By Zena Gridley, Partner. Operational Restructuring, PwC
The past two years have pushed operational resilience to the limits. Even as the economy stabilises and the focus shifts to the future, there is no let-up in the operational upheaval ahead.
Immediate drivers for operational restructuring include the need to manage rising costs in areas such as energy and materials. Many businesses are also looking at how to get operations onto a stable and sustainable footing following the rapid adaptations needed to steer through the crisis, and the subsequent challenges of getting operations back up speed.
Looking ahead, it’s important to identify and deliver the capabilities needed to deal with disruption and keep pace with fast-changing customer demands. What’s clear from my work in operational restructuring is that talent, skills and workforce engagement are as important, if not more important, than technology within this operational modernisation.
So where do diversity and inclusion fit into this workforce and wider operational shake-up? Research carried out for our latest Act Now restructuring report, From recovery to growth, underlines the extent to which diversity and inclusion and related environmental, social and governance (ESG) considerations are now central to how your business is expected to operate.
What also comes through strongly from the survey of 400 business leaders is that diversity and inclusion can help to future-proof your organisation. Nearly three-quarters of the people surveyed feel that the COVID-19 pandemic has increased their commitment to diversity and inclusion.
When asked about the major benefits of prioritising diversity and inclusion within change management or restructuring, nearly three-quarters also cited the positive impact on innovation and growth.
In turn, a significant proportion pointed to employee engagement and attracting top talent.
Source: Act Now: From recovery to growth survey, PwC, 2021
But what about costs? What about steering through the labour shortages that are holding up supply and disrupting production? Again, we’re seeing how looking at operations through a diversity and inclusion lens can make a real difference in these otherwise hard to manage areas.
A prominent example is overcoming the shortage of HGV drivers. Although this hit the headlines as a result of the fuel shortages in the autumn of 2021, the problem has been building up for years. And while a lot of attention has been focused on pay, conditions and the loss of drivers from the EU, another reason is that half the UK population can’t – or don’t presently want to – get near the wheel. Only 1% of truck drivers are female. The proportion of drivers from ethnic minorities is also disproportionately low.
The shortage of HGV drivers is exacerbated by an ageing workforce – 29% are aged 56 or over, compared to 20% who are 35 or under. Looking at the transport sector more broadly, vehicle technicians, mechanics and electricians have the dubious distinction of being Britain’s most male-dominated jobs.
The obvious solution to this limited and shrinking talent pool would be to attract more women and people from ethnic minorities. But recent research by the Office for National Statistics (ONS) has highlighted a number of issues holding back more diverse recruitment and retention including gender stereotyping, inappropriate behaviour and inflexible working practices.
We’ve seen in other industries how such barriers to diversity and inclusion can be tackled. As the ONS report highlights, the first step towards change is recognising that it’s necessary. Yes, moving the dial takes time. But broadening recruitment is the only lasting way to alleviate driver shortages and the resulting disruption and costs. So where could you begin this more diverse recruitment drive? A readily available starting point would be the diverse and road-savvy population of cab/ taxi drivers and bus drivers. They’ll need training to become HGV drivers. But having driven professionally and worked on shifts, they know what’s involved and many would appreciate the opportunity.
A further look at operations through a diversity and lens highlights the importance of flexibility in strengthening retention. In a telling example, a logistics company had been spending a lot of money trying to hold on to female delivery staff or replace them if they left. It emerged that a lack of flexibility over shift patterns was contributing to the high rates of staff turnover. This included clashes with school drop off or childcare arrangements. Simply giving drivers greater say in when they work could overcome these issues. Customers might not get their parcel at 4pm, but that is surely better than having too few drivers to meet demand overall.
Clearly, problems with recruitment, retention and their operational impact go beyond transport. Construction is a similarly male-dominated sector in which many businesses are struggling to fill vacancies and hence deliver projects on time. Within the professions, women make up less than 10% of IT, mechanical and production engineers.
The need to bring diversity into the strategic conversation about operational sustainability across these and other sectors is therefore clear.
Similarly, remote working during the pandemic has paved the way for more flexible, autonomous and work-life balanced hybrid working arrangements. But some employers still view people who work flexibly as lacking commitment, even if there are no grounds for this. They’re missing out as a result. Embracing this kind of working would improve engagement, loyalty and retention, all of which are crucial in ensuring sustainable and efficient operational capabilities.
So, how can your business turn diversity and inclusion into an operational and wider competitive differentiator? The starting point is ensuring that diversity and inclusion are on the business agenda from the outset. This would be supported by the data and key performance indicators (KPIs) to look at your operations through a diversity and inclusion lens, track performance and drive improvement and innovation.
Unfortunately, this kind of data gathering is rare right now. Less than 30% of the businesses in our From recovery to growth survey have measures in place to monitor both inclusion and diversity. Better data and tracking would help to identify the problem-solving potential and how this can be realised. It would also help to identify barriers to progression and any biases and discrimination within the organisation.
So, rather than thinking about diversity and inclusion as just a nice-to-have or simply a reputational issue, they could be the solution to operational problems, a cornerstone of competitiveness and a way to future-proof your business.
To find out more about the key role of diversity and inclusion in delivering successful restructuring and change, register for a free copy of our From recovery to growth report. I for one found the survey fascinating. It’s also hugely encouraging to see how many business leaders are embracing the diversity dividend.
Partner, PwC United Kingdom
Tel: +44 (0)7590 354078