What is the Risk of Not Being a Company of Choice?

By Jessica White Hall, Simpactful Chairperson

Diversity, equity, inclusion, and belonging (DEIB) initiatives have been established within business and industry for over 50 years. However, today’s DEI landscape is rapidly changing. “A strong sense of purpose and commitment to stakeholders helps a company connect more deeply to its customers and adjust to the changing demands of society. Ultimately, the purpose is the engine to long-term profitability” – Larry Fink, CEO, BlackRock in his 2020 letter to CEOs.

This month’s “both sides of the desk” article captures our CPG Expert perspective and includes interviews with Retail Executives led by Tanya Hines, former VP, Clarios and Procter & Gamble, and current Senior Consultant with Simpactful.

Executives and senior leaders have always had to contend with numerous challenges. That’s even more true in today’s environment when you add concerns like cyber security, hyperinflation, and a pandemic. The risk that often follows this tug-o-war is a lower emphasis on culture, social change, diversity, equity, inclusion, and belonging – prompting employees and potential new hires to make different choices about where to spend their work lives.

Being an employer of choice is more than having an outstanding brand but also creating an attractive and inclusive work environment that entices people to want to work there. It gives access to the best talent and, consequently, very qualified employees. This access has likely never been more important as today – given the labor shortages, the great resignation, and the re-evaluation of life’s priorities.

Thinking specifically about DEIB, we know that diversity becomes unglued without inclusion. Creating a safe environment and a sense of belonging for all employees are the most desired outcomes for DEIB. Today, employees, especially Gen Z and BIPOC, grade companies on these outcomes. There is also a sizable gap in how senior leaders perceive the success of DEIB in their companies compared to the balance of employees. It is vital that leaders look to close this gap if being a company of choice, which is tethered to business growth, is the objective. DEIB must be seen as a strategic imperative embraced by, measured, and rewarded for everyone. In many cases, it requires a leadership reset.

A Vice President for Inclusion and Diversity at a Top 50 Retailer shared, “For us to be effective, diversity must be in everybody’s stuff, representation at all levels, pay equity, and leaders who create an inclusive culture within their respective organizations. There is a bit of dissonance from the standpoint that some leaders view diversity as a competitor vs. a collaborator.”

At Simpactful, we’ve worked with many clients in the DEIB space. One of the questions we are often asked is how and where to recruit diverse talent. A more compelling question is how to become more attractive and lure the desired people to you.

Companies are being evaluated and graded.

Tanya Hines shared, “DEIB has a tremendous influence on economic growth. DEI&B solutions and strategies must be informed by insights from diverse people and experts. As companies compete in the U.S., it will be imperative for leaders to understand and deliver against a different set of drivers critical to DEI&B success i.e., addressing disparities, managing diverse talent pipelines, pay equity, and employee experience.”

A VP, Human Resource Partner at a Top 20 Retailer went on to say, “Relationships are how we base our business model. Diversity is a strategic focus embedded in every part of our business. Leadership competency will now include diversity. Diversity should start with our top officers and reach down to our hourly employees and unions.”

Consumers and shoppers are demanding more, and the downside is greater for retailers that don’t demonstrate equity and inclusion. More than 60 percent of African Americans say they have experienced racial discrimination inside a retail store, and half have experienced racial discrimination when making a purchase (Journal of Consumer Affairs, 2019). The leading retailers aren’t just posting about these types of injustices, they’re acting and embracing the role they can play. “Companies can’t play a bipartisan role anymore; they must make a stand for their employees and customers. We see that Gen Z, Black and Brown customers care more about purposeful companies and mission.” – Senior Buyer at a Top 10 Retailer

The risks associated with failing to be a company of choice are high. When top diverse talent declines to work for companies, there is a loss of creativity, innovation, and growth. “Companies need diverse talent, lacking this talent could lead to execution risks, shortfalls in customer service, and potentially company reputation issues,” Hines added.

“We need representation and accountability to ensure we reflect the customers and communities we serve.” (Director of Executive Search and D&I Recruiting, Top 30 Retailer) Therefore, it is important for companies to understand their current state and benchmark versus best-in-class.

Interested in learning more? At Simpactful, we use a “Good, Better, Best” model to help clients assess where they are on the DEIB journey and what actions, for both leaders and employees, will propel movement along the ongoing continuum. Collectively, our experts have over 100 years of experience and we leverage that to offer both comprehensive and targeted approaches based on a company’s needs and objectives.

Are you a company of choice?
Do you desire to be a company of choice?
Do you know what is needed to become a company of choice?