Diversity in Europe: The Pause That Refreshes

In the midst of normal operations, it’s easy to kick the can on diversity and inclusion initiatives. Now, after the global pause, European firms have the chance to take a fresh look at how they’re approaching these critical issues.

While Diversity Charters across Europe now encompass some 16 million employees, in many areas there is still a great deal of work to be done. This past year, and perhaps again for several more months as conditions shift, firms have gotten the chance to experience a pause in normal business operations. Suddenly, instead of rushing to keep up with day-to-day concerns, there was the space to sit back and reflect on what was being done and what could be done a bit better.

In some cases, it was a time for celebration. In others, there was the recognition that different efforts were needed. In brief, here’s what firms across the Continent are grappling with as 2021 moves toward a close.

Gender equality progress is all too easily set back
Over the course of the pandemic shutdowns, more women than men left the labor force. More women, in fact, left the labor force than at any other time in recent history. A key reason? As schools shut down in-person education, the burden for continuing to support their children’s learning fell primarily on the female members of the household. Forced by inflexible policies to choose between full-time workloads and full-time family responsibilities, millions chose to put their families first.

In a matter of weeks, years… even decades… of recruitment and advancement of women in the workforce was erased. This, at a time when multiple nations are legislating that 30 to 40 percent of leadership teams and boards be made up of women. How can firms realistically expect to have available pools of talented women to take up these senior leadership roles when they are being pulled out of the workplace in such numbers?

There is no simple answer – but many possible areas where firms could approach things differently. First, allowing women with families to do more job-sharing or workload partnering to maintain an attachment to their organizations during the childrearing years, so that they are appropriately skilled up and available for advancement later in their careers. Second, being more proactive about offering support to women – with and without children – throughout all stages of their lives, so that there is less off-ramping of female employees at every organizational levels. And finally, continuing to meaningfully champion policies and practices of equality and equity so that problems of care and family management become everyone’s challenge and not “women’s work” to be borne alone.

Compliance is not the same as meaningful equality
Another big lesson of the last 18 months is that “letter of the law” compliance with diversity mandates does not necessarily equal having built a truly inclusive workforce. As the American Black Lives Matter movement brought multiple social justice issues into the global spotlight in new and noisy ways, many firms were surprised to find themselves on the defensive about their inclusivity and bias.

One element of this has to do with how firms are measuring themselves when they’re trying to measure up. For example, when a company reports that its workforce is 50 percent male identifying and 50 percent female identifying, that appears to be an environment of fairness and equality. However, when that is broken out to reveal that 80 percent of management is male identifying while 80 percent of front line staff is female identifying, the dynamics and biases of the firm appear quite different.

To make structural changes that truly and meaningfully change the culture of an organization, Diversity, Equity, & Inclusion (DE&I) leaders need to measure staffing in ways that matter. It doesn’t matter what the letter of the law dictates… measuring hiring, promotion, and executive teams according to the spirit of equality can yield the insights needed to show where biases remain or deeper changes are needed.

For change, there must be carrots as well as sticks
Compliance has, for too long, been the terrible stick held up to frighten European businesses into making progress on diversity metrics. Yet for structural change to happen in hearts and minds as well as on paper, there needs to be a different incentive structure in place beyond merely threatening “do this or else” all the time.

According to reporting by MarshMcLennon, fewer than 10% of firms are linking diversity and inclusion to executive incentive systems. Mercer’s Global Talent Trends 2021 report notes that just 12% of companies are measuring how they can correct underlying pay equity and inequality issues. Yet nearly 60% of firms say they have set up a DE&I Council or advisory board.

Clearly, committees and councils, though valuable, are not valuable enough to the executives who dictate the day-to-day behaviors of their companies. As a result, if firms are truly committed to shifting metrics and changing the internal culture, it’s time to put cash on the line and link these issues with performance plan incentives so that C-Suite leaders and other senior contributors are motivated in every way to do the right thing.

In short, DE&I should no longer be viewed as a short-term or standalone venture for European firms. Having now had the chance to take a business pause and reflect on what’s been done and what can still be done, there are issued that need to be addressed. None have an overnight solution, but by being intentional and incorporating change planning with incentives, this could be the time when firms across Europe make the most of their pause to improve themselves and change the world.