Fostering diversity and inclusion environment

I have been working in the corporate space for more than 30 years. Having experienced the working environment across different cultures, nationalities, and times, I have had the opportunity to observe firsthand the evolution in the workplace as well as across corporate culture. Trends often come and go, but some have a longer and more positive impact on organisations and society. Diversity & Inclusion (D&I) is one of those.

D&I has become a buzzword that draws so much attention in corporations around the world that many of them have looked into ways to actively promote D&I in their culture and also integrate D&I into company policies and recruitment processes. In Viet Nam, similar to other global trends like ESG adoption, FDI enterprises are also likely to be among the first to have embarked on the D&I journey as they follow their parent companies’ path.

In the past few years, we have seen many intiatives focusing on gender. Particularly, the spotlight has been shone on such activities as Pride Month (in June), Pink October or Movember. These are positive ways for organisations to begin, to promote, reinvent or sharpen their D&I efforts. However, we should look at the big picture. D&I is much more than just events, it is an important component of companies culture.

A long history

D&I in the context of the business world refers to the interlinked values held by many organisations that are working to be supportive of people of different cultures, races, ethnicities, religions, abilities, genders, and sexual orientations. Its origin can be traced back to the mid-1960s when workplace diversity training first emerged following the social movements and regulatory developments related to equal employment. Companies were encouraged to train their employees to adapt to a more integrated and tolerant workplace. Though such programmes had little lasting impact, they definitely helped lay the foundation for future progress.

There was an important shift in D&I during 1980-1990s as its scope has become broader and included addressing the diverse needs of various groups of individuals, including the LGBT communities. This was also the time when the D&I concept and term became mainstream, with new titles like Chief Diversity Officer emerging.

The 21th centure marked a boom in D&I awareness mainly driven by the birth of social media platforms. They served as a strong catalyst for D&I to become fully integrated into business strategy, going beyond a single programme of an organisation and thereby becoming part of the DNA of corporates. D&I became a stated value or priority area for 75% of organisations according to PwC’s Diversity & Inclusion Benchmarking Survey. In Viet Nam, D&I is now also recognised as an essential aspect of business’ culture and sustainability.

D&I in banking sector

Gen Z will comprise more than a quarter of the global workforce by 2025. This should be a key focus for banks amidst the growing competition from new startups and fintech companies in attracting younger generations of workers who offer fresh perspectives that align with the  increasingly diverse customer base in banks. They also bring valuable technology and data skills that banks need to thrive in an age of digital disruption.

As the most diverse and educated generation in the workforce, they are increasingly demanding diversity and inclusion in the workplace. According to a report from ManpowerGroup, 56% of Gen Z say they would not accept a job in an organisation that did not have diverse leadership.

The challenge of underrepresentation of women is particularly acute in banking leadership roles. For example, women occupy only 30% of top management seats at major US banks, and this figure is even lower at top European banks (25%). In Viet Nam, women are strongly represented in the banking sector, yet they remain absent from many senior leadership positions. They are underrepresented in senior (33%) and top-level (26%) management roles.

The significance of D&I

Diversity and Inclusion are interconnected but each term has its own meaning and implications. Diversity refers to the demographics of the people in your organisation, including who they are, what their genders are, which generations they belong to, which cultures they come from, etc. Inclusion refers to how they experience the workplace and how much they are embraced within the organisation and enabled to make meaningful contributions.

Companies that are diverse and inclusive are shown to have a better quality of decision-making, are better at driving innovation, create advantages in talent acquisition, and are better at aligning themselves with different customer bases. All these key areas will ultimately affect an organisation’s performance.

A report by McKinsey shows that there are clear correlations between diversity and business performance. Their analysis of 2019 data shows that companies in the top quartile for gender diversity within which executive teams were 25% more likely than companies in the fourth quartile to have above-average profitability (up from 21% in 2017 and 15% in 2014). In particular, the greater the representation of gender diversity, the higher the likelihood of outperformance. For instance, companies where more than 30% of the executives are women were more likely to outperform companies where this percentage ranged from only 10 to 30%. The most gender-diverse companies see a substantial differential in the likelihood of outperformance (48%) over the less gender-diverse companies.

Fostering D&I environment

Despite the profound positive impact of D&I, many challenges remain in fostering a more diverse and inclusive workplace, namely an absence of a holistic approach, a low level of leadership involvement and/or a lack of data and effective measurement methods, etc. However, there are a large number of ways to remove such barriers.

First, D&I should not be considered as a standalone matter. It should fit into the overall business strategy. In particular, D&I should become a prominent aspect of ESG agenda of an organisation. Hence, it needs a comprehensive approach to make a difference, not just be limited to fun activities. For instance, at HSBC, we aim to become a truly inclusive business by focusing on 4 key pillars: fair and inclusive recruiting, progression of under-represented talent, building an inclusive culture, and supporting an inclusive society.

Second, we all need to set specific targets and goals for increasing diversity and promoting inclusion. These are enabled by building good diversity data which helps us to target our actions, measure progress and hold ourselves to account. Let us take HSBC as an example. We have set a goal to reach 35% of senior leadership roles being held by women by the end of 2025 and we remain on track with 34.1% achieved as at the end of 2023. We also have an inclusion index to look at how inclusive our culture is, by measuring colleagues’ feelings of belonging, psychological safety, perception of fairness and trust in our annual all-employee engagement survey. At the end of 2023, we had 78% of team members who felt we were creating a favourable environment – this is three points higher than our goal and two points above the financial service industry benchmark. That said, we cannot rest on our laurels, we all have a duty to positively influence our culture each and everyday. There is no finish line.

Third, businesses should double down on employee resource groups or committees. The more organisations expand, the more likely employees can feel disconnected. Building employee resource groups or networks is a good way for groups of people to stay connected at work, especially at large corporates. At HSBC, we have eight global networks made up of local employee resource groups: HSBC Ability (disability), HSBC Balance (gender), HSBC Embrace (ethnicity), HSBC Faith (faith), HSBC Generations (age), HSBC Nurture (parents and carers), HSBC Pride (LGBTQ), HSBC Communities (common interest communities such as Mindfulness, Wellbeing and Flexible Working).

Last but not least, it all starts from the top because business leaders are the ones who shape the policies, model them and embed them within their own organsations. It is not just about a verbal commitment but setting a real and meaningful example by encouraging everyone across the organisation to take actions that positively drive D&I. As the CEO of HSBC Viet Nam, I signed the Viet Nam Panel Pledge in 2022, committing to actively challenge the absence of female speakers at events, roundtable discussions, and public conferences or forums, by discussing panel composition with event organisers, recommending female speakers, and creating a positive mindset for the inclusion of women in all discussions. First launched in 2019, the Vietnam Panel Pledge has been signed by 8 consul generals, 34 business leaders, and 10 chairpersons and executive directors of chambers in the country. Actually, this not something new in the world. The Panel Pledge first started in 2012 globally, in an effort to substantially improve women’s representation in public and professional forums. This has been widely adopted since then as it’s truly effective and simple to implement. Therefore, I do hope to see more men joining us in taking the pledge to amplify its impact in Viet Nam.

Overall, we have made progress, but we know we still have more to do in D&I space. When we get this right, we will all benefit from the richness of different backgrounds, experiences and perspectives and create a positive environment where everyone has a genuine chance to be at their very best at work.