Why spending £5.5 billion a year on diversity won’t advance racial equity in the workplace

£5,560,000,000 – the staggering global spend on racial equity and diversity programmes every year. To put it into perspective, that’s over £10,000 every minute.

Anti-bias training, D&I hiring practices, focus groups, internships, reverse mentorship schemes and company-wide surveys—the budgets have been ring-fenced and the anti-racism programmes are in place. The only thing missing is the results.

Instead of discussing racial equity as an emotional issue, it needs to be tackled like every other business problem. Tools need to be put in place to gather the evidence, identify the problem, pinpoint key metrics, and proceed with unrelenting focus to meet clear goals.

This is how businesses achieve their corporate objectives. So it will come as no surprise that corporate racial diversity and equity efforts are currently failing because they are not using effective tools and data to drive decision-making and measure performance.

Just think about it. To spend any money, often the business case and justification process is onerous. So, why aren’t EDI budgets receiving the same amount of scrutiny as other business costs? Here’s what we’ve found:

  1. Organisations are unsure what to do but want to be seen to be doing ‘something’
    Despite the best intentions from businesses, sometimes doing ‘something’ can do more harm than good. The problem is, as quoted in Harvard Business Review, ‘organisations are trying to reduce bias with the same kinds of programs they’ve been using since the 1960s. And the usual tools—diversity training, hiring tests, performance ratings, grievance systems—tend to make things worse, not better.’                                                                        
  2. Organisations mimic what their competitors are doing because they are nervous to trial new strategies

    Senior leaders hear ideas from other organisations, feel it is a ‘safer’ option, and then copy it – leading to standardised systems and approaches to anti-racism in each sector. But racial equity will not happen, Nova Reid explains, ‘without discomfort, consistency and a whole heap of courage.’ Instead of mirroring what has been done before, organisations need to rethink their assumptions and use data to inform decision-making and deliver returns on their investments.

  3. The perception of success is skewed due to positive PR and a high feel-good factor 

    If an anti-racism campaign receives positive PR that means it was successful, right? Anti-racism activity is commonly elevated by the media as consumers demand more transparency from organisations on how they are committing to racial justice. Yet the short-lived gains from positive PR are incomparable to the long-term, tangible business rewards of creating a culture of racial equity. Businesses need to redefine the metrics of success for their anti-racism campaigns to reap the rewards.

👉 Ready to measure the progress of your anti-racism strategy? Join our upcoming webinar to find out how

 

An amplified example of these three driving factors coming into play is #BlackoutTuesday, which earmarked the resurgence of the Black Lives Matter movement. As black squares filled up Instagram feeds across the globe, organisations felt the need to be visibly seen doing something. Yet performative tokenism was quickly called out with brands such as Pretty Little Thing and L’Oreal on the chopping block, comparative to Ben and Jerry’s which was elevated for its ongoing commitment to social justice.

The instinct for organisations to join the trend was understandable given how #BlackoutTuesday hit critical mass in culture. However, customers, clients and employees are demanding organisations to fix their own house before talking about anti-racism externally. It is only a matter of time until the magnifying glass will be shone on businesses once again as the pressure for social justice continues to mount.

Time to change the default & deliver results

86% of DE&I leaders think their budgets are appropriately invested. Yet nearly one-third of employees disagree, which is unsurprising with Black leadership representation in FTSE 100 companies falling to zero, unemployment for black and minority ethnic UK citizens rising 3X faster than for white workers, and a 2021 research report across 500+ UK business leaders concluding that racism still ‘clearly exists’ in the workplace. 

Technology has transformed how businesses understand, measure, and track the effectiveness of their business plans. It’s time for leaders to stop neglecting data in their racial equity strategies and to use the same analytical approach to drive material change and stop the billion-pound budget from being burnt. 

Organisations that use smart data to understand what’s broken and how to fix it will gain significant advantages over businesses that don’t. Until then, time and money are being wasted, employees are resigning, and social justice isn’t being served.

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