Diversity and Inclusion Policy: Key Factors for Success

Introduction

Diversity management programs have been introduced across numerous public and private organizations both nationally and globally. There have been different aims for introducing diversity initiatives — among them increasing women's and ethnic minorities' participation within the workplace, helping organizations reach new and untapped markets, and incorporating wider decision-making perspectives (Lorbiecki & Jack, 2000). However, the success of these initiatives has not always met expectations. With such notable aims, it is worth examining why some programs work so well and others fail considerably.

Cao, Clarke, and Lehaney (2003) posit that organizations do recognize ever-increasing global competition and rising customer expectations. It is for this reason that some organizations opt to develop a diversity and inclusion policy. Such a policy is meant to offer the organization an opportunity to change and transform how it conducts operations. Unfortunately, the implementation of these policies is often rushed, and many managers do not fully understand the true meaning of diversity. Failure to consider the vital factors for diversity and inclusion results in a policy that looks good on paper but cannot be meaningfully implemented.

Global organizations need to understand the differences in diversity across the countries in which they operate (Derven, 2014). This requires organizations to perform due diligence in order to build an inclusive and diverse workforce. Diversity is vital for the success of organizations. With an effective policy, an organization can protect itself against costly litigation and compensation claims, and it will also experience reduced staff turnover. Reducing staff turnover ensures that the organization lowers its hiring costs and attracts the right talent (Pless & Maak, 2004; Williams & O'Reilly III, 1998). An organization will also enhance its image and attract both customers and potential talent. The current business environment is global, and for an organization to embrace global commerce it must also embrace diversity and inclusion. This allows the business to compete globally by better understanding different market segments, while also improving customer interactions through a diverse workforce that can engage with customers from varied backgrounds (Cao et al., 2003; R. R. Thomas, Russell, & Schumacher, 2001).

There have been numerous studies conducted regarding the importance of diversity and inclusion. However, there are gaps in the research, particularly when it comes to the factors organizations should consider when developing their diversity and inclusion policies (Gilbert & Ivancevich, 2000; Kreitz, 2008). The relative lack of this information makes it difficult for organizations to develop policies that will guarantee the success of diversity and inclusion efforts. The aim of this research is to uncover the different factors that should be considered when an organization is developing a diversity and inclusion policy. These factors are vital and may differ depending on the objectives of the organization. With this information, it will be easier for organizations to identify how they can develop effective policies that result in positive growth (Pless & Maak, 2004).

The research questions guiding this study are: What are the factors to consider when developing a D&I policy? What factors contribute to the development of a successful D&I policy? The objective is to fill the gap currently present in the literature. Information is lacking regarding the factors that organizations should consider when developing diversity and inclusion policies (Kreitz, 2008; Shore et al., 2011). This research aims to fill that gap by identifying the vital factors organizations should consider. There are both success stories and failures in D&I implementation globally, all of which can be attributed to the policies that have been developed.

Theoretical Background

According to Farndale, Biron, Briscoe, and Raghuram (2015), with the continued increase in the number of women and people of color joining the workforce, diversity has been a keen focus of research in the United States. In many instances, when organizations address workforce diversity they do so in order to comply with government regulations rather than to add genuine value to their organization (Knights & Omanovic, 2015; Miller, Mills, & Mills, 2009). This results in a failure to implement meaningful change, since the proposed changes are not aligned with the organization's goals (Cao et al., 2003; Lorbiecki & Jack, 2000). Implementing diversity policies solely to meet regulatory requirements will not automatically result in greater inclusion for minority groups (Milliken & Martins, 1996), nor will it result in the organization gaining more customers.

Organizations must recognize that while they have a requirement to follow regulations, they should also develop policies genuinely geared toward meeting organizational goals and building a more inclusive workforce (Sabharwal, 2014). The policies developed should not be one-time statements of intent. They should be refined over time, with continuous reevaluation to establish whether they are working. Policies should not merely state what an organization intends to do; they should contain features and mechanisms that require the organization to actively work toward achieving its stated objectives. Timelines should also be included to ensure that the organization remains accountable in its pursuit of diversity and inclusivity (Lorbiecki & Jack, 2000).

Change should come from all levels, and the first step is securing management buy-in for diversity and inclusivity. Policies will be good and implementable only if stakeholders are willing to act on them. For an organization to reap the benefits of diversity and inclusion it must put in the work — aligning its organizational goals with those of diversity and inclusivity. It has been posited that most organizations have attempted to implement workplace diversity; however, some have succeeded while others have not (Williams & O'Reilly III, 1998). These differences can be attributed to the factors included in the diversity and inclusion policy. A policy that is overly broad is likely to fail because there are no clearly defined parameters to guide implementation or evaluate effectiveness (Theodorakopoulos & Budhwar, 2015).

As Theodorakopoulos and Budhwar (2015) indicate, managing diversity is a challenge in its own right. Organizations will create policies and attempt to implement them, yet those same organizations often fail to sustain their efforts in managing diversity and inclusivity in the workplace (Derven, 2014; Wheeler, 2001). Diversity and inclusivity must be treated as a key strategic goal in order to receive the sustained attention they require. There are numerous recommendations in the literature about how to improve diversity and inclusion management (Wheeler, 2001), yet the performance of diversity initiatives has not kept pace with the volume of available scholarship (Tatlı & Özbilgin, 2009). This may be because most organizations — and most research — have concentrated on the importance of diversity and inclusion rather than on how an organization can implement it successfully.

The environments in which research is conducted and the applicability or replicability of findings are additional challenges. Organizations differ, and a strategy that worked in one context may not transfer across geographical or cultural borders. Therefore, there is a need to examine the specific factors within a policy and determine how best to implement them for a given organization. This may also mean that an organization will need to make significant changes to its strategic and operational goals. Understanding the factors that should be considered when developing a diversity and inclusion policy is vital (Kochan et al., 2003; D. A. Thomas & Ely, 2001), as it will allow organizations to focus on what will work for them and make the appropriate changes. As researchers at Harvard Business Review have long argued, diversity and inclusion require genuine commitment from all stakeholders, beginning with the development of policy itself.

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