Dive Brief:

• Global organizations are finding success in creating diverse workforces; however, there's a lack of understanding on how to create a sense of belonging, according to Globalization Partners Inc.'s second annual survey released March 24. Approximately 1,725 randomly selected employees who work for multinational companies and workgroups were asked about their experience. 
• Nine in 10 employees described their companies as diverse, yet 3 in 10 respondents said they don't feel a sense of inclusion or belonging. This has a negative impact on employee engagement, happiness and trust and can affect staff turnover, according to the report. Globalization Partners Inc. found that two-thirds of companies find it challenging to adjust and be sensitive to local culture and communication styles, particularly when a company covers multiple geographies. About 89% of employees said outside experts would help their company with cultural training and cross-organization education.
• In regard to communication, 46% of employees relied most frequently on email. Thirty-one percent found it effective. Organizations that embrace multilingualism have experienced better team results across the board. "Companies who want to position themselves to reap the benefits of diversity — in both employee sentiment and competitive advantage — must also put resources toward managing the challenges posed by it," the report stated.

Dive Insight:

Despite the financial and cultural benefits of creating diverse work environments, there's a perception gap as to its importance, according to research. 

Accenture's recent report, based on a global survey of more than 30,000 professionals in 28 countries, found that diversity and inclusion (D&I) is not a top strategic priority for the majority of leaders, fueled by a misconception of a favorable company culture. The majority of leaders named financial performance and brand recognition (76% and 72%, respectively) as top strategic priorities; meanwhile, 34% of leaders ranked diversity as a top priority. Six percent of the leaders surveyed met the standard of a culture maker who are more likely to lead companies where people remain engaged "and their organizations' profits are nearly three times higher than those of their peers," the report stated.

Although decisions on strategic financial priorities are made by organization leaders, Gartner Inc., a research and advisory company, said diverse frontline decision-making teams play an integral role in achieving financial goals. The company predicted in 2019 that through 2022, 75% of organizations with frontline decision-making teams reflecting a diverse and inclusive culture will exceed their financial targets. "D&I initiatives will only contribute to business results if they are scaled properly and actually reach frontline employees," John Kostoulas, senior research director at Gartner, said in a statement in 2019. 

Kostoulas said organizations often overlook extending D&I programs and training to frontline employees. "Numerous technologies can enhance the scale and effectiveness of D&I programs, such as by diagnosing the current state of inclusion, developing leaders who foster inclusion and embedding inclusion into daily business execution," he said.

Global companies that fail to make D&I a priority will only be average when it comes to profitability, according to research. A McKinsey & Company 2018 report focused on the global relevance of the correlation between diversity in leadership at large companies and financial performance. The research found that companies in the bottom quartile for both cultural/ethnic and gender diversity were 29% less likely to achieve above-average profitability than were all other companies in the company's data set. "In short, not only were they not leading, they were lagging," the report stated.