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Socioeconomic diversity: 5 tips for companies to increase it

December 12, 2022

Despite the efforts of companies to promote diversity, equity and inclusion (DE&I) among minority groups, such as women, blacks and the LGBTQIA+ community, the most significant part of the social pyramid has been left aside from affirmative action: the poorest. Less than one third (32%) of the companies have initiatives that promote the inclusion of people in less favorable socioeconomic conditions.

This is the conclusion of the study “Socioeconomic diversity in the workplace – why and how companies can contribute to equity and inclusion”, conducted throughout 2022 by consultancy McKinsey & Company with more than 5,400 employees and entrepreneurs in six Latin American countries: Argentina, Brazil, Chile, Colombia, Panama, and Peru.

The researchers found that professionals who have risen through the ranks and now have better socioeconomic conditions and more years of education than previous generations of their family, with at least a technical degree, account for only 8% of executive-level positions and 37% of management in companies.

In contrast, people with the same level of education, with at least a technical degree, but who did not face food and health restrictions in childhood and whose parents have higher levels of education, occupy 14% of board positions and 45% of management positions.

While diversity can be a force of good for society and the economy, investment in DE&I also brings substantial benefits to companies. While diversity can be a force of good for society and the economy, investment in DE&I also brings substantial benefits to companies. 

“People who work in companies committed to socioeconomic diversity are nearly twice as likely to agree that their leaders act as role models for the values of the organization and promote trust and open dialogue. These respondents are also nearly twice as likely to agree that their company effectively utilizes talent to generate a competitive advantage, and that it has a clear, compelling, and effectively communicated vision of the company’s future, including their employees’ place in it”, the report shows.

In light of the study’s findings, McKinsey proposes 5 key actions companies can take to effectively promote socioeconomic diversity and inclusion:

  1. Purposefully track workforce composition based on employee’s socioeconomic background, and monitor well-being

​Only 26% of companies mentioned they already track employees’ background – those who do are able to set data-driven goals, implement a bold plan and assess their well being.

  1. Restructure the recruitment process and expand the talent pool

​Only 40% of people from lower socioeconomic background have intermediate level of English or above; reviewing entry requirements can allow companies access these talents – ​ investing in interviewers’ skills​ is also key.

  1. Offer additional company training to allow employees to bridge gaps on hard, soft, and language skills

​People from lower socioeconomic background receive less training than those from higher one, despite of 31% of them mentioning support for higher education degree and upskilling/reskilling trainings, especially on soft skills as one of ​ the most impactful actions a company can implement.

  1. ​Enhance employees’ sense of belonging by strengthening networking, role modeling, and leadership representation

​People from lower socioeconomic background had fewer role models and mentors over their lives (14% lower), promoting networking opportunities and ensuring leadership teams have diverse backgrounds, are some of the ways to promote their inclusion.

  1. ​Include a socioeconomic lens in anti-biased processes to ensure fair progression

​Less than 30% of companies have included bias-checkers in the decision-making process, the ones that did effectively integrate, develop and retain those from lower socioeconomic background through implementing antibias trainings/discussions before evaluation cycles or any relevant internal process.

Source: McKinsey & Company | Valor Econômico