERGs). The lack of action or progress in these areas can be a significant barrier to success in the field of diversity and inclusion.

 

“Post-covid, the same issues haven’t really gone away. There is still an issue of real proactive allyship and not just making DEI HR’s problem. Senior management and above still looks predominantly white. The needle for change in that area is not moving fast enough! Talent and succession planning requires an inclusive perspective and approach. Are you supporting those internally in your organisation to get promotions into leadership roles? How are you allocating work inclusively? Where are you looking for the next generation of talent? There is always an opportunity to find people from different areas, but leaders can be stuck in their ways. Are you being bold about thinking about where talent could be? Remember, global mobility offers opportunities… Career is an individual's responsibility, but organisations need to offer opportunities [to employees] to discover what it could look like, with opportunities to grow and try different things.” - Ama Afrifa-Tchie, Founder | The Inclusion Agilist Consultancy

 

One of the key opportunities for DEI strategies in 2023 is the potential for increased profitability. Research indicates that companies that prioritize organizational diversity tend to be more profitable, as they are better able to attract and retain top talent and are more innovative and adaptable. To take advantage of this opportunity, companies will need to focus on creating equitable hiring practices and re-evaluating job requirements to make sure that they are inclusive of diverse candidates. They should also focus on fostering a culture of inclusion, which will be essential for retaining diverse employees and leveraging their unique perspectives and talents. This includes C-Suite buy-in to ensure fair practice across the organisation. With greater transparency and reporting, organisations can see where the issues lie, and more data is available to inform improved decision-making.

 

“Pay gaps still remain and are yet to be tackled. This relates to race and disability as well as gender. Nationally, the pay gap in the higher education sector between black and white employees is 17%, it’s 9% between people with disabilities and those without, and there is a 15% gender pay gap… We can also see how institutions are doing in terms of delivering tangible change. Birkbeck has been celebrating incrementally narrowing these gaps, but it is not an indicator that the work is finished. More needs to be done and it must come from the top… Alongside strategy from the boardroom, the ‘nitty-gritty’ of how to foster an inclusive and diverse culture in the organisation practically must be considered… DEI is about inviting all leaders to ask about understanding these issues for other people, and thinking about what opportunities are available for different workers. Not everyone fits into the outdated image of the ‘ideal worker’ and casualisation of contracts can worsen injustices between groups. Leaders must keep asking what they are doing to make this better.” – Dr. Uracha Chatrakul Na Ayudhya, Senior Lecturer and Assistant Dean for Equalities and Diversity | Birkbeck, University of London

 

Another key opportunity for DEI strategies in 2023 is the potential for increased employee engagement and productivity. Research has shown that when employees feel included and valued, they are more likely to be engaged and productive. To take advantage of this opportunity, companies will need to focus on creating a culture of belonging, in which all employees feel valued and supported, regardless of their diverse identities. They should also provide training and resources to help employees understand and respect each other's differences, and create opportunities for employees to connect and collaborate across lines of difference. The trends we see in terms of hybrid and flexible working denote a significant opportunity for organisations to better include people that were typically marginalised from work due to lifestyle barriers and personal situations. The increased commitment to sustainability is another trend that we see impacting an increasing number of organisations’ strategies. How all this can  and should be integrated is not to be overlooked.

 

“The challenges faced by many women, especially single parents, with current macroeconomic difficulties make it hard for them to succeed. Additionally, while the travel & tourism sector is currently thriving, the D&I agenda has taken a hit. To attract the next generation of workers, it's crucial to show authenticity and invest resources and time into D&I. Despite the growing awareness of the importance of diversity, there is a danger of stopping at just being diverse and not focusing on Inclusion. It's crucial to continue pushing for inclusion. With the momentum from the recent movements… committed organizations have a real chance to make a difference. People like us who have been in this [D&I] space for a long time know who to go to and people know to come to us. It’s our time as committed organisations in this space to take the opportunity to do this with integrity. Integrating sustainability and inclusion is a huge opportunity not to be missed. Fortunately, more and more companies are seeing how creating and inclusive culture is crucial for sustainable business practice. I really dislike when people put sustainability in one side and D&I on the other, to us they are one and the same; empowering women is part of practicing sustainable development. Let’s stop separating them. Social sustainability has D&I at its core.” – Alessandra Alonso, Founder, Women In Travel

 

In conclusion, as we look ahead into 2023, diversity and inclusion strategies will continue to be a major concern for international leaders. While there are many challenges that need to be overcome, there are also many opportunities for companies that are willing to invest in DEI and make it a priority. By focusing on creating equitable hiring practices, fostering a culture of inclusion, and investing in the development and retention of DEI leaders, companies can reap the rewards of increased profitability, employee engagement and productivity. Change needs to come from the top and leaders must think strategically and tactically about how they can make diverse groups feel they belong and are supported during difficult socio-political and macroeconomic times. Integrating this learning throughout the organisations and with broader business strategies, such as sustainable practices, will offer valuable opportunities to make the changes needed for all colleagues to thrive into the future. The key is to start early and stay consistent, this way you won’t fall behind on your DEI journey.

 

“People’s expectations this year of how far businesses have moved forward with DEI or not, will be an opportunity to drive even more positive change. There was a huge push in 2020 after George Floyd’s death; people who didn’t realise DEI was a priority thought ‘OK, we need to solve this and bring in DEI experts.’ That was into year one. Then in 2021 it was too early to understand what data was saying. Now we’re in 2023. People are asking more from leaders. What are you really doing? There will be more pushback from employees if they’re not doing anything. People aren’t stupid. ‘The proof is in the pudding.’ If companies are not doing something now, it will be a big challenge for them.” - Andrea Henry, Diversity, Equity, Inclusion and Belonging Lead for Europe at Spotify

 

Note: Responses are edited for conciseness and clarity. Many thanks goes to the experts interviewed for this article.

To find out how Green Park can support your DEI agenda this year, get in touch.