Over the past year, organizations worldwide have grappled with two unprecedented challenges. On the one hand, the COVID-19 pandemic has upended the way people work. Companies are hurrying to invest in digital workplace tools that make it easier for employees to communicate, collaborate, and get work done from anywhere. Those that haven’t invested in workplace experience are facing significant turnover, a trend known as the “Great Resignation.”
On the other hand, the U.S. and the world at large are beginning to confront deep-seated racial inequities that culminated in the 2020 Black Lives Matter protests around the globe. Similarly, companies are struggling to create and support a more equitable workplace and to better train employees in diversity and inclusion (D&I) practices. Most employees in the U.S. believe workplaces could (and should) do more to increase diversity.
For many organizations, this may seem like a zero-sum game. If you have finite resources, where should you invest them? Digital workplace tools or D&I? Make it easier for employees to work, or make it easier for employees to work together?
But new research suggests that it isn’t a zero-sum game. In fact, investing in workplace digitization is linked to improvements in diversity and inclusiveness. Organizations that invest in digital workplace tools are better able to hire and retain diverse talent and to promote equity in the workplace.
While digitization accelerates, skeptics remain
By now, most companies have realized that the pandemic has permanently transformed the way people work; remote and hybrid work has transitioned from short-term solution to long-term reality. Post-pandemic, many employees have expressed their wish to continue working from home, and executives are listening to them. A recent Gartner survey found 90% of CHROs and other HR leaders will permit employees to continue working from home at least part-time after they’ve received a vaccine. Fewer than 20% of executives want their offices to go back to the way it was prior to the pandemic.
This switch to remote and hybrid work has been accompanied by rapid digitization. Data from McKinsey & Company show that industries worldwide have jumped “five years forward in customer and business digital adoption” in just eight weeks. Companies are investing heavily in digital tools meant to enhance and transform both employee and customer experience. These tools include communication and file sharing tools like Slack, Zoom, and Dropbox, as well as collaboration and workforce management solutions from Asana, Atlassian, Miro, Okta, Workday, and others.
Companies are investing heavily in digital tools meant to enhance and transform both employee and customer experience.
Equipping staff with the right technologies, tools, and processes can lead to financial payoffs like greater revenue and reduced costs. According to new data from ESI ThoughtLab, about half of CHROs, 60% of CIOs, and 66% of CCOs are seeing a link between the adoption of digital workplace tools and greater revenue or sales.
However, some executives remain skeptical that investment in digital tools should be the priority. While the financial services industry and the public sector are taking active steps toward digitizing employee experience, manufacturing and healthcare companies have been slower to follow suit. In those industries specifically, CEOs, CIOs, and their peers aren’t entirely convinced of the ROI. Across all industries, some executives aren’t sure that the payoffs of accelerated digitization justify the significant investment.
Innovators see benefits from digitization
Yet these skeptical execs are missing a crucial part of the picture. A survey from ServiceNow and ESI ThoughtLab, which polled 900 C-level leaders across 13 countries, found that 58% of organizations that have been quick to adopt digital workplace tools also have seen a boost in D&I. Beyond the clear social benefits of diversity and inclusion, as well as the boost to creativity and agility, greater D&I has financial benefits for organizations, as well. Even among slower adopters, 37% have found it easier to attract and retain diverse talent since investing in digitization.
The C-suite is beginning to take note of this link. In particular, COOs, whose role centers on the internal benefits from digital experiences, are noticing a positive relationship between digitization and D&I. About half of them cite D&I as a major benefit of workplace digitization. But what explains this relationship?
Employee-first companies are moving ahead
HR executives aren’t surprised by the virtuous cycle between D&I and workplace digitization.
“Employee-first companies tend to be more innovative and also more diverse,” says Rana Robillard, an executive consultant who served as vice president of HR at New Relic and chief people officer at HackerOne. “They’re the disruptors, the ones who both recognize the need for digital tools and understand how to attract diverse talent. People want innovative, efficient, and data-focused companies.”
Mica Mayo, vice president of operations, digital innovation & transformation at ServiceNow, says early adopters of digital workplace tools are more “in tune with the future of work” than their more digital-averse peers. “They’re more inclined to seek out that D&I data and to have that top of mind as a company, to make that cultural shift.”
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Robillard identifies three different categories of digital tools that are boosting D&I: those that give companies access to a wider and more diverse pool of job candidates, those that enable companies to better execute D&I initiatives, and those that allow companies to more easily showcase D&I initiatives.
The first category includes tools like Slack, Zoom, Miro, and Asana, all of which facilitate workplace collaboration outside a physical workspace. The second includes tools for tracking employee engagement, performance management, talent management, and demographics. The third parses and analyzes demographic and psychographic data.
“People want to work for a company where they’re treated well and fairly, and for employees to get insight into whether that’s happening is really important,” Robillard explains. “It’s equally important for HR to have the systems they need to leverage their data and make the case for further D&I initiatives, like pay equity and transparency.”
Teams can then dig into the data to identify areas for improvement—and provide snapshots of their progress to job candidates.
“The way to get diverse talent is the way to get all talent,” says Robillard. “What are people looking for? Great managers? Great programs to support employees? Mental health initiatives and child care? Once you know that, you can provide it, and then you can show job candidates what you’ve accomplished and what they can expect from you as an employer.”
A new business imperative
As more of the world gets vaccinated against COVID-19, businesses are evaluating what a “return to normal” might look like. Mayo says digital tools will play an even greater role in attracting and supporting top talent. “Companies that have seen an increase in productivity during the pandemic will sustain and improve productivity with digital tools,” she says.
However, there’s a dark side to this return to normal. Although remote and hybrid work have opened up opportunities to people who might not have had them, it has also reified patterns of inequality along lines of race, class, gender, age, and the urban-rural divide.
Now that businesses are facing the great resignation, finding ways to mitigate workplace inequity is especially paramount to survival.
Researchers at RAND argue that remote and hybrid work will continue to “deepen patterns of inequality in America’s economic and societal recovery.” The study, which was conducted by Kathryn E. Bouskill and Scott W. Harold, finds that since the switch to remote and hybrid work, “Asian, Black, Indigenous, and Latinx people, and women and nonbinary people, and especially people with intersections of these identities, transgender people, and people older than 50 disproportionately faced increases in harassment and hostility at work.” This harassment and hostility range from bullying on video calls to abuse over email.
Now that businesses are facing the great resignation, finding ways to mitigate workplace inequity is especially paramount to survival. With more companies opening up their virtual offices to workers across the country, people have more opportunities to choose from.
“With this whole great resignation,” says Robillard, “companies are going to have to have a more open mind about the talent they’re going to engage. Tech really likes people who work in tech. That’s easy to find in Silicon Valley, but it’s not easy to retain. When you open up the world, not only can you get more diverse talent, but also you’re going to be pushed to think outside the box a little, such as considering candidates who have not worked in tech before and who have a ton of potential, but perhaps not the experience level you have considered in the past.”
Digital tools facilitate training and retention
When it comes to thinking outside that box, Mayo says digital tools are a valuable asset. To promote equity in hiring and promotions at ServiceNow, she’s pushed the use of in-application learning and guidance tools to assist human decision-making.
“In the talent organization,” Mayo says, “we have pivoted to a new recruiting tool and evolved our talent and performance system and process. It’s a new way of calibrating across the employee base. When managers consider their employee’s performance and potential, they receive nudges to aid in suspending unconscious bias and ensure they are being fair, as well as serve up additional resources on the topic.”
Machine learning and artificial intelligence, which are easily scalable and can be leveraged remotely, are also playing a role in D&I initiatives. “Our last DEI [diversity, equity, and inclusion] summit,” says Mayo, “we did it virtually, and what better way to get people versed on diversity, inclusion, and belonging than to practice having crucial conversations based on real use cases? These exercises included avatars that were built with machine learning and AI. You could literally hold a conversation in a virtual room to practice key principles we’d learned at the summit. It was so lifelike and real, I could tell it was not rote—[the avatars] would respond to things I said and ways in which I phrased things.”
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Companies that have already digitized their HR systems, communication tools, and other workflows are ahead of the game. By finding efficient ways to leverage these tools for D&I initiatives, such organizations really make a difference in their hiring and promotions.
Despite the evidence in favor of greater workplace digitization, some organizations have been slow to adopt these tools. CHROs and COOs, who are on the front lines of workplace experience, are more supportive of the idea of digitization than their more removed peers.
“With COVID, the BLM protests, and now the great resignation, organizations are thinking about what to do to be part of the solution in fighting systematic racism,” says Robillard. “Things like pay equity, promotions, D&I training—companies have a lot of ability to make a difference in these areas and in the overall employee experience.”
In light of the positive relationship between greater digitization and diversity and inclusion efforts, C-level executives who are skeptical of their benefits might do well to reevaluate that position.