8 steps to a market-leading inclusive hybrid work environment
Founder, Analyst & Author, Lopez Research
Moving to a hybrid work model should not mean giving up on diversity, equity and inclusion.
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Many executives across the globe are feeling the effects of a recent pivot to hybrid work models. This massive transition represents a significant departure from existing office culture. As business leaders look to operationalize their flexible work model infrastructure, they’re also evaluating what it takes to attract and retain employees in this new landscape. Instead of seeing these as separate initiatives, business leaders have a unique opportunity to collectively overhaul corporate culture, focusing on hybrid work and diversity, equity, and inclusion (DEI) strategies in tandem.
Combining DEI and hybrid work strategies provides a more inclusive culture
Focusing on diversity, equity, and inclusion doesn't mean business leaders are offering an underrepresented individual a specific role or platform because they fit a certain demographic category. Lack of job quality criteria leads to animosity and cultural inequality. Here, diversity means creating a meritocracy with equal pay and equal opportunity for all.
Organizations that thoughtfully combine DEI and hybrid work strategies will produce cultures that improve employee experience and business agility. Integrated DEI and hybrid workplace support better business outcomes by:
Increasing the total available talent pool. A business must cast a wide net for candidates by expanding how and where it searches. Adding a flexible work schedule policy expands potential talent by allowing parents, caregivers, and others to select the hours that work best for their family obligations. Remote work also holds a higher priority in job seekers' desires. For example, a FlexJobs survey revealed that 24% of workers say the ability to work from home is so important to them that they are willing to take a 10-20% pay cut to work remotely, and 21% would give up some vacation time.
Creating a more inclusive culture. Job seekers want to work for companies that prioritize DEI. According to a recent CNBC and SurveyMonkey Workforce survey, nearly 80% of workers say that they want to work for a company that values diversity, equity, and inclusion. A DEI-centric work culture allows job seekers to feel like there's a place for them.
Fostering innovation and profitability with broader perspectives. In general, diversity and inclusion promotes the expression of ideas from people with different backgrounds, leading to breakthroughs in creativity, innovation, and attracting new customers. Workplace DEI programs create an employee base that closely mirrors a customer base. A diverse team is less likely to miss potential market opportunities if representative of a broad range of ethnicity, race, age, assigned sex, and socioeconomic backgrounds. A 2020 McKinsey analysis found that companies in the top quartile for ethnic and cultural diversity on executive teams were 36% more likely to have above-average profitability than companies in the fourth quartile.
Hybrid work should not derail DEI efforts
While there are numerous benefits to integrating DEI and hybrid work strategies, it would be naive to think it won’t bring challenges. Businesses run the risk of creating new inequities and exacerbating existing ones as they move to hybrid models. One potential issue lies in which employees can work remotely. An HBR article shared how pre-Covid less than 30% of all workers could work from home; only 16% of Latinx workers and 19% of Black workers had remote flexibility, compared to 37% of Asian workers and 30% of white workers.
Even for employees who can work remotely, it's essential to eliminate "proximity bias." A study by SHRM found that 67% of surveyed supervisors admitted to considering remote workers more easily replaceable than onsite workers at their organization. Additionally, 72% said they would prefer all of their teams to be working in the office.
A successful hybrid environment strikes a balance between flexibility and inclusivity where individuals feel valued, and everyone has equal opportunities for advancement. In another study, researchers concluded that remote workers and office workers were promoted at the same rate, but found that remote workers' salaries grew more slowly. Leading companies recognize that physically being at the office full-time isn't necessary to produce great results.
8 steps to creating a diverse hybrid work culture
As DEI becomes a new business imperative, organizations must work to minimize unconscious bias, creating market-based salaries for all workers, and introducing educational programs that support talent development. Here are some concrete steps you can take to get started.
Educate current and future leaders on DEI and hybrid work issues. As you build hybrid work strategies, it's crucial to discover and understand unconscious biases. According to Deloitte, companies need a holistic DEI learning strategy, including unconscious bias training and developing the conditions for long-term behavior changes.
Embrace tools that support DEI and hybrid workplaces. Organizations can leverage technology and AI-enabled HR software to support their efforts. Collaboration tools provide everyone with a voice regardless of where they are (for example, using Spaces for team chats in Google Workspace so that everyone has access to the same information). Video call features such as transcriptions and translation can help the hearing-and-vision-impaired and employees who speak different languages. It's also possible to purchase recruiting solutions with AI technology to reduce the chance of bias or discrimination when reviewing candidates.
Strengthen culture by marrying DEI with meritocracy. There should also be explicit guidelines to ensure the systems and processes for hiring and promoting individuals are both transparent and equitable. One method for accomplishing this goal is to define detailed job requirements and metrics per role to understand what skills are associated with specific functions. It's also essential to ensure you've designed these processes in a way that screens out bias. Leading companies will deploy analytics tools to evaluate the systems' fairness and track if the systems are progressing against diversity targets.
Create upskilling programs to train employees. Many organizations struggle to find talent with the right skill sets. One solution to this problem is to invest in educating existing employees. Companies must develop diverse talent at every level to create a pipeline of candidates that progresses into senior management. Similar to the way companies offered management training programs to college graduates, organizations should design programs that provide skills enhancement for entry and mid-level employees. Almost every job will require a certain level of technical skill—organizations must upskill existing talent.
Restructure compensation before employees leave. It's easier to retain an employee than to onboard and train a new hire. According to the Atlanta Federal Reserve Bank's wage growth tracker, wages for people who have switched jobs have outpaced those who've stayed at one employer since 2011. One way to retain talent is to right-size salaries to a competitive market rate.
Remember that money isn't everything. While individuals may switch jobs for money, they often stay in a position for the culture. Creating a leading employee experience helps organizations keep talent. Work from home programs, flexible work schedules, and advanced programs such as childcare benefits help build the foundation. But increasingly, individuals are looking for a sense of belonging. According to research from McKinsey, employees who feel included are three times more likely to report being excited about working for their organization and committed to its success. Another McKinsey report focusing on attrition shows that employees primarily leave companies because they don't feel valued or don't have a sense of belonging.
Don't forget to commit the resources. Most organizations built their cultures before DEI and hybrid work were requirements. These companies must invest in new work tools and educational programs, and create new hiring and talent management practices. A business can make a more significant impact with fewer resources by ensuring purchases and processes support flexible and inclusive work cultures.
Make sure actions are backed up with DEI transparency measurements. The pressure to support DEI could lead to situations where activities are celebrated over results. While it's not easy to be vulnerable and transparent about where the problems exist, employers should take stock of where they are today. They should present this authentically, create goals for the future, and design a measurable action plan to track its progress. With so many variables and unknowns, it's crucial for talent leaders to track the way that hybrid work and DEI efforts advance.
Diversity should be part of your efforts because it's the culture you want to create. However, ignoring diversity efforts can also come with ramifications. For example, Goldman Sachs announced in 2021 that the firm would only underwrite IPOs in the United States and Europe for companies with at least two diverse board members. Meanwhile, the U.S. Securities and Exchange Commission adopted new rules this summer that require Nasdaq-listed companies to have at least two diverse directors – including one woman and at least one member of an underrepresented community.
In order for the benefits of diversity to emerge in the workplace, companies need to enact cultural and behavioral change. As stated in the ICSM report, "Never become too comfortable with your efforts, as there is always room for improvement with diversity at your organization, whether you see it or not.” It's clear that what organizations have done to attract talent in the past isn't resonating the same way today. A diverse workforce delivers better ideas and stronger communities, building deeper relationships with customers along the way. Moving forward, it's expected that a company's investment in a diverse, inclusive, and hybrid work culture will set it apart from its competition, leading to increased business agility and better financial outcomes.