Organizations poised to navigate major market disturbances invest in improving the employee experience, recognizing that these investments create an engaged, aligned and productive workforce and reduce employee turnover. At the same time, market upheavals jostle employee and customer preferences, leaving commercial leaders wondering how to prioritize their investments for both short-term relief and long-term success.
To better understand commercial leadership priorities, Alexander Group has analyzed a variety of Diversity, Equity and Inclusion (DEI)-related programs employed among top global organizations. Deep conversations with clients, executives and DEI leaders have isolated the most effective approaches from center practice.
How can commercial leaders apply best practice DEI frameworks to their organizations?
Diversity, Equity and Inclusion (DEI) programs are growing in prevalence, with Google Trends suggesting that business-related searches for DEI have more than tripled in the last five years.1 But why are commercial leaders increasing investments in DEI? The first part of this report examines the reasons behind the increased focus on DEI, how employee experience (EX) impacts customer experience (CX), and steps commercial organizations can implement today to improve the employee experience.
Addresses how a person self-identifies, including race, gender, identity, age, religious affiliation and sexual orientation. In addition, their education, personality, cultural references, experiences and physical abilities can all be part of their unique identity.
As organizations focus on attracting and retaining best-in-class talent, they must address the following issues: employee fatigue and burnout, unclear career paths, balancing employee flexibility with productivity and collaboration, and limited transparency into compensation and opportunity equity.
Poor talent retention disrupts the sales cycle, leading to higher account loads for sellers as companies reshuffle account coverage. Additionally, hiring replacement headcount requires additional ramp up time and leaves gaps in productivity. Therefore, attracting quality talent and maintaining a high employee retention rate is extremely valuable to organizations, which is why 97% of commercial leaders are investing in DEI programs.2 These programs aim to provide solutions to employees, ultimately reducing turnover and all-in-all improving employee experience.
According to Tracy Robertson, Global VP of Customer Experience at Kimberly-Clark, “80% of surveyed customers state that the buying experience is now as important as the products or services that they buy.” This insight reinforces the strong relationship between employee experience and customer experience. Employees from all stages of the buyer journey are engaging with customers, from business development identifying the opportunity, to core sellers influencing the sale and landing the account, to post-sales roles, such as customer success, ensuring adoption of the product or service and demonstrating proof of ROI for the customer. It is crucial that these employees are supported and motivated by an excellent employee experience in order to best engage their customers at each point of contact. Poor employee experience, and lack of engagement, translates into a poor customer experience, which in turn negatively impacts the business’ revenue and profitability.
Additionally, firms need to meet employee needs around flexible work, especially as commercial leaders set guidelines around returning to office-based work. The percentage of companies that report not having flexible work programs is rising: in 2021, 12% of companies were not implementing any flexible work programs, increasing to 17% in 2022.2 This creates an employee flight risk: recent research from the talent mobility platform, Topia, shows that over 60% of workers forced to return to the office cite the lack of flexibility as an incentive to change firms. The inability to meet employee demands for flexibility undoubtedly erodes employee engagement.
There are two additional non-compensation-based strategies to create a lasting uplift in employee experience: investing in talent development and establishing clear and flexible career paths.
Strengthening professional development programming to provide individualized coaching and support enables employees of different backgrounds and skillsets to develop their strengths in the manner most effective for them. This is a common recruitment and retention strategy: nearly half of the firms surveyed in recent Chief Executive Group and Alexander Group Research are improving their training and development programs to win the race for talent.3
In tandem with providing employees with career-accelerating training and support, commercial leaders should also create clearly-defined career paths that allow employees to chart their own path within the organization. One of the biggest workforce challenges voiced by commercial leaders in an Alexander Group Media Advisory Council session was the loss of mid-level and experienced talent through poaching.4 Giving employees a clear career advancement pathway, and one that allows employees to switch roles laterally in addition to advancing within the role is another form of flexibility that encourages employees to develop their ideal long-term career without needing to look externally. This practice also inherently improves the ROI of professional development programs.
In order to continue attracting and retaining best-in-class talent, commercial organizations need to take action today and begin implementing the aforementioned programs. As these diversity, equity and inclusion programs are implemented, employee experience will improve, which will reap financial benefits for firms as customer experience and engagement is positively impacted.
What does it take to navigate an organization through multiple economic downturns and consistently emerge stronger on the other side? According to a recent Alexander Group survey, enduring leaders guide their organizations with eight leadership tenets:5
Enduring leaders focus on supporting an engaged workforce, holding both a people-first and first-mover mentality. Specific to talent and the employee experience, they invest in fostering work-life balance, developing seller skillsets, and creating a robust talent management practice that attracts diverse candidates.
Investing in DEI programs is inherently a core principle of enduring leadership, as evidenced by the emphasis these top organizations place on evaluating and improving their DEI practices. These leaders hold themselves accountable to their employees, as well as their customers, shareholders and regulators, by taking action through a variety of DEI programs.
Alexander Group recently surveyed senior North American commercial leaders to assess the implementation and effectiveness levels of 13 core DEI programs.2 Survey findings indicate four main categories of DEI initiatives:
Hover over each DEI program to view the breakdown of implementation and effectiveness scores.
According to the recent Alexander Group research on Enduring Leadership, although the vast majority of leaders (94%) consider Listening to Employees one of their leadership tenants, nearly half of enduring leaders rate their ability to listen to their employees as ineffective.5
42% of companies surveyed have advanced programs for Evaluating Pay Levels for Equity. However, only 28% have advanced programs to formally measure the diversity of their employee base (i.e., tracking multiple representation metrics across hiring, retention, pay levels, etc.), which is a critical component in establishing a clear understanding of the current state as well as tracking progress towards diversity goals.2
To solve these challenges and enact transformational change, commercial leaders need to follow a holistic approach—one that has buy-in across management levels, integrates ongoing measurement, prioritizes both quick-win programs and larger infrastructure changes, and communicates progress against goals in a recurrent and transparent way.
In the previous sections, we explored why companies are investing in DEI programs and what types of programs they are implementing. We also saw that many face hurdles in achieving their DEI goals that they struggle to overcome. This section will highlight how leaders implement best-in-class programs that champion DEI at their companies. These organizations are mobilized by authentic and committed leadership. They listen intently to their stakeholders—their employees, customers, shareholders and regulators—and work collaboratively with them to execute their strategy cohesively. They also benchmark themselves to their peers and set goals to hold themselves accountable. They deliver results early on with quick wins for their teams, but also invest in long-term projects, intent on achieving their enduring vision for their organizations. What sets them apart is an eagerness to learn, an openness to change and the ability to constantly recalibrate their approach.
The last few years have brought a surge in corporate engagement with diversity, equity and inclusion. Leaders are doing their DEI due diligence: they are engaging in bias prevention training, educating themselves about creating inclusive environments, joining associations—such as CEO Action—that require proof of action, and some are even tying a portion of their compensation to achieving their company’s diversity goals. These are all markers of authentic leadership—executives actively working to understand the gaps in their organization and keeping themselves individually accountable to closing them.
For companies that are in the early days of implementing DEI programs, or those that are hoping to restructure their current path, motivating transformation at the leadership level is key. An executive steward should drive conversations at the leadership level, ensure financial backing for the eventual program investments, and embody the company philosophy in communications to the broader organization.
One more essential function of the executive steward is to understand and align the viewpoints across management levels. Alexander Group’s DEI research shows that different layers of sales leadership tend to disagree on the level of effectiveness of various DEI programs.2 For instance, over half of managing directors rated formally soliciting employee feedback ineffective at driving DEI progress, while nearly 60% of vice presidents rated the program highly effective.
Having a steward drive the DEI transformation at the top decreases friction along the journey and sets a consistent message across the different layers of leadership, ingraining emphasis on employee experience into the company culture.
A simple and direct way to gather feedback from your primary stakeholders—your employees—is through an anonymous survey. Ask your employees for feedback on current programs, take a litmus test of how represented and supported they feel within the firm, and solicit ideas for programs that would improve their experience. Additionally, track representation characteristics that allow you to compare sentiment across key groups.
When soliciting feedback from employees, favor direct feedback over indirect. In a discussion with a recent client, Alexander Group learned that gathering feedback indirectly via front-line sales managers yielded different sentiments than an anonymous survey of the sellers. Going directly to the individual contributors for feedback can lead to a more accurate snapshot of the employee experience, giving all sellers an equal chance to voice their unique opinions.
Note: It is essential to disaggregate each diversity characteristic from any other identifier to preserve anonymity and ensure response integrity. Contact Alexander Group to learn more about DEI Feedback Survey best practices.
Although soliciting employee feedback will give you the most direct insight into gaps in your employee experience, it is also important to keep your finger on the pulse of your other stakeholders: your customers, shareholders and regulators. Gathering feedback on customer experience can reveal gaps in overall representation: if the customers served are not well-represented by the sales and support roles with which they interact, they may miss out on products and services that may be of interest. Sellers that do not represent the communities they serve tend to have a weaker understanding of their customers: a Harvard Business Review study found that when a team contained a member that shared a client’s ethnicity, it was significantly more likely than the control team to understand the client.
Alexander Group runs ongoing research efforts to compare your commercial practices and investments against those of your direct competitors. You can compare seller productivity and efficiency of your investments along with coverage ratios and target compensation benchmarks. Participate in the research to understand: Are you underinvesting in employee benefits? Are your competitors increasing their investments in support roles? Do you offer market-competitive on-target compensation? Use our findings to recalibrate your practices and communicate your value to your employees.
In aggregate, less than 30% of firms surveyed in Alexander Group’s DEI research implement advanced measurement programs around employee representation.2 Below, you can find a few examples of measurement best practices across several industries.
In 2020, Snap, Inc. launched their internal Diversity Data Dashboard, wherein executives can review real-time aggregated diversity statistics around hiring, attrition and promotion to leadership. These statistics supplement conversations around progress in building diverse, inclusive and empathetic teams.
Visa tackles inclusion tracking through an Inclusion Index informed by an annual employee survey. One action that helped increase Visa’s Inclusion Index is the introduction of unconscious bias training at the leadership levels.
In 2019, Intuit made its Diversity & Inclusion Dashboard available to all employees, so that they could monitor representation by gender, ethnicity, geography and roles monthly. The dashboard also summarizes scores around belonging, engagement and sentiment toward their team.
Healthy prioritization practices balance long-term programs with quick wins in order to maintain the momentum of the DEI transformation.
Once goals and target programs have been established, organizations should build a calendar of events and checkpoints to ensure progress towards goals. Commercial leaders consistently rate external programming (DEI training, external speakers, volunteering opportunities) as an effective practice,2 so make sure that your DEI leadership is organizing events to shed light on issues that are important to your employees.
In addition, using employee input to help with program prioritization strengthens employee engagement by encouraging individuals across levels of the organization to drive the changes that they want to see. While an executive steward is necessary to give the DEI transformation its due gravitas, assigning program stewards across a multitude of roles improves program transparency and allows employees to directly contribute to the company culture and philosophy.
As organizations execute programs and make progress towards their goals, they can accelerate improvements to employee experience by effectively communicating what efforts are being taken and by celebrating the goals achieved along the way. Communication should be voiced at the executive level and should recognize the efforts made by individual program stewards. This outreach should reiterate company priorities and progress against those priorities, both celebrating accomplishments to date and giving employees concrete and achievable initiatives to look forward to.
Externally, organizations should ensure effort visibility to continue to attract diverse and best-in-class talent. Research from job-search platforms shows that applicants care about the diversity of their team: according to Glassdoor, 76% of job seekers view workforce diversity as an important factor when evaluating offers and companies. Voicing company efforts also drives more engagement: for instance, LinkedIn research shows that posts containing the word “flexible” get 35% more engagement at a time when job searchers are getting pickier—so if your organization offers flexible work, communicate the benefit up-front.
After all, attracting and retaining diverse, best-in-class talent is the core motivator for DEI program investment. Communicating company DEI goals and progress towards those goals, gives both current and prospective employees the motivation to contribute their best and most engaged efforts to an organization that matches, supports and elevates their contributions.
Are you interested in learning more about Alexander Group’s Diversity, Equity and Inclusion research? Contact Alexander Group today to receive a live briefing.
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1 Google Trends, 2017-2022 “Diversity, Equity, and Inclusion” Topic, Business & Industrial Category
2 Alexander Group’s Annual Diversity, Equity, and Inclusion Survey
3 Alexander Group and Chief Executive Group Joint Survey, 2022
4 Alexander Group Media Advisory Council, June 2022 Session
5 Alexander Group’s 2022 Enduring Leadership Survey
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