By Alexa Grellet, Co-Founder & Commercial Director at HR DataHub.

I have often heard it said that getting diversity and inclusion (D&I) right is merely the reserve of big business. But I have to disagree. In this piece I will cover how early-stage founders can weave D&I strategies into their business from day one. I will explain how they can prioritise this aspect of their business, without the big budgets and expert teams that those larger organisations tend to benefit from.

The data speaks for itself.

To frame this discussion, I think it helps to start with some data. It is, after all, the starting point for most HR related discussions.

• Global consulting firm, McKinsey & Company, has demonstrated a direct correlation between employee diversity and financial performance. Specifically, that companies in the top quarter for racial and ethnic diversity are 35% more likely to generate higher returns.
• A BCG study suggested that increasing the diversity of leadership teams leads to more and better innovation and improved financial performance. The results showed a significant correlation between the diversity of management teams and overall innovation. For instance, companies that reported above-average diversity on their management teams also reported innovation revenue that was 19% higher than that of companies with below-average leadership diversity (45% of total revenue versus just 26%.)
• The Boston Consulting Group and the Technical University of Munich found higher levels of diversity in management positions contributed to increased revenue from new products and services.

And smaller businesses stand to gain from diversity and inclusion initiatives just as much as those large companies do too. Not only does D&I incorporate the knowledge and experience of more demographics, but it also leads to more creative thinking, stronger innovative ideas internally and better decision making. It is also proven to aid recruitment and retention too. For instance, Glassdoor found that workplace diversity is an important factor for 76% of job seekers when evaluating employment opportunities.

All these results point to the same conclusion; focusing on D&I is not only the morally right and good thing to do, frankly, it’s a business imperative.

A big business thing?

You can see why D&I initiatives have traditionally been the focus of big businesses. They (in general) have bigger budgets, larger HR teams, dedicated D&I experts, and of course they also feel those pressures from their boards, stakeholders and their customers to deliver on their ESG agenda. Smaller companies, on the other hand, tend to be focused on scaling their journey, with some only concentrating on the here and now and a fair few, quite understandably, struggling to survive as a result of the pandemic. As such, it is often the case that these early-stage founders have neither the budget, nor the people power to put their time and effort into thinking about D&I with so many other considerations competing for attention.

Early-stage founders as change agents.

Interestingly though, it’s actually these early-stage founders who hold a unique position as change agents. These company founders are often innovative, agile, and many of them have designed a new product or service that can change the world – and what’s more, they have the mindset to change the world too. It’s these early-stage founders who can change the workplace for the better, adapt working cultures to become more inclusive, and change the world we live in, in a truly profound way.

These early-stage founders can build D&I into their company from the ground up. Key to doing this though will be them understanding why diversity and inclusion is actually important to their business. It may be that they believe that having a diverse and inclusive workforce will help them to better understand their customers for instance; or it could be that they believe diverse and inclusive teams work better together; it may be that they believe that diverse teams are better at team problem-solving; or because it will ensure a stronger culture, so people stay with the business long term; or it could be because they want to attract more diverse candidates. In all likelihood though, it will be all of these things. Because, put simply, being a diverse company will give them a competitive advantage.

Here are four simple ways to build D&I into every fiber of the business to gain a competitive advantage.

Knowledge: A leader will need to dedicate time to educate themselves about the various topics and opinions so that they can be well informed and intentional about all the dynamics at play in the D&I space for their sector. But education around D&I has never been more readily available. There are numerous experts sharing their advice and knowledge online, on social media and at networking events for free daily. Moreover, they will also need to look inwards too; understanding their background and identifying any biases they may have. Ultimately the quality of the work they do on their own perceptions will be directly linked to their ability to create a healthily diverse and inclusive team.

Culture: Leaders will need to cultivate empathy and trust. Given D&I needs to be weaved tightly into the very culture and fabric of the business, employees must believe in what their leaders articulate and must see D&I principles represented in both the smallest and the biggest of ways. Employees will need to trust that sharing who they are at work is genuinely valued and respected or they won’t open up and any trust will be lost. Leading by example goes a long way here too; leaders must ask (and truly listen) to feedback and create opportunities to celebrate and support diversity in all its forms.

Recruitment: Four words stand out here; language, reach, process and feedback. Recruiting the right team is one of the most important jobs for early-stage founders. It’s the perfect opportunity to road-test the company’s commitment to D&I. To do this they will need to start by crafting the job description by using inclusive language. Next, they will need to check how far they are reaching to find talent. There are plenty of dedicated spaces to help businesses look for diverse talent. They will then need to build a process that enables every member of the team to be checked for bias. This may mean having many different people interview candidates, sharing feedback with them at every stage of the process and looking for ‘complementarity’ rather than ‘fit’.

Data: A small team certainly won’t have the budget for a fancy HR system to capture data about how it recruits and manages their people, and frankly they just don’t need it either. In actual fact the priority here is just getting organised. Early-stage founders will need to create a spreadsheet, gain greater visibility on the initiatives they are putting in place to support diversity, and track if they are having an impact. They should track everything from demographics and salaries, to policies and benefits. At the end of the day, data doesn’t lie. Looking at the numbers closely will help the business stay on track and improve its D&I strategy longer term.

Let’s be frank here, getting D&I right is always going to be tough work and it will take an ongoing commitment from everyone. There is no magic pill here that one can just take and then a perfectly formed D&I strategy will flow; rather it’s a delicate balance that is hard to strike, and one that requires intentionality above all else. The key here is to make sure that diversity and inclusion is in the business DNA from the start, rather than an afterthought that can be corrected later. D&I is more than just “who you hire”. It’s about the culture that is created within the business.

Author bio:

Alexa Grellet is co-founder and commercial director at HR DataHub. As an experienced commercial leader, Alexa has worked in tech her entire career, from enterprises to scaling start-ups, all over the world. Alexa is passionate about using tech for good and has a talent for building strong inclusive cultures which is why she joined HR DataHub in January 2021. HR DataHub is an intelligence platform for HR teams and provides technology-powered objective insights. The Tech for Good company, which works for clients like M&S, DHL, Asda and EDF Energy, amongst many others, helps organisations make data-led people decisions by collecting reliable, wide ranging D&I data and combining it with cutting edge technology to provide actionable insights for organisations no matter the size or industry they operate in. Alexa is passionate about social justice and believes that improving the way we employ people is one of the most powerful ways to uplift society.