It’s been said that ‘diversity is a fact and inclusion is a choice’. The academic consensus is that diversity and inclusion support better business outcomes, which should be what a profit-focussed business needs to hear – but more firms are also prioritising diversity for the beneficial social outcomes, too.

A downturn begs the question: “Should inclusion, diversity, and equity (ID&E) still be a focus when the technology industry faces a crunch?”

Let’s look at the evidence. McKinsey’s research found a tech talent gap of approximately 1.5m to 4m people, lasting to 2027 for 27 EU countries. It claims that if it were able to double the number of women working in technology to around 45%, these countries could close the gap and benefit from a GDP increase of between €260bn to €600bn (£227bn to £525bn)

These analysts believe that finding and employing 4m additional women is possible by 2027. Going beyond female representation, Harvard Business Review (HBR) advocates, based on its research, that cultivating diversity enables companies to increase their effectiveness.

This business effectiveness boost holds for all under-represented populations. And, with a lot of tech talent coming onto the market through large-scale layoffs, the rest of the world may find the right skills and experience now available to work remotely, adding value locally.

Innovation is a critical growth success factor

Imagination leads to innovation. That’s what tech firms do – solve problems to enable their customers to do more and be more. Innovation is massively accelerated by a diverse team of creators, according to research like HBR’s.

As talent pools change, the business needs to maintain awareness of its diversity metrics, and continually look to create the strongest, most representative teams that can understand their customers and society, and bring their different perspectives to the problems at hand. Despite economic slowdowns, inflation, and supply chain instability, expectant customers are looking not only for good service, but innovation. They want ever-better deals and services. And because the world is diverse and evolving, customer needs change, and so the ability to empathise and personalise becomes critical to growing market share.

People are more likely to buy from or do business with socially responsible brands, so it’s irresponsible not to operate from a diversity mindset to secure every business advantage in the uncertain economic climate.

Start taking action to benefit

The first step in any improvement plan is to understand the current landscape. Understanding the extent of employee diversity will enable the organisation to see how it compares to both the wider society as well as to its understanding of its customers. My own company, PagerDuty, publishes its own diversity dashboard and a public report into Inclusion, Diversity, & Equity (ID&E), annually.

Second, leadership, and specifically the CEO must be a visible and continuous champion for these efforts, communicating their goals for the organisation. Many larger organisations have created Chief Diversity Officers, or added duties to their Chief People Officers.

But HBR noted that these are often not empowered or funded to make real change. Really serious CEOs might take inspiration from David Kenny, CEO at Nielsen, who added the CDO title to his leadership portfolio. He stated this was to, “Set hard targets for ourselves and make those transparent to our board and measure them like we measure other outcomes like financial results.”

PagerDuty’s CEO stated in our most recent ID&E report, that: “The simple existence of company programs that promote diversity does not close the gap unless leaders systematically fund, manage and measure program impact in accountable ways. The role of companies and leaders now extends beyond business to support the progression of a more equitable world.” Setting strong processes in place holds the promise of a much more engaged and innovative team, when practices are embedded and gains are seen.

Our programme focuses on five key workstreams to identify strategies and initiatives to foster inclusion. These are: early career talent, talent acquisition, internal education, engagement and enablement, talent marketing and operations.

Companies can be proud when their workstreams foster higher diversity in their workplace, but the operations side is where the whole workforce can take part and feel the power for themselves. I recommend supporting Employee Resource Groups (ERGs) for staff to collaborate, share experiences, get support, and educate others. Some of these can be based around identities such as gender, ethnicity, or other statuses, and can help surface insights for leadership to consider to improve the business and employee experience.

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All technology companies love metrics. Well-crafted internal employee engagement surveys will help leaders measure, track and hold themselves accountable in promoting equitable outcomes. Without such quantitative data, programmes can’t make the most impact in a changing social landscape.

This is why the Scottish Government wants to increase the number and diversity of entrepreneurs choosing to establish businesses in Scotland, as stated in Scotland’s National Strategy for Economic Transformation, October 2022. It’s part of the Scottish Business Pledge. And it’s why half of businesses in Scotland intend to bring in training and policies to improve their inclusivity.

Taking the right steps in this area will take planning, dedication, and scrutiny, but will become some of the smartest and rewarding business decisions a company can make.