10 tips for encouraging diversity in SMEs

The recent Black Lives Matter campaign shone a bright light on inequality in our society, not least in the workplace. Many SMEs have openly pledged to build more diverse workplaces, so we’ve compiled 10 top tips to help them achieve real change.

The Black Lives Matter message called for us all to listen and to re-educate ourselves on the topic of diversity. In terms of workplace equality, once you begin to listen, it’s obvious well-intentioned words and policies often fail to create meaningful change:

“Esther says diversity is a buzzword: her company proclaims that it “wants to fill positions with people of colour”, and she has sat through “presentations where they go on and on about it”. But, she says, that message doesn’t translate into the core of the profession’s daily practice.” [The Guardian]

We live in a diverse society. It should follow that workplaces reflect this in terms of ethnicity, gender, age, disability, sexual orientation and even attributes such as language and personality. Unfortunately, for some … diversity continues to be ‘just a buzzword’.

Luckily, this doesn’t have to be the case. If you’re committed to change, then a better, fairer workplace is within reach.

Why SMEs need diversity

The straight-up business case for diversity at work is compelling:

  1. Diversity improves performance

Research shows companies with more ethnic diversity outperform competitors by 35%. Those that achieve more gender diversity outperform competitors by 15%.

  1. Diversity is key to survival

Christie Lindor, top management consultant and Forbes Council member, argues that in the 21st century, diversity is key to survival: “Whether leaders want to recognise it or not, I believe a lack of diversity and inclusion in a corporation’s strategy can now be an indicator of its market survival.”

  1. Diversity brings innovation and opportunity

With more perspectives in your workplace – at all levels – the better equipped you’ll be to meet the needs of your customers or clients. Diversity will help you to:

  • Create better products
  • Spot new market opportunities
  • Improve innovation
  • Deliver better customer service

So let’s get started!

How SMEs can encourage diversity

As recruitment specialists, we often see that small and medium businesses that encourage diversity tend to attract, hire and retain the best talent.

Here are our top 10 ideas for SMEs seeking to encourage diversity.

  1. Understand why diversity programmes fail

Big business has tickled the edges of diversity for years … with relatively poor results. This Harvard Business Review reports that interventions that coerce and police managers to behave in certain ways are unpopular and ineffective.

Training to reduce bias, hiring tests based on ability, performance ratings for promotion and grievance channels all failed to increase diversity, in some instances companies became less diverse.

Avoid some of these pitfalls and focus on creating a culture where people choose to change their behaviour. For example, rather than training managers following a grievance, provide regular, optional training sessions for all. This means ‘doing the right thing’ becomes a positive, desirable choice. It moves from a coercive approach to a more inclusion, pro-active one.

  1. Acknowledge the issue and check your bias

You might encounter a view that ‘diversity is not an issue’ for your business.

This fails to acknowledge the implicit biases every single one of us brings to work. As humans we all have deep-seated attitudes, feelings, stereotypes and beliefs which impact how we operate at work.

If leaders in your SME all share certain biases, they will unintentionally create a workplace culture built upon them. As Reni Eddo-Lodge, award-winning journalist and author of Why I’m No Longer Talking to White People About Race explains:

“Structural racism is an impenetrably white workplace culture set by those people, where anyone who falls outside the culture must conform or face failure. “Structural” is often the only way to describe what goes unnoticed – the silently raised eyebrows, the implicit biases, snap judgments made on assumptions of competency.”

For ‘outsiders’ the workplace status-quo is an uncomfortable place to be. An implicit bias test is a powerful way to demonstrate to ‘diversity deniers’ the potential impact of bias at work.

By answering a series of questions, bias tests reveal a participant’s deep-seated stereotypes and attitudes. This can be an eye-opening experience, that helps people to understand certain actions they take at work, in a new light.

  1. Bang the business sense drum

If you meet resistance from some senior leaders, there are plenty of persuasive business reasons that will help them to think again.

For example, a study of 171 German, Swiss, and Austrian companies showed a clear relationship between a diverse management team and increased revenues from innovative products and services.

Your customers probably also want you to act. Research shows six in 10 younger people now consider a company’s ethical values and authenticity before buying their products.

If you need to build the strategic case for diversity, to gain senior buy-in, you may want to consider:

  • Compiling research examples on the impact of diversity in similar sectors/industries.
  • Revising your core company values, to put diversity at the heart of everything you do.
  • Profiling your customer demographic … if all your customers are female and under 30, perhaps this needs to be reflected more in your workplace?
  • Detailing how diversity enables key business goals.
  • Outlining practical actions that would apply to your workplace. 
  1. Build diversity at the top

In 2019, in the UK, women accounted for only 29% of senior management roles and only 6% of senior managers were from a Black, Asian or minority ethnic background (BAME).

SMEs have relatively small leadership teams therefore top level vacancies may be infrequent. In the meantime, this article includes practical actions you can take to build your potential candidate pool over time.

Diverse representation at the top is vital. Not only does it instantly broaden your business perspective, it also indicates to minority groups in your organisation that there’s room at the top for them.

  1. Attract candidates from a diverse talent pool

SMEs can fall into the trap of the ‘quick hire’ – choosing candidates from existing contacts or referrals from employees and friends. This sustains a narrow model.

Attracting diverse candidates through your door might take longer – but it will be worth it. Here are a few ideas on recruiting for diversity:

  • Be transparent: create clear processes for hiring and promoting on merit
  • Broaden your search: try networking groups, different job boards, alumni associations, events and other sectors
  • Be clear: if you want diverse candidates, say it clearly in your job advert
  • Communicate: using marketing that shows you’re a welcoming and inclusive workplace
  • Overcome bias: using techniques like blind hiring or the two in the pool technique

If you’d like to talk through ideas for adapting your current recruitment process, then remember we’re here to help.

  1. Nurture diverse talent

You can also recruit for diversity at a junior level and work hard to retain these employees. A mentoring scheme is a great starting point.

A study by American Express revealed that with no mentoring in place, only 35% of women believed they could reach C-Suite level. With a mentor, this grew to 49% and with a sponsor it became 61%.

Remember mentoring is a two-way process. Senior managers meeting regularly with mentees, outside their team, starts fresh conversations and challenges stereotypes. Mentors have just as much to learn.

  1. Consider a diversity taskforce

Bring together employees from different teams to collaborate on addressing diversity as part of a taskforce. This will get the topic out in the open, engage staff and explore solutions in the context of your business.

In the ‘90s, IBM, global leaders in diversity, used taskforces to great effect. They established eight executive taskforces – each focused on a key group, such as gender, ethnicity or sexual orientation.

By listening to the needs and challenges of each group, IBM leaders began to understand different challenges, issues and opportunities. This enabled them to develop targeted initiatives, to empower and support each group. The results have been significant, for example:

“The organisation has seen the number of self-identified gay, lesbian, bisexual, and transgender executives increase by 733% and the number of executives with disabilities more than triple.” Source

IBM also succeeded in opening up new markets. The women’s task force spotted an opportunity to work with SME customers, which had previously been overlooked. This increased service revenue by $290 million in just three years!

  1. Retain talent by meeting different needs

Launch initiatives and policies to support different employee needs and your retention levels will rise. For example, flexible working for all, parental leave and time off for religious holidays are simple fixes, which instantly make your workplace appealing to a broader spectrum of people.

Research by Catalyst6 revealed where flexible working is in place, 83% of women aspire to reach senior level, versus 54% in more structured environments.

  1. Create a culture of allyship

If an SME is not particularly diverse, employees representing the dominant group – for example ‘white’ or ‘male’ can become good allies, for minority groups at work.

A true ally invests time in supporting and listening to others, is accountable for mistakes and willing to do the work to change their behaviour.

Through HR policies and leading by example, you can create a workplace where calling out sexism, racism or homophobia is expected; where tolerance of these issues is zero. For allyship to thrive, speaking up at work must be actively encouraged.

  1. Measure diversity and be accountable

Your diversity goals will be unique to your business. By setting diversity and inclusion KPIs, senior leaders can be accountable for achieving them, within a set timescale. Some starting points could include:

  1. Running an employee survey to set a baseline measure of your current situation. This article from Survey Monkey has some great tips.
  2. Setting recruitment goals for diversity across all levels, including senior leaders.
  3. Setting goals to improve retention levels for minority groups.
  4. Setting pay objectives that deliver pay equality across all groups. 

Time for change

If you think it’s time for change in your organisation, then sharing our 10 suggestions with your colleagues is a great starting point.

With your help, diversity and inclusion have the potential to prepare your business to become more competitive, more resilient and – most importantly – a happier, more rewarding place to work, for all.

If you have the willingness to respond to the call from Black Lives Matter to ‘do the work’ … then there’s hope that we can succeed in creating a better, more equal world.

We’d love to help you recruit for diversity. We have plenty of easy-to-implement ideas, that are perfect for busy employers. Drop us a line.

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