The racial reckoning of recent months has raised the bar for business leaders. It is no longer enough for them to simply understand that a diverse group of employees, managers, executives and board members creates better results. They need to have the commitment and motivation to act as well as the fortitude and patience to improve the work environments they oversee. Whether it is diversity in age, ethnicity, religion, identity or gender, companies that support a diverse and inclusive culture will find greater success than those that do not.
And the data proves it. Articles from McKinsey and Boston Consulting Group (BCG) highlight how revenue, profit and performance are impacted by diversity and inclusion (D&I), and these numbers are significant.
According to BCG, companies with diverse management teams experienced a 19% increase in revenue, compared to others with less diversity. McKinsey also reports racially and ethnically diverse companies are 35% more likely to perform better.
When D&I intersect with one another, good things happen. So, across the insurance industry, how are its leaders responding to the events of recent months and ensuring their employees are engaged in creating a more diverse culture that fosters inclusion and innovation?
Where We Stand
While there is still plenty of work to do, George Floyd’s death and the protests that ensued elevated the critical conversations taking place in the insurance industry around D&I and added a sense of urgency. We have also realized we have much to unlearn and relearn about leadership, understanding people across a spectrum of differences, and thinking about bias and equity in different ways.
Recent events have exponentially ratcheted up efforts by the insurance industry to build its talent agenda and understanding of cultural issues. The industry has continued to make changes and adopt technology and strategies that create a more diverse and inclusive workplace. Management is also tying these initiatives directly to company strategies and missions.
Smart leaders are thoroughly examining their talent practices and the experiences of their employees. They are analyzing their workforce to assess where their talent comes from, how people move through the organization, what levers work best to retain people, and what employees experience while at the organization.
Many in the industry have also been working collaboratively to foster diversity by forming partnerships with groups like Gamma lota Sigma, a business fraternity tailored to students interested in pursuing careers in insurance, risk management and actuarial science, and the National African American Insurance Association. Additionally, networking organizations and events such as those sponsored by the Insurance Industry Charitable Foundation (IICF) bring together a community of people and organizations focused on targeted initiatives that provide business and networking opportunities and advance D&I, which result in real business outcomes.
Insurance industry consortiums allow for businesses and associations to share best practices, discuss challenges and problem solve together. By working with associations advancing the cause of D&I, insurance companies are working to become more socially responsible. And social responsibility is a key factor in attracting talent just entering the workforce or who are early in their careers.
Tapping Talent for the Future
For the insurance industry, branding has been an issue that has led to a talent gap in the space. As today’s insurance professionals retire, it is imperative that the industry attract additional talent with different skills, backgrounds and ideas.
People in the millennial and Gen Z generational cohorts are attracted to jobs that give them a purpose. They are also drawn to companies that live up to their social responsibility to create a better world. With both generations being more ethnically diverse than the ones before them, these new members of the workforce are looking for jobs where D&I is a priority. Insurance organizations that want to be seen as employers of choice must act in kind. Leaders must realize that creating a diverse, innovative and inclusive environment for employees is crucial to attracting new talent.
In turn, these new entrants bring with them innovative ideas, unique backgrounds and individual beliefs. Combined, these attributes only further the company’s efforts to establish a workplace that draws in the skilled employees it is looking for, while continuing to champion the goals of D&I. A broad slate of candidates being recruited to an insurance company means. It makes a difference in the workplace. A diverse team also benefits the business by bringing a broad range of skills and abilities that allow them to resolve issues much more creatively.
Leading by Example
None of this is possible without adoption at every level of the corporate ladder. From C-suite executives through interns fresh out of school, if a company wants a more diverse and inclusive workplace, everyone must play a role.
More and more C-suite executives in the insurance industry are prioritizing D&I initiatives and holding their organizations accountable for creating inclusive workspaces. It is important not only for these leaders to make (and keep) commitments and pledges that are aspirational, but also to encourage complex conversations surrounding diversity and innovation within the industry.
Before engaging in the conversation, CEOs and other C-suite executives looking to do more to create a more diverse and inclusive workforce may want to first consider thinking about their own personal diversity story.
They may ask questions like “Why is diversity and inclusion important to me? To my team? To my business?” and “How does innovation affect the way our company grows?” After reflecting on their personal experiences, doing their own research and formulating their thoughts, these leaders can then have honest conversation with their teams of employees.
It is vital that these leaders be open and authentic during these conversations. Being humble and vulnerable during these discussions makes it real to employees and will encourage them to engage in the discussion. Active listening has to be a priority across the board. Enabling an environment that promotes candor and transparency will build better bridges among the team that lead to the most impactful changes throughout the organization.
Starting these conversations without providing context will be a fruitless endeavor, however. Employees must know why they are doing what they are doing. They must understand why these conversations around D&I are being had and how they tie into the business’s goals and success. It requires two-way listening, interaction and give and take on all sides. The conversation may be challenging, but it will be more effective with these components.
The insurance industry, at its core, is about helping people in their time of need as well as showing compassion, understanding and having a purpose. This big picture perspective is not far off from what is at the core of D&I. It is about a personal connection to unite across differences. And it is why the D&I perspective is so closely related to what insurance professionals care about.