Company Diversity Goals Need to Start With Managers

• Diversity, equity, and inclusion is emerging as a difference-maker between winning companies and the rest of the pack.
• To succeed with these initiatives, companies need to pay greater attention to training line managers.
• "Middle management's attitude toward DEI and their subsequent actions will determine whether a company's DEI efforts will succeed or fail," said Raquel Tamez, chief inclusion and engagement officer at Charles River Associates.

Layoffs, recession fears, and slowing growth are just a few of the major issues business leaders are contending with these days. But one topic is emerging as a difference-maker between winning companies and the rest of the pack: diversity, equity, and inclusion.

There's little doubt that the country, and by extension the workforce, is comprised of a more diverse population than ever before. In fact, Gen Z is the most diverse group of employees at work today. Yet, the gap between DE&I rhetoric and action to address inequities remains massive.

Aniela Unguresan, founder of EDGE Certification, a leading third-party certification for gender and pay equity, is out to change that. Her firm is on a journey to help companies move from talking about diversity, equity and inclusion to concrete results by enabling them to identify and measure what steps are working, who needs to be part of the conversation, and what can be done better.

To elevate awareness of how business-critical DEI is to an organization's long-term health, EDGE has recently partnered with tennis icon and equality advocate Billie Jean King. It was 50 years ago that King founded the Women's Tennis Association to establish equal pay and equal opportunity for women tennis players and underscored her belief by beating tennis champion Bobby Riggs in a groundbreaking match known as the "Battle of the Sexes."

"Billie Jean King's advocacy for equality and her legendary accomplishments both on and off the tennis court are concrete proof that glass ceilings can and ought to be broken," Unguresan said.

Moving the needle on diversity

For a long time, measuring DEI was more of an art than a science. To move the needle, "we need to bring objective measures, standards of what good looks like, and independent third-party certification that brings credibility and visibility to the work companies are doing," Unguresan explained recently to members of CNBC's Workforce Executive Council, Technology Executive Council, and CFO Council.

Like sales targets and other business-critical objectives, DEI needs to involve the entire organization and requires the same rigor and discipline in order to measure success.

"The CEO and other C-suite members outline why this is important and sets the goals," she said. "Subject matter experts are the guardians of the day-to-day actions that measure success, and line managers translate those values into actions every day. It starts at the top and flows throughout the organization."

The role that line managers play in the success of DEI can't be overstated. "Regardless of a CEO's good intentions and the team members' high-level of enthusiasm and energy, middle management's attitude toward DEI and their subsequent actions will determine whether a company's DEI efforts will succeed or fail," said Raquel Tamez, chief inclusion and engagement officer at consulting firm Charles River Associates.

One member of the technology council said things often unravel at this level in her company not from a lack of commitment to diversity and equity, but because line managers are overwhelmed with so many other responsibilities.

The most effective way to remedy that, Unguresan said, is to demystify and educate line managers on what DEI means to the organization.

"Explain why the company believes this is important," she said. "Then go a step further and really detail how diversity, equity and inclusion helps them perform better in their role, as opposed to just another thing you're adding to their plate."

All of this requires ongoing training for managers, but it can't fall entirely on their shoulders, Ungursean said.

Deploy technology

For example, it's important to prepare line managers to have potentially uncomfortable conversations around pay inequity by equipping them with the right information to address it, and to explain what the company is doing about it. But it's equally vital to fortify this action with robust institutional practices.

Here's where technology comes into play. Companies with clear reporting mechanisms and tech-centric tools for employees to anonymously report pay inequity, discrimination, and harassment often fare better than companies without these reporting options, she said.

"Making employees go to the person who decides their career advancement and fearing that it might cost them in terms of career advancement is not the way to do this," Unguresan said.

Some companies are tying compensation and bonuses of line managers to DEI goals to drive progress. Other companies frown upon this practice, claiming that it raises potential legal issues. And while it's true that the actions impacting DEI trickle throughout the broader workforce, some companies start connecting compensation and DEI goals with smaller groups of their most senior leaders first before expanding into the rest of the workforce.

Whatever the choice, Unguresan said companies are at an inflection point when it comes to addressing DEI issues and need to decide where they stand.

"Are you going to use DEI simply as a risk management tool, or as a way to foster diversity of thought, inclusivity, and wage fairness," she said. "The perspective will determine the actions a company takes."

To join the CNBC Workforce Executive Council, apply at cnbccouncils.com/wec.