The good news: A growing number of business leaders are talking about the importance of creating an inclusive workplace culture.
The bad news: In many cases, their employees do not feel that talk is translating into meaningful action. And according to new research from Accenture, that gap between talk and action costs the world economy trillions in lost profits.
Released today to coincide with International Women’s Day, the report—“Getting to Equal 2020: The Hidden Value of Culture Makers”—offers valuable insights on how a more inclusive workplace culture would advance the status of working women and create economic benefits for all.
Two different realities
“When it comes to workplace culture,” the report begins, “there is a large gap between what leaders think is going on and what employees say is happening on the ground.”
For example, while over two-thirds of leaders (68%) feel they are creating an empowering work environment, only 36% of employees agree. (Accenture defines an empowering workplace as one where employees can be themselves, raise concerns, and innovate without fear of failure.)
Another startling gap: More than three-quarters of leaders (76%) say their employees have good control over when, where, and how they work. Only 29% of employees agree.
Asked how many of their employees do not feel “included” at work (i.e., welcomed and in a position to contribute fully and thrive), leaders estimate 2%. The reality is that 20% of employees feel this way: a ten-fold perception gap.
The cost of the workplace culture perception gap
Accenture, a global professional services company, surveyed more than 30,000 professionals in 28 countries, over 1700 senior executives, and built on labor force data and previous research to quantify the perception gap and its economic impact. If that perception gap closed by even half, global profits would be higher by 33%, or $3.7 trillion.
How would greater inclusiveness increase profits so much? To start with, the annual retention rate for women would increase by 5% (and 1% for men). High turnover is a well-documented drag on productivity. A company with 50,000 employees would save $8 million a year just based on improved retention of women. Moreover, the proportion of women aspiring to a leadership position in the organization would climb by 21%. Finally, the precentage of women who feel like a key member of their team would rise by 43%.
The report cites research showing how feeling included boosts productivity and fosters what it calls an innovation mindset: an individual’s willingness and ability to be innovative at work. Such a mindset is six times higher in organizations with more inclusive workplace cultures. If an innovation mindset raised by 10% worldwide, global GDP could increase by up to $8 trillion by 2028.
In short, by not acting on inclusiveness, we are leaving a lot of untapped innovation and productivity on the table.
What is preventing more progress?
Many leaders give lip service to the importance of workplace culture—but only 21% identify it as a top priority. Culture lags far behind priorities such as financial performance. Many leaders say they find it hard to link workplace culture to business performance. Others say that culture is too difficult to measure.
Employees are keenly aware of that lack of commitment. Employees rate leadership’s efforts to create a more inclusive culture 55 on a scale of 1 to 100.
While culture is, the report acknowledges, “a notoriously amorphous concept” that is difficult to quantify, that is no excuse for inaction. Accenture has identified 40 workplace factors proven to influence advancement, inclusiveness, and empowerment positively. The factors include:
• Clear diversity targets
• Equal pay for men and women
• Strong parental leave programs for both women and men
• Flexible policies on remote work
• Freedom for employees to be themselves at work
• A positive attitude toward failure
“Culture Makers” are driving change
Creating an inclusive culture does not happen overnight and requires a wide-ranging commitment to multiple factors. Those willing to make such a commitment—leaders the report calls “culture makers”—are richly rewarded.
Culture makers lead organizations growing more than twice as fast as those of their peers. Their sales are 2.2 times higher, their profits 3.2 times higher.
Unfortunately, the report finds that culture makers “are still few and far between.” Only 6% of the leaders surveyed meet that standard.
While women constitute only 32% of leaders in the survey, 45% of culture makers are women. Merely improving the gender balance of your organization’s top leadership will significantly increase your chances of creating an inclusive workplace culture.
Talking about company culture is not enough, but it is a start. Accenture finds that only one in ten companies discuss the importance of workplace culture in their public statements—yet that is a 30-fold increase over the past decade in the number of organizations doing so.
Accenture’s “Getting to Equal 2020” research moves the conversation about inclusive workplace culture forward in compelling ways. We can honor International Women’s Day by raising that conversation in our organizations—and then asking the difficult questions about how to translate that talk into action.