3 views on enhancing diversity in organisations – are we biased, lazy or are the barriers structural?

The benefits of diversity and inclusion for businesses are well known. So why are we still struggling with these issues? In a KAUTE talks interview Rebecca Piekkari, Marcus Wallenberg Professor of International Business from Aalto University, Sami Itani, CEO of Adecco Finland and Kristina Sweet, CEO of The Shortcut share their views on the topic.

How are diversity and inclusion considered in organisations in Finland today?

Piekkari: “In Finland, diversity is often discussed as a matter of equal opportunities between genders rather than a broader question of individual differences. However, a number of progressive Finnish organizations have realized that diversity is not likely to ensure success unless the organization has an inclusive environment. Overall, diversity is much more easily achieved than inclusion.”

Itani: “​The firms in Finland are slowly but steadily progressing in these matters. However, they are becoming more polarized in this. As a result, gaps in both performance and employee engagement are growing within industries. Multinational organizations are the frontrunners in diversity and inclusion, but even among them there are differences. While some have thoroughly implemented D&I into their strategy, others still perceive it as a social responsibility effort, which is a fairly conservative way to approach D&I.”

Sweet: “My experience is that comfort generally wins over diversity and inclusivity. Firms are talking about the issue, but the actions continue to lag behind. For the most part, large multinational companies, startups and early stage growth companies are still most likely to hire diverse candidates. Large companies are used to having many nationalities, may already have English as a working language and can leverage the skills in different markets. Many startups have younger teams and are by nature more global and open and therefore hire more based on skills and less on fear. And frankly, foreigners are generally paid less in Finland than their domestic equivalents which creates opportunities for startups to get higher skills for lower costs.”

What are the main barriers that prevent inclusion and diversity in organisations?

Piekkari: “Recent research shows that recruitment practices favour Finnish job applicants over foreign ones. A foreign applicant, who has equal qualifications to the Finnish applicant, is discriminated against based on a foreign-sounding name. At the same time, a sole individual, who is different from others at the workplace, may struggle and not fit in.”

Itani: “​I believe that the implicit and unidentified biases regarding minorities and their abilities are still the main issue. For instance, most men in Chairman or CEO roles would sincerely prefer to hire more women into leadership roles. But, this tends not to happen due to the so-called X factor: the similarity and, hence, assumed safety that can make the male candidates seem more appealing. Another thing is outsourced recruitment and headhunting, as many headhunters still don’t recognize these biases. Therefore safe and conservative candidates tend to proceed to the final interview stages.”

Sweet: “I think we need to consider the perceived risk for companies. Labour laws are strict here: there is not much leeway for easily replacing employees which means that recruiters take fewer risks. Even with a 6 months probationary period the cost to hire-fire-rehire is too big. I believe this heavy process creates a smaller risk profile. I also see that language continues to be the main issue. Although most Finns speak English exceptionally well, it is more comfortable, faster, precise to work in your native tongue.”

Tell us an example of the benefits of a more diverse and inclusive organisational culture.

Piekkari: “Universities are creative organizations where bright minds meet. Excellence in teaching and research is easier to achieve when individual students and professors, regardless of their background, are valued and respected for who they are. Thus, an inclusive organizational culture contributes to well-being within the entire community.”

Itani: ​”Diverse organizations perform better in business. This empirical fact is seldom even challenged anymore. Also, I believe that in terms of social performance and collegial wellbeing diverse teams tend to reward the employees more. However, a common problem for otherwise well-run businesses is that diversity isn’t managed strategically. Just placing a group of diverse people into the same team doesn’t bring much good necessarily. Similarly, company culture needs to be managed systematically. In an environment with courage and psychological safety the diversity benefits can be fully tapped.”

Sweet: “Of course there are studies showing the benefits to revenue and growth that diverse teams bring. But in addition, I think diversity, when managed well, can bring empathy, compassion, creativity, and retention. Varying perspectives can drive better design, user experience, create customer loyalty. There is also the larger societal benefit of reflecting the environment within which you operate.”

What should we next focus on in enhancing diversity in our society?

Piekkari: “The digitalized workplace can make it more difficult to foster diversity and inclusion. It is easy to exclude minority representatives, when they are ‘out of sight, out of mind’ due to the effects of the on-going pandemic. The role of team leaders in daily organizational life becomes particularly important.”

Itani: “On a societal level we need even aggressive structural reforms to boost up the process. For instance at Finnish Athletics Federation we’ve introduced quotas into boards and leadership positions, since just a sincere will of having more diverse decision-maker groups didn’t bring much results. All the three sectors – the public, the private and the NGOs – need to make them.”

Sweet: “I think we need to be honest about the challenges. I firmly believe that a good portion of the disparity in diversity is due to the comfort zone, but comfort is not an excuse. There are also systemic biases that continue to exist in leadership, in laws, and in society at large. Pretending that we are a gender equal country or that we have no racism, is not going to move us forward. Secondly, eating the elephant in one bite will not work. We need to take one small problem that we believe we can change and iterate until we get there. And thirdly, while I welcome all initiatives to bring foreigners into this great country, I believe in parallel we need more programs to get foreigners that are here to work too.”

To hear more about fostering diversity in organisations, join us for the KAUTE talks x Aalto University webinar on 2 Feb at 9.00-10.30 am. Sign up here by 31 Jan!

The event is in English.