Diversity and Industry 5.0

Why diversity and inclusion fit in with a more human approach that will bring stability and success to forward-thinking companies.

Too many businesses think that diversity is a box-ticking exercise – they might add black or female faces to their company brochure, but behind the scenes, nothing changes. But diversity is not just a hurdle to be overcome, or a brake on hiring the best people. The business case for diversity in and of itself has never been stronger, or clearer, especially as we move from Industry 4.0 into Industry 5.0. Put simply: if you don’t invest in your people, they won’t be invested in your business.

A variety of different backgrounds and cultures in the workforce provides insight, balance, greater innovation and creativity, happier employees who stay for longer and increase productivity. In the US, consultancy McKinsey describes a positive correlation between business success and greater numbers of female and ethnic minority staff: a US$12 trillion in additional GDP if the gender gap is narrowed by 2025, and $2bn in potential revenue if financial inclusion efforts broaden services for black Americans.

A fifth industrial revolution

Industry 4.0 was the fourth industrial revolution – enabled by developments in automation, big data, artificial intelligence and so on. Now commentators, such as the European Commission (EC), talk about Industry 5.0, which while building on the efficiency and productivity of 4.0, makes worker wellbeing, sustainability, and societal value integral to business. 

Key to this is a human-centred strategy, says the EC, that promotes talents, diversity and empowerment. Good skills and talented workers have always been a competitive advantage but have become even harder to hang on to than customers as social changes lead to employees seeking a greater work/life balance and wanting firms to effect positive social change. 

Diversity fits into a future where success is not judged merely by monetary gain, but by what a business adds to the store of innovation, creativity and human dignity

By putting their people at the heart of their business, even, the EC predicts, over profits or efficiency, companies are being asked to radically rethink what they are doing and why they are doing it – a strategy fit for a world that, under the pressures of climate change, may literally be crumbling around us. Diversity fits into a future where success is not judged merely by monetary gain, but by what a business adds to the store of innovation, creativity and human dignity.

The business case

What about the bottom-line business case for diversity? In its 2018 report, Delivering through diversity, McKinsey found: “Companies with the most ethnically diverse executive teams – not only with respect to absolute representation but also of variety or mix of ethnicities – are 33% more likely to outperform their peers on profitability.”

Forbes says that decisions made and executed by diverse teams delivered 60% better results and inclusive teams made better business decisions 87% of the time. 

And what of the print industry? There is often a visible lack of black, minority and ethnic (BME) attendees at trade shows. The print sector has a reputation for being male-dominated, like much of the manufacturing sector. And although there are plenty of successful women in the industry, according to the British Printing Industry Federation, the UK print industry is made up of 69% men and 31% women, with women less likely to have production roles and a large gender pay gap. One of the silver linings of COVID was its opening up of smarter, more flexible working patterns, which often benefits women. Employees value work/life balance, quality of life and fair pay, and you will suffer high turnover without valuing it too.

Some may feel that diversity is not achievable in what they think will always be a white, male-dominated workforce. But the print industry is not an island: digital revolution has made printing a far more technical, creative industry that requires a young, motivated workforce. 

Managers should look at unconscious bias and training, as well as stamping out ‘banter’ that can veer into offensive behaviour and establishing guidelines for what is acceptable humour

Printers, like those in many other industries, should take into account the diversity of their workforce. This could include allowing fidget toys for the neurodiverse during meetings, being accepting and understanding of the menopause, respecting the pronouns of non-binary staff, or understanding that Muslim staff may be fasting during Ramadan. A human-focused approach will let employees feel safe, respected and happy, and less likely to cause another round of costly hiring and training. Managers should look at unconscious bias and training, as well as stamping out ‘banter’ that can veer into offensive behaviour and establishing guidelines for what is acceptable humour.

Of course, simply hiring more diverse staff on its own does not itself lead to success. In fact, added to a company that changes nothing else, diversity can actually lead to division and conflict. This is why the word ‘inclusion’ is being increasingly tethered to the word ‘diversity’. Robin Ely and David Thomas, writing in the Harvard Business Review, deny that, although diversity can improve corporate financial performance, this should be the entire business case: “When diversity initiatives promise financial gains but fail to deliver, people are likely to withdraw their support for them.”

They identify four key actions managers should take to allow women and people of colour to thrive: to build trust; to actively work against discrimination and subordination; to embrace a wide range of styles and voices; and to encourage and draw lessons from cultural differences. Only after creating the conditions that enable diversity to add value can companies reap the benefits.

Hiring processes should add layers to the interview process to ensure the person is the right fit

Anyway, Ely and Thomas conclude that a financially orientated case is flawed: “Why should anyone need an economic rationale for affirming the agency and dignity of any group of human beings? We should make the necessary investment because doing so honours our own and others’ humanity and gives our lives meaning. If company profits come at the price of our humanity, they are costing us too much.”

Firms cannot afford just to pay lip service to diversity and inclusion, for example by recruiting only front-office or junior staff, whose progress then stalls. The solution to improving diversity is to recruit young people, of all sexes and ethnicities, and not just in the front office. Firms should mentor diverse staff members, create a welcoming environment and close up the gender pay gap. Hiring processes should add layers to the interview process to ensure the person is the right fit.

Companies who fail to retain a more equitable mix of people will find that their shortcomings are exposed by a younger workforce who are motivated by Industry 5.0’s promises of a human-centric world of work.