How advisers embracing diversity and inclusion will be key to helping the country to ‘build back better’ after the pandemic
As events in 2020 have unfolded, they have propelled diversity and inclusion further up the business agenda, despite the threat hanging over firms from the Covid-19 pandemic and the raft of issues posed by Brexit.
We are still in the middle of a global pandemic that has impacted our society and economy at its core – businesses shut or closed for good, millions unemployed and looming issues of financial insecurity, should there be a second wave. More than ever, protection insurance and professional financial advice will be key to helping individuals and businesses alike recover from the catastrophic effects of this crisis and, in fact, have already supported millions through the worst parts of the pandemic. But at the heart of the rebuild that is to come, there lies an opportunity to deliver meaningful change and to truly broaden access to advice for those who need it most.
Therefore, the priority should be the equality and fairness, of ‘levelling out’ – a theory that government and many businesses are now overtly espousing. It is not only an issue of morality – it is necessary for the attraction and retention of both clients and talented employees, and importantly, gives firms large and small the best chance of recovery after the Covid-19 crisis, enabling them to ‘build back better’.
Dame Helena Morrissey, founder of gender equality campaign group the 30% Club and former CEO of Newton Investment Management, recently said: “This is not just about equality and about treating people fairly, which is of course important in all of this, but it is about getting better creativity, the best thinking, about making the right decisions.”
Let’s tackle this question: “Why should my business, care about diversity and inclusion?” Well, here’s why: because apart from building a fairer society, diversity and inclusion policies are good for business.
According to a 2018 report by McKinsey, gender diversity in leadership and business teams is strongly correlated with profitability and value creation. As for ethnic and cultural diversity: “Companies with the most ethnically diverse executive and business teams – not only with respect to absolute representation, but also of variety or mix of ethnicities – are 33% more likely to outperform their peers on profitability.”
But first let’s establish what we mean by diversity and inclusion. In our industry and profession, as in others, by ‘diversity’ we refer to all the unique characteristics that make us who we are: personality, lifestyle, work experience, ethnicity, age, culture, visible and/or non-visible disabilities, health conditions, gender and sexual orientation. ‘Inclusion’ in essence means respect. Respecting, valuing and considering the different perspectives, styles and needs of people, of clients, of colleagues.
Secondly, and importantly, we should always be cognisant of intersectionality – as consumers, clients and colleagues will all exhibit any number of these characteristics.
All businesses need to attract, develop and retain a workforce that reflects the diversity of the communities in which they operate and serve, because having diversity within their teams will allow them to better engage employees, understand and serve customers, strengthen employer brand and generate creative ideas. This – the understanding and pooling of people and risk – is the very reason why the UK insurance and personal finance professions have succeeded through the years, decades and centuries.
But even businesses without a large staff footprint can still benefit from embracing diversity and inclusion principles, as it leads them to a better understanding of the needs of new and potential clients.
More than this, embracing diversity, inclusion and intersectionality principles gives businesses strategic advantage, aiding them to:
1. Anticipate and meet customer needs in an increasingly diverse and volatile marketplace.
The more employees either reflect or acknowledge the diversity of the business’s customer base and consumers, the more they will be able to understand and integrate the diverse needs and sensibilities of its customer base and integrate them into business solutions. Propositions and services developed will then be more accurate and therefore deliver a tailored service in line with market and customer needs.
2. Better innovate and develop creativity.
Gender- and ethnically diverse teams outperform monoculture teams by 35%, according to a popular 2015 McKinsey report on the topic. But also, a 2012 study by Credit Suisse Research found that big companies “with at least one woman on the board have outperformed their peer group with no women on the board by 26% [during] the last six years”.
For those this applies to, it means the diversity of your teams will be a source of innovation and creativity and open the door to new perspectives, due to the diversity of their cultural, life experiences and backgrounds, as well as the diversity of professional skills and lived experiences.
33% COMPANIES WITH THE MOST ETHNICALLY DIVERSE EXECUTIVE AND BUSINESS TEAMS ARE 33% MORE LIKELY TO OUTPERFORM THEIR PEERS ON PROFITABILITY
3. Attract, retain and develop the best talent.
Diversity and inclusion is not a ‘nice to have’ it is a ‘must have’ for both large and small firms, as younger generations will choose organisations where developing diverse talent is a priority.
By promoting a diverse workforce and driving an inclusive culture, firms will create a positive dynamic for people to thrive and outperform in their roles, by giving them the possibility to use their full capabilities. They will also attract the best individuals from both traditional and new talent sources, while retaining and increasing the engagement of employees.
4. Improve our customer and colleague communication and engagement.
This should sit at the heart of any business, big or small, as communication is not simply about the ability to speak but also the ability to hear and understand what is said to us and empathise.
This is central to mutual respect and human dignity, as well as improving equality of access and opportunity. The Royal College of Speech and Language Therapists recently commented: “Millions of adults and children across the UK have communication difficulties, with one in five of us having a communication issue at some time in our lives.”
This includes people with a range of conditions including cerebral palsy, learning difficulties, autism, hearing impairment, stroke, brain injury, head and neck cancers, Parkinson’s disease, dementia, amongst countless others.
If a business recognises this and is able to ensure its communications both to current and prospective clients are inclusive, they will be able to capture a wider pool of business, which is particularly important to support the economic recovery effort.
5. Reinforce commitments as responsible corporate citizens.
Having a diverse workforce and outlook, and driving an inclusive culture, allows us to reinforce commitments as responsible corporate citizens, as well as to promote a positive, tolerant and open mindset within teams and/or with customers.
One major impact of the pandemic has served as a reminder of how fragile people’s finances really are and, in some ways, has shifted the goalposts of successful engagement.
Those who may not have traditionally thought about their financial resilience, for example younger people, will need all the support and advice they can, as statically they make up a large proportion of those who have been hit hardest by the economic and social effects of Covid-19.
This serves as just one example where that corporate citizen attitude of helping to build better foundations for the future, aligns well with what is best for the future of your business’s viability. Keeping up with market trends, meeting new and diverse needs and shaping the way you communicate to reach new people, are all part and parcel of accepting diversity and inclusion, even if you yourself do not have a workforce to think about.
Ultimately, embracing diversity, inclusion and intersectionality is essential in earning and retaining consumer trust; to enabling the insurance and personal finance professions to play a leading role in helping the nation build back better and stronger; and in delivering on our social purpose and the values that sit at the heart of the CII’s Royal Charter.
We all have our part to play, but the personal finance profession has a unique opportunity to help shape a stronger, fairer society.
Shayne Halfpenny-Ray is policy and public affairs adviser of the PFS and Johnny Timpson is financial resilience & protection insurance specialist at Scottish Widows