Diversity, equity, and inclusion (DE&I) is vital in the business arena. Palladium Group has taken a leading role in advocating DE&I within the consulting sector, understanding its vital role in driving value creation, business growth and improved staff retention.

A driver for success

The business case for DE&I is compelling and research repeatedly affirms the commercial business case for it. It is no longer a ‘nice to have’ element but a critical driver of business success. According to some reports, companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.

In terms of gender diversity, other reports suggest that companies in the top quartile are 15% more likely to outperform their peers. DE&I also significantly contributes to business growth, with reports that companies with more diverse management teams have 19% higher revenues due to innovation. This fact highlights the importance of DE&I for innovation and suggests that diversity is not just a metric to strive for, but an integral part of a successful revenue-generating strategy.

DE&I is no longer a ‘nice to have’ element but a critical driver of business success

Retention rates also improve with a diverse workforce. A study by Glassdoor found that 67% of job seekers consider workplace diversity an important factor when considering employment opportunities. Moreover, inclusive companies are more likely to have engaged employees, with a Gallup study revealing that highly inclusive organisations generate 1.4 times more revenue and are 120% more capable of meeting financial targets.

PE’s responsibilities

Private equity firms have a unique opportunity and responsibility to promote DE&I. Embedding DE&I into their investment criteria can encourage portfolio companies to prioritise these factors, influencing the broader ecosystem and shaping the future of business. PE firms should also ensure DE&I within their organisations. This initiative starts from their recruitment strategies, ensuring diverse representation and fostering a culture that values different perspectives.

At Palladium Group, we’ve seen the positive impact of this approach firsthand. Our diverse team brings a range of perspectives that lead to better outcomes. Diversity brings divergent viewpoints that can lead to innovative solutions, and while we are still on a journey towards a smooth-working DE&I model, setting out on the road is an important step too.

Carla Crystal, consulting manager at Palladium London, shares: “The people within Palladium create an inclusive environment where I feel heard and respected. My voice and contributions are valued.”

Internal and external

It’s not enough to just talk about DE&I; action is necessary. Companies must implement policies that accommodate all people. This can range from flexible work arrangements and parental leave to mentoring programmes that support underrepresented groups. At the same time, DE&I should not be the sole responsibility of HR. Instead, it should start at all levels of the business. Each employee from top to bottom must champion DE&I in their daily interactions and decision-making processes.

Each employee from top to bottom must champion DE&I in their daily interactions and decision-making processes

We are actively working towards implementing certain practices, with some already on our roadmap for future integration. These steps are also part of our ongoing endeavour to integrate these practices into our clients’ operating systems. This can include the following:

1. Internal infrastructure: Google, for instance, has an entire team dedicated to DE&I called the ‘equity programmes team’. This team’s mission is to make Google the industry leader in equity through systemic change, accountability and community-building.
2. Active inclusion training programmes: A simple training methodology that trains employees to understand unconscious biases and the importance of psychological safety at work.
3. Employee resource groups: One of the easiest ways to share knowledge is to pool knowledge. Everyone who contributes is making a difference.
4. Clear targets: More difficult and prone to most debate is to set clear, measurable targets for diversity and inclusion. Some sectors may aim to achieve a gender-balanced workforce within a few years of setting the targets.
5. Transparent reporting: If you back yourself, then committing to transparency and perhaps even publishing a detailed annual report on progress towards DE&I goals can only encourage others to follow suit. Be the change you want to see.
6. Flexible working arrangements: This can go beyond post-Covid hybrid working to update and redefine productivity measures, giving employees the flexibility to choose their working hours and location, and accommodating diverse needs and circumstances.

The way forward

As we move forward, one thing is clear: DE&I is not just a tickbox exercise. It is an ongoing commitment and a crucial part of business strategy that offers tangible benefits. At Palladium, we believe in leading by example. We are dedicated to fostering a culture of DE&I and we encourage other firms, especially in the PE sector, to do the same.

With concerted efforts, we can create an inclusive business environment where everyone feels valued, leading to better business outcomes and a more equitable world.

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