Workday Podcast: Diversity and Inclusion: Closing the Strategy Gap

Anja Fordon: Global trends such as quiet quitting or the Great Resignation have raised awareness of the general wellbeing of employees and companies. In addition, we are in the midst of a profound change in the world of work, of which the conditions are still being negotiated. The link between increased productivity and increased revenue through more diverse teams has long been accepted. However, diversity, belonging, and inclusion, D&I, initiatives also increase employee wellbeing. But while there is a lot of hopeful news in terms of progress for diversity, equity, inclusion, and belonging, we see backlash as well, as companies struggle  to move from good intentions to measurable outcomes and lasting change. So what can you do about that? Well, I have great news for you, because on today's episode of the Workday Podcast, hosted by me, Anja Fordon, I am happy to welcome Daniela Porr, solutions marketing lead at Workday. She was one of the main drivers behind a recent Sapio study that has been sponsored by Workday, and she can tell us more about the burning questions many HR and business leaders in general, have on their mind right now. Hi, Daniela. So happy to have you here today.

Daniela Porr: Thanks, Anja. I'm so happy to be here. Welcome, everyone. Thank you for having me.

Fordon: Well, let's dive in. First of all, would you mind telling us a bit more about yourself and your role in getting the study moving?

Porr: Absolutely. So I'm part of the solutions team here at Workday. And my role, in short, is to build bridges between our customers and our internal teams, at the end of the day, ensuring that our belonging and diversity solutions continue to support companies around the world in building a more inclusive, diverse, and equitable workplace, creating a culture of belonging for workmates everywhere in the world. One of the things that help us do that with solid insights is to run research. At Workday, we really want to get to the bottom of things. What are the trends and opportunities for diversity, equity, inclusion, and belonging, and how do companies approach this? What do they need, what works, and what could work better? Where are we going from here? What really moves the needle? So this is why, for the second year in a row, we went out with this research, the global blueprint for belonging and diversity. And personally, I believe I can see proof of the fact that companies who mean business with belonging and diversity really do better business. And that's why it's so important. It's good for businesses. It's good for the people in businesses. And if you're able to unlock the transformational power of diversity and inclusion, your business becomes more resilient, more innovative, and more successful.

Fordon: What everybody wants. I think that sounds great. Can you give us a bit more background on the study itself?

Porr: Absolutely. It's one of my favorite topics in the world, so yes, I'm happy to do that. So we went out and started this study in collaboration with Sapio Research, as you said in your introduction, and EW Group, a diversity consultancy. And we conducted the study across 23 countries with more than 3,100 respondents. And we have a really good mix across industries and company sizes. So it's a solid piece of insight, a solid piece of data, and I'm sure you want to hear a little bit more about what we found. So shall I give you an overview of the key findings?

Fordon: I cannot wait to hear that. I was waiting for that, so, please.

Porr: Okay. Let's go. Let's go. All right. The key insights at the highest level are really positive, and they give us a lot of hope. And that is something that-- I said in the beginning, we've done this for the second year in a row. And for the second year, we see that there's a hopeful trajectory. So first of all, you mentioned in your intro that diversity, inclusion, equity, belonging, and well-being are interlinked. And luckily for you, I can confirm that. So one of the things we looked into is what drives companies to invest in diversity and inclusion. And more than 40% say that they do it with the well-being of their workforce in mind, then very closely followed by things like the need to attract and develop a diverse workforce and to positively impact employee engagement. But well-being really is at the top of the list for drivers for this sort of investment and commitment, actually. And that isn't very surprising because the effects are clear. And also, we still see very high rates in terms of stress in the workplace, burnout throughout the pandemic and into today. So it's not very surprising, and we do see a good mix of well-being drivers and business drivers.

What we also learned is that-- and that's the very hopeful news, that investments in diversity, equity, inclusion, and belonging continue to be strong. More than 75% have a budget for diversity and equity initiatives, and more than a third plan to increase those budgets. So the investment is there. The commitment is there. And we have even seen, in the last year-- so this is data from mid to end last year, and we've even seen an increase in roles. So 60% report they have added more roles to their diversity teams, which means that we are going from a commitment and an understanding that this topic is important, which is what more than 90% of companies worldwide say. It is an important topic on the C level, but we see that translated into investment. And at the end of last year still with the plans to increase budgets for the coming financial year. Now, that might change as the economic climate continues to change, but we can see that this topic does not go away. So that's all hopeful news. Are you ready to hear what isn't quite as hopeful and where we need to do more work?

Fordon: Yeah. Absolutely, absolutely. Because what I can hear here, and tell me if I'm wrong, but one of the main positive things here in general - let's sum it up - is the importance is clear, and the executive teams in the organizations understand the importance of equity, diversity, and inclusion, and belonging. And they have invested in infrastructure. But yeah, how does it actually play out in the everyday lives or in the company's realities or what you said, one is not so great?

Porr: The reason why we need to talk about what doesn't work so well yet and how does it play out in real life is so we can become better. So I'm not here to make you upset. I'm here to say, "Here are opportunities." And the big, big opportunity in front of us is that almost every company out there says, "We see the importance, and we celebrate diversity. Our executive teams see it." However, when it comes to be kind of more strategic, there is a way to go. That is the opportunity in front of us. Only 20% of companies worldwide actually measure the impact and value of what they do. So most of the companies out there are doing something, whether it's positive action, they create special days, they do training, and many other actions. But only 20% measure whether that has an impact and whether the value of this is perceived. And about 40% actually say they don't have a strategic approach to that. So they might take some action, which is to be celebrated, and that is great. And I'm sure that is something we can all agree on. However, there's such a huge opportunity in becoming more strategic. And if you compare that to any other initiative in your business, if you agree something is of the highest importance, the first thing you will probably do is make sure you've got the right insights, you've got good and solid databases, and then you form a strategy for the next steps. And then you continue building against that strategy and making it better. We don't see that to that degree for diversity and inclusion. And I think that is the opportunity ahead of us, becoming more strategic, making diversity and inclusion more evidence-based, and treating it like any other key business process that you run in your company.

So basically saying, "Let's promote diversity and inclusion." And the key piece to do that is to actually look at another thing that was startling to me when I looked at the results of the study. And that is that companies say that tracking data is very challenging. More than 60% say that recording DEI data is a challenge. And I'm not very surprised by that because it's hard. It's very sensitive, private data, especially if you take this effort global. You deal with different cultures and different compliance frameworks. Yes, it's hard, but I actually think getting smarter with the data will help to become more strategic, and in turn will help move from commitment and action to strategic action, evidence-based strategies, and true progress.

Fordon: So wow. So what I'm hearing is there is a lot of action going on in companies already, but what is this actually? What are they actually doing? Daniela, can you tell us a little bit about that as well?

Porr: Yes, yes. Actually, we did have a question about that, so I can tell you more about it. So as I said, companies across the world are taking a lot of action. And the first thing I can tell you is with what sort of frequency does that topic turn out. So we asked, "Is that something that you just mention once a year, maybe when there's something to celebrate or a day to commemorate or an important milestone is hit, or is it a regular topic? Is it something that is embedded in the culture and being of your company?" And actually, 45% of companies say that it gets regular company-wide attention, which isn't too bad a number, I would say. But 50% only give occasional or no attention at all to the topic, for example, in wider company or team things. I think there's huge potential here to almost normalize this and make it a regular topic to talk about and ensure that is-- it's just a way to do business. It gets ingrained in the company culture. And I realize that's a marathon, and it isn't easily done. But the numbers are split. About 50% say it's a regular topic, and 50 say it isn't. I'll answer your question and say what do companies actually do outside of that frequency of having that topic being there, being apparent. So most companies, and that is encouraging to see, do some sort of action around encouraging diverse applicants, making their recruitment processes more equitable. And a lot of companies also invest in diversity, equity, and inclusion training. And oftentimes, that is for middle managers or for the whole workforce. We also see a lot of positive action to support development and promotion for all, campaigns and awareness raising. And a little bit less than a third of companies worldwide actually work with voluntary employment networks or belonging councils or support groups. That is a number that I think starts to grow, and it's the idea of doing truly employee-centric work and involving everyone in the work of bringing diversity and inclusion forward. We also see more mentoring programs, celebratory days or events, and ally programs. So across the board, there's a lot of action going on.

Something that we also asked is, "How do you share information, specifically when it comes to an important topic, and that is pay and compensation equity?" And that is where we learned less than a third, only 27% worldwide, actually share pay and compensation-related data with their employees. So when it comes to that very important trend of creating pay equity, transparency's still lacking in many companies. But many are on the journey to change that. So that was a lot of information, lots of action going on with changing frequencies and changing awareness across the board. And I do think a huge opportunity is to look at how you're sharing information and with whom you're sharing information and how that shows up in terms of transparency, specifically when it comes to pay.

Fordon: Yeah. There is, of course, so much more work to do. But to be honest with you, it makes me quite happy to hear that. I mean, in the world that we are living in right now, there is a sense of hope that I can hear here that there is action being taken and that there is an actual understanding of-- not just an understanding but actually doing. Is there also already-- are there already answers towards what successes look like when companies actually have these actions going on?

Porr: Sure. So I agree with you, and I'm happy this makes you happy and you see some hope. And you're right. There is commitment. There is investment. And as I said before, we can see that in the number of roles, in the increasing investment, and in the number and sheer volume of action. In terms of success, it's really difficult to say because, as I said in the beginning, this is where it gets tricky. Companies, as they mostly don't approach it in the most strategic way and they don't measure progress, it's really hard for us to say, "Okay, we've made it. We are 75% there." There's no number I can give you there. But what we know from our heartbeat reports where we actually look at what employees worldwide are saying, diversity, equity, and inclusion continues to come up high where people say how they are feeling at work. So there's still a lot of people who leave their workplaces because of issues with diversity and inclusion. There are still a lot of people who don't feel fairly treated. So if you combine the output from this study with our insights into belonging sentiment and employee sentiment, we can say that there's still quite some way to go. And I think most diversity managers around the globe would agree with me that we are working in a climate with a lot of backlash and a lot of question marks, and the work hasn't been becoming easier. On the contrary.

And again, I don't want to end this question on a negative note. So again, I think the answer to that lies in that strategy gap that I've explained earlier, the fact that we have commitment, we have investment, and we have started in such a good way. Now, to bridge that strategy gap and get to a more strategic, more evidence-based way to go about diversity inclusion, I honestly think that data piece can help make a difference. Getting more insight will help tell better stories, will help convince the minds and hearts of not just the executive teams, but also your staff. And that's an interesting piece of data I actually do have from our study when we asked, "What do you need to make true progress?" And we've asked that question the year before. And in both years, about a third said, "I need more buy-in. I need more commitment from my executive team." And that's not surprising. Everybody always wants more investment, more commitment. Nobody says, "Oh yeah, I don't need my executive team to buy in. They don't need to support me." Obviously, that is a very common answer.

The other third, and it's about the same number every year, say, "In order to make more progress here, I need staff buy-in. I need the people in my company to be on the journey with me. I need to convince them. And that also means I need to build that trust for them to enter their data via self-ID, to join ally groups, to join [inaudible] councils and employee [inaudible] net worth." This needs to be not just an executive management effort, it needs to be a company-wide effort. And in order to win the hearts and minds of everyone, you actually need to be able to tell the story. You need to be able to have some data-based evidence and from there, tell the story of success. Tell the story of teams who became more diverse and thus had more success. Tell the story of managers who looked around themselves in the room and said, "Oh, my God. How is it possible that we only have men in this room? Let's change that." Let's change the stories that we're experiencing at work, and by telling those stories, change the hearts and minds of the people. And you need some data for that, and you need some convincing storytelling for that.

Fordon: And when we talk about data, this is obviously a topic-- you just mentioned it before. You need the buy-in from staff as well because it's personal data, maybe. Or what kind of data actually is it? And that's basically my question that I would ask you next. What would you suggest what kind of data companies can collect, I don't know [laughter]--

Porr: Is it may, may not?

Fordon: May not look at and collect.

Porr: Yeah. We could do a whole podcast just about the challenges of diversity data. And maybe we want to do that in the future. Maybe. But in short, I think it's definitely a topic that companies are struggling with, and they tell us so in the study. But there are some routes to success, and one is to look at what you want to correct and why. So start with the why. That goes for people, analytics, data generally. Ask your questions with the use cases at hand. Why do I want the data?

And then for diversity, equity, and inclusion, I think there's mainly three different buckets of data. The first one is the one that we all tend to think about first, representative data, demographics. So what we find important at Workday is that we don't just look at the simple numbers, for example, gender, number of women, number of women in leadership positions, but to also look into intersections. So most of our tools are able to actually go into intersectional information where you can combine, for example, gender and ethnicity or gender and nationality or gender and age and from there, really understand what is it like? What is the experience of working in this company like for women of color versus white men? What is this experience like at your company when it comes to promotions, to equal access to opportunities, to your recruitment experience for women of color versus white men, or maybe for people with caretaking responsibilities versus people who don't have caretaking responsibilities. And as soon as you start looking into its intersections, this combination of two dimensions, the picture becomes much clearer, and you see stuff that you haven't seen before. When it comes to demographic data, typically, companies look at gender, age, ethnicity and race, mental and physical health, but we do see a trend that is up and coming around socioeconomic background, which is also important to measure, and companies are starting to measure this more and more. So that's the first bucket. With presentation, as I said, if you do it well, you can look into intersectional data too.

And then the second bucket is measuring inclusion and belonging. Not just looking at simple representation numbers, which is important, but then going that step further, going beyond, looking into how well do people feel like they are included? And how do they feel, and what is their sense of belonging? And that is something you can actually also measure. It is hard data that is about softer feelings, but it's as measurable as [inaudible]. Do women in Germany feel different than men in the US? What is their sense of belonging? Do they feel like they have a say? Do they feel like they have access to promotion and development? And that's a huge opportunity to combine that data to get that holistic view of representation demographics and belonging and inclusion sentiments. And from our study, going back to the data in the study, less than a third of participants in the study said that they are doing some sort of sentiment survey, and if they do, it's like a once-in-a-year thing. Whereas what I see working and what I see a huge opportunity is having that continuous listening, that continuous data. Because if you would've asked me about a year ago how I'm doing as an employee, it would've been very, very different to how I feel today.

Fordon: You're right, yeah.

Porr: Right? You could have moved. You could have had a different manager. We were in a different phase of the pandemic. Everything is changing constantly, and just listening once a year doesn't do the trick.

Fordon: Yeah, that makes sense, absolutely. You are so right. When I look back, I think not only once a year. My emotions, my feelings, probably change at least once a month. Or maybe when it comes to work, I think we all experience that, so having a continuous check in, so to say, that is [inaudible]. 

Porr: Definitely. And our workplaces, our environment is changing quickly. The economy is changing quickly. Our workplaces are changing quickly. We need to keep up to date with all of that.

Fordon: We need to check in, absolutely. And so what role does technology play there? Can it help with doing so, with having this regular touchpoint?

Porr: [inaudible], yeah. [laughter] Yes. Definitely, yeah. That won't be a surprise to you. I'm equally passionate about diversity, inclusion, and belonging as I am about technology. And luckily, this study gives us some data points to look at that. So a lot of companies are using technology for their diversity and inclusion programs. More than 90% use some sort of technology. However, there is opportunity still ahead of us in terms of what use cases we can use technology to and how frequently we can use it. So many use some sort of internal communication tool, which speaks to my point of saying you need to get everybody on the journey. You need to build that trust. You need to communicate what you're doing, why you're doing. So that's intranets, instant messages, chat tools, all of these things. The second most frequent use case is talent management. So that is helpful news because if you embed diversity and inclusion in everything that you do across HCM and talent management, that is how you move the needle. It isn't a niche effort. So we see touchpoints with talent management, with skills, with expanding talent pools, internal mobility. So companies, to a degree, are using technology for that. And then next up is surveys to understand the diversity composition of the workforce and after that, employee engagement and recruitment tools. So the use cases are there. What I found surprising that reporting and analytic solutions comes very low in the list of what companies are using. And that brings me to my favorite topic, the strategy gap that I think will bring the companies forward to making all this hard work in diversity and inclusion pay out, closing that strategy gap with a more analytical approach to then actually come to the point where you can move from commitment to outcomes, measurable outcomes, from actions to strategies and strategic action. So that is, I think, an opportunity that companies can still embrace more.

Fordon: You know what? When you talk about this, I just was thinking you have to remind me later on that I fill out my survey after this.

Porr: Your employee survey? Yeah.

Fordon: Yes, exactly. But before we come to an end-- because we have to, unfortunately. Time is running against us. But before we do that, what is your closing remark, Daniela, for leaders that want to learn more from the study?

Porr: Absolutely, yeah. So my first remark to you is I don't have to remind you about your employee survey because you will get a chat message reminding you. It's all automated.

So that's how technology can help. So I won't remind you. [laughter] I let technology do that. So for our listeners, that tells you something about us at Workday. We are actually using technology to help with that and to continue [inaudible]. My closing remark to everybody else is first of all, thank you for giving this topic attention. Thank you for continuing to invest in diversity, inclusion, and equity. It's a marathon. The going doesn't get much easier as the world changes around us. I can see so many companies making big and bold strides and starting to, as I said, promote diversity, equity, inclusion, and belonging to a more prominent place and a more embedded place in the company. And we can see that. We can see it works. We can see that it doesn't only work, it actually pays out. It's worth the work by making this more strategic, more evidence and data based. The going can actually get easier. And we all know it's a tough job against many obstacles, but it gets easier if you strategize up, if you get the right data, if you keep on convincing your employees to join you on that journey on giving you their trust. And then we see companies become more resilient, more successful, and more innovative. So my last remark's probably thank you for doing that, and thank you for being on the journey with so many other companies in the world.

Fordon: I love that you're actually thanking everybody because I think that is exactly what we need, more encouragement, and just to feel good about what we're doing here because it's such an important work. Thank you. It was an absolute pleasure talking to you today, Daniela, and the topic is really dear to my heart as well. So I'm very, very happy that we had this time today.

Porr: Thank you so much, Anja, and have a great day, everyone out there.

Fordon: That's all for today. But if you have enjoyed the show, I hope you're going to subscribe at Spotify, Apple Podcasts, and SoundCloud. You can also find us at the Workday blog and read more of our stories. Thanks for listening, and have a great work day, everybody. Bye.