Roland Berger on diversity and inclusion: German firms rarely promote older or foreign staff
Munich, July 16, 2012
- 95% of all businesses take diversity and inclusion (D&I) seriously and actually define concrete actions for it
- 76% of companies have staff appointed specifically to handle D&I projects
- But 80% of those surveyed focus solely on promoting women
- Companies rarely promote older, more experienced staff or foreign colleagues
- Just one-third of all companies measure how successful their D&I work is
Diversity & Inclusion now plays a major role at many German companies. Around 95% now have programs aimed at promoting specific groups of staff such as women, older staff or colleagues from abroad. They hope this will benefit them financially, such as giving them better access to new, lucrative markets or the ability to recruit talent. Even so, 80% of companies focus solely on promoting women: most neglect other important aspects, such as integrating older staff. And just 30% of those surveyed measure how they are implementing their D&I work, so they have no way of saying how successful it actually is. These are the findings of a new survey, "Diversity & Inclusion – A business investment" by Roland Berger Strategy Consultants.
"Everyone now recognizes that D&I programs are essential, which is a major step forward compared with D&I even just five years ago," says Carolin Griese-Michels, head of Corporate Responsibility at Roland Berger Strategy Consultants. "But isolated programs are ineffective unless they're aligned with the various objectives and measured systematically. That's the only way businesses can achieve a clear competitive advantage."
Investing in targeted D&I pays for itself: Roland Berger's experts estimate the German economy could save around EUR 21 billion a year if companies systematically pushed actions to encourage employee diversity. These actions increase the loyalty of well-trained employees to their company, reducing staff turnover and the costs involved.
The reasons businesses opt to take a systematic approach to D&I are mostly financial ones: 75% believe it will give them better access to new markets. "Staff from abroad know how their local markets think, and have the language abilities that are essential if companies want to move into new markets," says Griese-Michels. As skilled staff becomes an increasingly scarce commodity in Europe – and in Germany in particular – 65% of those surveyed are also using D&I to try to keep experienced staff with their valuable know-how in the business and recruit new skilled employees.
Important groups of employees remain unnoticed
German businesses now spend an average of EUR 2.3 million on D&I programs a year; 76% of them have their own D&I managers and teams to handle them. But, although companies aim to cultivate different groups of staff as a result, 80% of them still only support women. "This one-sided approach could hold businesses back in the long term. They should instead focus on a sustained D&I strategy covering all groups of staff," Griese-Michels explains.
Still, 70% of those surveyed think they should promote older and foreign staff, and 40% believe putting together mixed teams with a range of skills is an important part of D&I programs. But less than 20% of businesses do anything at all in these three areas.
Companies do not measure whether D&I succeeds
The reason most companies fail to invest in important groups of staff could be they don't even measure how these programs are implemented, whether they are successful and what their return on investment is. "This is something of a contradiction," says Griese-Michels. "All businesses measure their own projects to see if they succeed or fail. Why should D&I projects be different? That's the only way companies can actually find out whether their efforts are worthwhile or not."
The reality looks different, however: just 30% of those who took part in the study measure how successful their actions are and how they are implemented or accepted, even though they cost time and money. On the other hand, 55% assess how well they are promoting staff – whether more promotions result in more international or women managers; but, once again, more than a third focus only on the status quo in terms of promoting women.