PROPERTY JOURNAL

Diversity is essential to a successful business

Traditionally slow to react to changes of culture, the built environment sector can benefit substantially from taking a lead on diversity and inclusion

Author:

Amanda Clack
Judith Gabler

15 March 2020

Diversity and inclusion

Ethical practice

Running your business

Diversity and inclusion is a business imperative for attracting top talent into organisations. It is crucial that the built environment sector has a diverse and inclusive workforce that represents the global communities our profession supports and serves.

The range of roles and opportunities that the built environment offers is often misunderstood, which can make competing to attract the best and brightest talent even harder. With this war for talent cited as the number one concern from employers in the RICS report Our changing world: let’s be ready, and reiterated in the Future of the profession: consultation response report, we need to consider how best to ensure diversity and inclusion at all organisational levels and throughout people’s careers.

Our sector is acknowledged to be worryingly behind when it comes to attracting and retaining talent, particularly when it comes to gender pay gap reporting. Insight from PricewaterhouseCoopers on gender pay gap reporting highlights the extent of the problem: ‘the real-estate sector has one of the highest disparities between the proportion of women in the higher-paid quartiles and the rest of the workforce’. Real Estate Balance, an association focused on addressing the gender imbalance in the sector, has however shown that, in the past two years, the sector made considerable progress in flexible working and talent development planning, with around 70 per cent of companies now reported to have a diversity policy. Nevertheless, as the PwC report notes, ‘progress is needed, with many employees feeling impatient about the pace of change, especially on areas such as culture and behaviours’.

Equality Act 2010

It is essential that diversity goes further than seeking gender parity among employees, and that companies embody inclusive practices that embrace all the nine protected characteristics of the UK’s Equality Act 2010, including sexual orientation, age discrimination, disability, race, and ethnicity.

New professionals will want to work for an organisation that shares their values and where there are role models who reflect their career ambitions. Having a positive culture, authentic leaders, flexible working arrangements and supportive middle managers is integral to developing people, serving clients, and playing a leadership role in communities. However, it takes far more than good people management.

To realise the benefits of diversity and inclusion in the organisation, it is vital that strategy is set from the top, as follows.

Set the vision: start with a clear and aspirational vision about how diversity and inclusion is linked to the corporate purpose, showing how these will be embraced and how they reflect the values and culture of the organisation, as well as the practical limitations.
Establish the baseline: identify what the organisation is currently doing, getting an honest and independent understanding from employees and clients as well as from the business metrics.
Write the strategy: once the aspiration has been set, the strategy itself will emerge as the organisation becomes increasingly receptive to diverse behaviours and ways of thinking. It is important to articulate the added value of a diversity and inclusion strategy to stakeholders, and allocate adequate resources and budget to support its implementation.
Set the cultural tone: the organisation’s leaders need to commit to the strategy. They need to avoid leaving it open to misinterpretation as inconsistent messaging or behaviours will be quickly seen by employees as paying only lip service to the strategy; authenticity is key.
Engage stakeholders and change ambassadors: work to identify key stakeholders and ambassadors inside as well as outside the organisation who can give honest counsel and support.
Review governance and measuring progress: setting priorities with clear responsibilities and timelines will ensure that the business monitors progress during the transition. Taking time to celebrate achievements will give greater visibility to success.

The role of CEO as leader means they should understand the capacity for improvement and set the vision for diversity and inclusion. But bear in mind that diversity and inclusion are the responsibility of everyone, and that it is not only the CEO who plays a role in changing the culture of the organisation.

Creating a positive environment

People are at the heart of organisational performance. Creating a positive corporate culture, environment and workplace that enables everyone to excel makes sound business sense and will engender a far greater loyalty and work ethic. Greater diversity and inclusion have been linked to improved financial performance, while more diverse organisations outperform less diverse rivals, with average profitability up 27 per cent and customer satisfaction up 39 per cent.

There is increasing evidence that companies with women on their boards outperform those without by 25 per cent. Companies with one or more women on their board see higher-than-average returns on all key measures, such as 42 per cent greater return on sales, 53 per cent better return on equity and 66 per cent higher return on invested capital.

Those with increased racial diversity at board level meanwhile bring in 15 times more sales revenue on average than those with the lowest levels of racial diversity. Board diversity sees returns on equity that are 53 per cent higher, on average, for those in the top quartile against those in the bottom quartile, with profit margins being 14 per cent higher in those companies that are the most diverse. Companies in the top quartile for racial and ethnic diversity are also 35 per cent more likely to have financial returns above their respective national industry medians. The Chartered Management Institute in London has estimated that by 2025, improving diversity and inclusion could add as much as $12tr annually to the global economy.

Worth considering in all of this is that the percentage of the more than 134,000 RICS members worldwide who are female is only 15 per cent, and the proportion drops to around one per cent for professionals who are LGBTQ, BAME or people with disabilities. Organisations are missing out on talent, and this talent is in demand. Diversity of thought comes with a diversity of people.

RICS has therefore developed four guiding principles for organisational leaders based on its Inclusive Employer Quality Mark. They are:

leadership: demonstrable commitment at the highest level to increasing the diversity of the workforce
recruitment: engaging and attracting new people to the professions from under-represented groups, and employing best practice recruitment methods
culture: creating an inclusive culture where all staff engage with developing, implementing, monitoring and assessing diversity and inclusion
development: policies for training and promotion that offer equal access to career progression for all members of the workforce.

The need to attract, develop and retain talent is essential for business survival. Nowhere is this more acute than in the built environment sector, where organisations have been slow to react and move with the working demographic.

Culture, traditions and history can determine how flexible the profession is in remoulding long-established practices in different geographies governed by local laws and religions, although the increasing number of diversity and inclusion networks and initiatives in Europe, Asia and the USA shows that the shift is already happening.

A holistic approach to business culture

Our book, Managing Diversity and Inclusion in Real Estate, takes an holistic approach to the challenge of implementing diversity and inclusion in global business cultures. Legislation such as the General Data Protection Regulation, organisational size, education, language and geographies all influence the maturity and pace of a diverse and inclusive culture. As authors and advocates, we personally call on all CEOs and leaders in the boardroom – and by inference everyone in the organisation and beyond – to own the agenda. Now is the time for us to shape the future of our sector.

The reception of the book has been wonderful. It is now a core text for the CBRE leadership team in Europe, the Middle East and Africa, and its senior leadership programme for future leaders across the business, while executive directors in the UK and Ireland business have each received a copy. We hope it helps to foster an environment that will encourage others to enjoy fulfilled careers that enable them to be themselves and fulfil their potential.

Amanda Clack is executive director at CBRE and head of strategic advisory, and a former RICS president

amanda.clack@cbre.com

Judith Gabler is RICS director of operations – Europe

jgabler@rics.org

Further information: All author royalties from the sale of Managing Diversity and Inclusion in Real Estate are being donated to LandAid, the property charity that seeks to improve the lives of those affected by youth homelessness; we hope by doing so to make a positive difference to this worthy cause and the world around us.

Related competencies include: Diversity, inclusion and teamworking, Inclusive environments