Current affairs

Friday, 4 de January, 2019

Pilar Llácer, a Human Resources consultant and lecturer at EAE, presented a report entitled “Diversity in companies and minority representation” produced by Esther González Arnedo, Ana García-Arranz and a research team at the Business School.

Conducted by the Director and lecturer on the Master in Human Resources Management, Esther González Arnedo, and Ana García-Arranz, the Director of EAE’s Strategic Research Center, the analysis highlights the importance of diversity management around the world. The report also emphasizes the message that companies and governments have to manage diversity and integration effectively in order to enhance efficiency, generate greater profits and improve their reputation. To reach this conclusion, the report analyses aspects such as the definition of the concept of diversity, its economic impact, the gender gap, the glass ceiling and the integration of the LGTB collective, among others.

Diversity management

The report interprets diversity from the perspective of concepts such as culture, race, gender, age, physical capacities and sexual orientation. From this starting point, it explains that inclusive organizations are more successful because their teams are also more efficient (accessing different markets and customer segments successfully), they increase the creative foundation and entrepreneurial activity of their members, their companies are more attractive because the team of employees has a greater range of talents, enhances the organizational culture and also improves the company’s reputation.

At a business level, the economic impact of diversity is related to profitability and value creation. To support this claim, the report analyses data that verifies that gender diversity in executive teams is correlated to greater profitability in all regions. In the cases analysed, the executive teams of the best performing companies have more women in senior roles than other companies. As a result, it seems clear that having more female executives in top level positions (in the areas that generate most revenue) is closely related to financial performance.

The gender gap and glass ceiling

Employment inequality is an area with room for improvement in many companies, despite small steps being made in the right direction, particularly in Anglo-Saxon countries. The reality is that a women faces twice the risk of being made unemployed than her male counterpart, she holds positions in sectors with lower productivity and earns a lower salary. In fact, there is not a single country in the world that has completely closed the gender gap, although nations such as Iceland, Norway, Sweden Slovenia, Rwanda and Nicaragua have achieved optimistic results in this respect. Spain ranks 24th in the gender gap classification, behind Barbados, although the report emphasizes the existence of “opportunities for improvement in terms of diversity management in our country”.

Education is directly related to integration as there are imbalances between the fields of study predominantly chosen by men (more focused on engineering, manufacturing, construction and technology) and those chosen by women (broadly represented in education, healthcare and wellbeing).

The integration of the LGTB collective around the world and in our country in particular is also examined in the analysis, with Spain ranking satisfactorily with 91.42% of IBEX 35 companies expressly referring in their codes of ethics to the inclusion and non-discrimination of the LGTB collective. The report also discusses the glass ceiling, the invisible and unbreakable barrier that prevents women from reaching the highest levels of power in organizations, finding that 38% of positions of responsibility are held by women, compared to 62% in the case of men.

Diversity in HR departments

One of the most commonly cited reasons for managing diversity is the Corporate Social Responsibility of companies based on aspects such as its culture and value. CSR falls within the scope of HR Management in 50% of cases. In fact, more than half of the participants analysed implement diversity initiatives in areas including Recruitment and Selection, Internal Communication and CSR. These are closely followed by policies related to Training, Development and Internal Promotions.

EAE’s report related diversity to other HR policies such as Occupational Health and Safety and other activities more closely linked to social initiatives for raising awareness of diversity. The statistics are surprising: more than half of these HR policies are corporate in nature, while only 14% are implemented at a local level.

The functions of the departments responsible for people management in different countries include advocating cultural inclusion through studies that measure the rates of cultural inclusion by country within the organization. Disappointingly, only 30% of the 64 participating companies carry out this kind of initiatives. If we compare national companies to firms elsewhere in the world, we see that 47% of foreign companies conduct social inclusion studies compared to just 15% in the case of Spanish companies.

The road to diversity

The challenges highlighted by the report “Diversity in companies and minority representation” include diversity management in integration and striving for gender parity because this affects 50% of the world’s work and, therefore, the economy. With all this in mind, governments, institutions and business organizations have to create an ecosystem of measures that promotes the employment integration of women throughout society. In this respect, the report acknowledges that the culture of each country and region affects diversity management and there is still a long road ahead at a national level, despite significant progress being made in this regard.