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Diversity and inclusion (D&I) in the service sector

In today’s rapidly changing business world, diversity and inclusion (D&I) in the professional services sector is becoming not just a moral imperative, but a key success factor. Covering areas such as consulting, law, accounting and information technology, the sector faces the challenge of adapting to a globally diverse labor market and clientele. Implementing D&I is no longer an option, but a necessity, enabling companies to build more creative, innovative and resilient teams.

The current state of D&I 

Statistics on D&I (diversity and inclusion) in the professional services sector shed light on the significant impact these practices have on organizational effectiveness and innovation:

  • From 38.6% in 2019 to 40% in 2021, the proportion of women holding the rank of manager or higher at the company increased. / KPMG REPORTS.
  • 32% of employees and job seekers would not apply for a job at a firm with poor diversity and inclusion. / KPMG REPORTS.
  • 36% more likely to financially outperform their competitors are companies in the top quartile for ethnic diversity. / KPMG REPORTS.
  • Diverse teams are 60% faster at effective decision making and 3 times as likely to be high-performing organisations. / KPMG REPORTS.
  • 87% of the time, diverse teams outperform individual decision makers, while non-diverse, all-male teams make better decisions only 58% of the time. / KPMG REPORTS.
  •  49% of employers are focusing on diversity to better understand consumers. / KPMG REPORTS.
  • Nearly half (48%) of companies prioritize DEI by including it on the board agenda, while 38% stated that CEOs’ compensation is tied to DEI. / KPMG REPORTS.
  • Women left the workforce at twice the rate of men, and their participation in the working world reached its lowest point in the past 30 years. / KPMG REPORTS.
  • 35% of companies don’t have a senior executive leading DEI efforts. / KPMG REPORTS.
  • Over the past fiscal year, the representation of women among our client-serving professionals has seen slight increases of 2% at the senior manager rank and 1% at the manager rank, remaining consistent overall. / EY Reports
  •  In 2020, our US Partner/Principal Council (PPC) saw a 4% increase in Asian representation across racially and ethnically diverse groups.  / EY Reports
  • 45% of respondents believe diversity is best represented at work, second only to home  / EY Reports
  • 34% of respondents, more than one-third, feel the greatest sense of belonging at work.  / EY Reports
  • 40% of our full-time new hires from college campuses are racially and ethnically diverse professionals. / EY Reports
  • Women account for 41% of our experienced new hires.  / EY Reports
  • Almost 50% of our experienced new hires are racially and ethnically diverse professionals.  / EY Reports

These figures show how crucial it is to promote D&I in the professional services sector, not only for ethical reasons, but also as a way to make companies more competitive and innovative.

Challenges and Barriers to D&I in the Professional Services Sector

The challenges and barriers to D&I in the professional services sector are varied and comprehensive. The first is that only two-fifths of organizations have mature DE&I initiatives, indicating poor support and development of these programs. Most organizations acknowledge that their workforce has become more diverse over the past two years, but many still do not fully reflect the demographics of the market in which they operate. This problem is particularly pronounced in small organizations.

Communication Barriers and Prejudice

Communication is another challenge, where language and cultural barriers can lead to misunderstandings and conflict. Stereotypes and prejudices also negatively affect cooperation between employees, leading to isolation and fragmentation of teams. Trust between employees from minority and majority groups can be limited, making open communication and cooperation difficult.

DE&I Implementation Challenges

In addition, there are many challenges to DE&I implementation, including a lack of strategies to measure progress, insufficient financial resources that prevent the creation of an authentic DE&I culture, and difficulties in responding quickly to DE&I issues, which often leads to crises. It is also important for leaders to take responsibility for implementing DE&I initiatives and adapt their management style to the needs of the organization.

Key to Business Success

Addressing these challenges requires commitment at all levels of the organization and an understanding that D&I is not just a responsibility, but a key component of business strategy. Also challenging are cultural biases that can hinder the effective integration of DE&I in the workplace. By adopting D&I as an integral part of organizational culture, companies can not only overcome these barriers, but also unlock the full potential of their global workforce.

How D&I Contributes to the Development of the Sector 

D&I (diversity and inclusion) is fundamental to the development of the professional services sector, contributing to innovation, growth and competitiveness. Firms that successfully implement D&I strategies gain access to a broader spectrum of employees, which is crucial in an industry that relies on knowledge and skills. Diverse teams are more creative and better able to solve problems, leading to innovative solutions for customers.

D&I as an Element of Expansion into New Markets

In addition, companies with strong D&I programs are better able to meet the needs of a globally diverse customer base, enabling them to expand into new markets. Customers increasingly expect service providers to reflect the values of diversity and inclusion, making D&I not only an internal issue, but also a component of building customer relationships.

Impact of D&I on Brand Reputation

Commitment to D&I also translates into brand reputation. Companies recognized as leaders in D&I are seen as more innovative and socially responsible, which attracts both employees and customers. In the professional services sector, where trust and credibility are key, this perception can have a direct impact on financial performance.

D&I and Employee Engagement

Finally, promoting diversity and inclusion helps reduce employee turnover and increase employee engagement. Employees who feel respected and valued for their unique perspectives are more motivated to work with a company over the long term, reducing costs associated with recruiting and training new employees.

Global Perspective on D&I in the Services Sector

The Global Perspective on D&I (diversity and inclusion) in the professional services sector reflects the growing global understanding that workforce diversity is critical to innovation, customer understanding and performance in diverse markets. As companies expand into new and often culturally diverse markets, the ability to attract and retain talent from diverse backgrounds is becoming a critical success factor.

The Role of D&I in the Global Economy

In a global economy, where transactions and collaborations often take place across borders and continents, professional services firms that promote D&I better understand the needs of their international clients and can offer more personalized and effective solutions. D&I also contributes to building global teams that are more creative and innovative through a diversity of perspectives and experiences.

Attracting Talented People through D&I

In addition, involvement in D&I can help companies attract talented people, which is especially important in industries such as consulting, law, finance and IT, where competition for top professionals is intense. Companies that are perceived as integrated and open to diversity are more likely to attract and retain high-caliber professionals from around the world.

Cultural and Regional Biases 

Cultural and regional biases in the professional services sector can be a major obstacle to building effective global teams and establishing and maintaining relationships with clients around the world. These biases, often rooted deep in unconsciousness, can affect hiring processes, promotion decisions, and day-to-day workplace collaboration, leading to misunderstanding, conflict and reduced team effectiveness.

Strategies for Overcoming Prejudice in the Workplace

To counter these biases and build a more inclusive workplace, companies must invest in cultural awareness training, promote diversity at all levels of the organization and develop policies that support equality. Such measures not only help break down existing barriers, but also contribute to creating a work environment where every employee, regardless of their background, feels respected and valued.

Importance of D&I in the professional services sector

The importance of D&I (diversity and inclusion) in the professional services sector cannot be overstated, both from an internal and external perspective. Internally, promoting diversity and inclusion culture contributes to a more innovative and creative work environment. With diverse teams, firms can benefit from a wider range of perspectives, which in turn leads to better problem solving and innovative solutions for clients.

External Perceptions and Global Expansion

From an external perspective, professional services firms with strong D&I initiatives are better perceived by clients and prospects, which can contribute to increased client loyalty and satisfaction and business growth. In addition, in a global business world where professional services firms often operate in multiple markets, the ability to work effectively in diverse teams and understand different cultures is key.

Attracting and Retaining People

Finally, commitment to D&I helps attract and retain people. Today’s employees are not only looking for attractive compensation packages, but also want to work for companies that share their values about D&I. Companies that are seen as workplaces that promote diversity and inclusion are more likely to attract the best professionals from diverse backgrounds, which is key to continued growth and innovation.

D&I as an Element of Business Strategy

In summary, D&I in the professional services sector is no longer just a social or moral issue, but has become a key element of business strategy, affecting innovation, company reputation, client satisfaction and the ability to attract and retain people.

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