While diversity and inclusion programs have been around for decades, particularly in large companies, the social movements that came to a head in 2020 accelerated adoption and evolved the function. Corporations shifted their priorities to include formal diversity, equity, and inclusion (DEI) programs; 71% of S&P 500 companies have a DEI officer. Since the 1970s, manufacturing has remained a primarily male and White industry. With the new expansion in DEI programs, has the industry progressed, and what areas remain a challenge for newly formed DEI teams? Let’s dig in.
In 2022, Manufacturers Alliance surveyed DEI leaders across industry. In comparison to pre-pandemic data, 48% of manufacturers found DEI objectives to be “much more important,” and additional 43% noted they are “more important” than prior to 2020. Yet, the business case to incorporate DEI initiatives appears to still be in the development stage for some manufacturers. While a mid-2020 article from Forbes examined how 404 of the Fortune 500 companies suggested “diversity was important because it would contribute to their profits or bottom line in some way,” 40% of Manufacturers Alliance respondents were not sure how DEI will deliver business value. With an expected global DEI market of $15.4B by 2026, corporations are expected to invest heavily in this space. The challenge will be how to achieve real change across DEI as over 65% of employees across all industries are of the opinion that their managers do not currently foster an inclusive environment.
Perception of DEI in Business
Once business leaders have decided the importance of their DEI efforts, gauging awareness among employees can be challenging. In our survey, none of the respondents believed that ALL of their workforce was aware of the importance, but the majority (97%) said that some or most of their workforce understood that DEI efforts were critical to achieving business results.
DEI is most often implemented as a top-down strategy, separating the decision from wider organization participation. Across our respondents, 33% of individuals describe DEI as a “general leadership initiative,” and 31% categorize DEI under a “human resources initiative.” There is a strong consensus that the CEO and CHRO have the final decision-making authority, at 60% and 38%. Chiefs or Heads of DEI are not those making the final call as only 17% of participating companies have DEI leaders with that power.
When it comes to awareness about the importance of DEI efforts to achieve business results, which of the following best describes the current state of the following:
Translating initiatives to action proves to be more difficult when working beyond the executive suite. Adopting a systematic approach for newly developed programs is hitting barriers across middle- management. Resistance in middle-management and unconscious bias are the two top barriers to achieving DEI goals, followed by majority group social norms, and competing priorities. Internally to employees, some face the challenge with fear or a lack of awareness.
In your personal opinion, how significant are the following barriers to achieving your business' DEI objectives?
Strategies do exist to combat the resistance. Working through challenges with middle-management included in the decision-making process creates autonomy, driving a “how” narrative instead of “why.” Training programs and ownership by navigating challenges collectively, and recognizing short-term and long-term KPIs or progress, help solidify company plans for DEI program execution.
People Forward Initiatives
DEI initiatives in manufacturing are not new. Women have been a long-time focus for 55% of respondents, followed by ethnic minorities and people of color at 36%, and veterans with 24%. The areas of focus for DEI efforts follow the wider variety of employee groups who gained traction with more recent inclusivity efforts. People with disabilities had the largest jump, with 43% of companies entering the early stages of DEI initiatives, up from 10% who were already considering this group. In 2020 across all companies, only 4% of companies prioritized disability diversity in those initiatives. Failing to increase accessibility in the workplace could exclude about 15% of the population who live with a disability.
Please indicate the employee groups that are the focus for your business' DEI efforts
For hiring and organizational diversity advantages alone, those numbers are significant in a time of high turnover rates. Those who have taken action to promote disability inclusivity recognize flexible work options, wellness benefits beyond mental health benefits, such as programs around sleep, nutrition, fitness, and financial planning, and options to request accommodations for interviews as next to standard practice as awarded in the Disability Equality Index.
The LBGTQ+ community is also gaining traction, with 40% of companies working on early-stage initiatives, up from 10%. Currently, only 20 states and D.C. have laws prohibiting discrimination based on sexual orientation and gender identity. Companies have inclusive policies even when not required by law, as 76% of Fortune 500 companies have sexual orientation in their U.S. Nondiscrimination Policy, and 68% include gender identity. Unfortunately, policies do not always equate to individual experience. One-in-ten LGBTQ+ people still experience workplace discrimination across the United States. Changing workplace culture continues to be at the heart of concern and benchmarking as organization recognition grows.
Comparatively the groups that are not a focus nor have much traction to gain attention within DEI programs include religious groups, individuals over 50, and Generation Z as defined by our study.
Curious to see how your state compares in manufacturing employment? Interact with the chart below for some further insight.
Embodying a People Forward Culture
DEI program effectiveness ranges are based on the unique culture and approach of every organization. If you are a manufacturing DEI leader, learn more about our Diversity & Inclusion Council and how membership can support your efforts.