Gender Pay Equity Analysis Is Here to Stay. Is Your Company Doing It Right?

Equal pay for equal work by people of different genders is top of mind for most companies in 2019, with a December World Economic Forum report noting the gender pay gap is on track to persist for the next twenty decades.

There is absolutely no
reason for the pay gap to persist, and some actors have begun taking steps on
what they have realized is a solvable problem. For example, many states are
enacting laws that require organizations of all sizes to close the gender pay
gap. Shareholder activists, third-party organizations, and activist fund
managers are pressing companies for transparency on their pay equity to avoid
facing a shareholder proposal. Within companies, employee networks are more
frequently sharing their own pay information when pressing their employers on
pay equity.

But more than the legal
requirements or external and internal pressure, gender-based pay equity is the
right thing to do. When employees know a company takes pay practices seriously,
they are more engaged, happier, more productive, and less likely to leave. Employers
that are transparent about their commitment to pay equity earn trust, and a
reputation for pay equity is also the number-one way to attract top talent.

The current solutions
for addressing pay disparities between men and women may actually be
perpetuating the problem. Employers wisely choosing to address pay equity are
often left thinking that fixing the problems is an expensive, complex, and time-consuming
task that may not be worth the investment because—year after year—they must
hire legions of lawyers, experts, or consultants with advanced degrees to
find pay gaps. The industry has conditioned employers to believe the process is
fraught with peril.

Because these costs appear
to be so prohibitive, the industry recommends a “one-and-done” model in which companies
pay for this massive undertaking once a year. The truth is the “one-and-done”
model exists because few companies can afford to do it more than once a year,
or want to endure the process more than once.

What’s worse, one-and-done
reviews don’t sufficiently address the root causes of disparities in pay
between genders. They are forever behind—rather than ahead of—risk. The old
model looks backward, helping companies explain and maintain differences to
assure leaders that while differences exist, they are explainable and won’t
lead to lawsuits. Remedial action, or “catch-up” payments made to underpaid
women annually, is tantamount to fixing symptoms each year but never addressing
the underlying problems.

If
“one and done” actually worked, by definition, we would be “done.” And yet the
gap persists.

So, how do you know
whether your company is engaged in meaningful pay analyses and committed to
eradicating pay disparities between workers of different genders? We’ve
compiled several questions to ask, which will enable you and your board
colleagues to understand more deeply whether your company has seriously and
genuinely addressed pay equity.

Seven Qestions Every Board
Member Concerned About Pay Equity Sholud Ask:

  1. Did the company conduct a pay equity analysis this year? If not, is that because pay fairness is not a priority? Is it not prioritized due to fear of finding a problem, or some other reason? Is that reason acceptable?
  2. What were the results, and can you show me those results in a clear and dynamic dashboard?
  3. How long did the process take, and at what cost?
  4. Are the results presented in a way that is usable for you to take action?
  5. If compensation changes were made as a result, what did you learn about the underlying problems that led to the disparities? What policy or behavioral changes will be made?
  6. Are all compensation events analyzed? This includes base pay, new hire starting pay, stock grants, mid-year changes, bonuses, reorgs, or re-leveling exercises and the like.
  7. Does the company analyze pay during the pay-setting cycle so that changes can be made before pay is finalized? And does the company monitor pay equity throughout the year?

Once you have the
answers to these questions, you will be able to assess risk and evaluate the
company’s commitment to pay equity. Most companies engage in ongoing changes in
the employee lifecycle, including hiring, setting pay, promotions, terminations
and turnover, and reorganizations. Companies not analyzing pay equity, or doing
it just once per year, are incurring unnecessary risk—and doing so at a time
when third parties are becoming dramatically more sophisticated in pressing
companies to demonstrate gender pay equity results.

One of the most
important elements of employee satisfaction and engagement is fair pay. A
company genuinely committed to pay equity is not only doing the right thing. It
also has an incredible opportunity for brand marketing and public relations, as
well as a differentiator for recruiting top talent.

If you’d like to talk more about an ongoing or new pay equity initiative at your organization, get started in the comment section below.

Zev Eigen is the founder and chief data scientist at Syndio. Eigen speaks on the topic of pay equity at regional NACD events, most recently at the Colorado Chapter meeting in December 2018.

Why Executives Need Career Transition Support, Even in a Hot Job Market

In a hot job market, certain business leaders question whether they should continue to provide career transition support for executives.  Unemployment is down.  Companies are clamoring for good talent.  “Surely, they will find something quickly.”

But is this really the case?  According to the December 2018 report from the U.S. Bureau of Labor Statistics, the average unemployment duration was over 21 weeks.  As employees climb the ladder it takes longer and longer to find a position on par with their talents.  For executives, it is not unusual for the hunt to take over a year, placing considerable strain on the job seeker.

While your displaced former executive is hunting for a job how are they filling their time?  Are they sharing their discontent with former colleagues at the organization?  Have they visited Glass Door and left a scathing review for the world to see?  Or have they been given the support needed to move on in their career with a future focus, reflecting on their time with your company as a period that was enriching for their career?  Regardless of job market conditions, the challenges of a career transition still exist. Your executives are unlikely to be prepared for the emotional challenges of dealing with a job loss, the technical difficulty of conducting a modern job search at the executive level, and the motivational struggle of sustaining a typical, extended search.  Without support, this could prove detrimental to your employer brand.

Career Partners International (CPI) has over thirty years of experience getting executives back to work quickly.  Our combination of expert level coaching facilitated through world-class technology helps executives convey their value to the market and land new opportunities suited to their talent.  CPI coaches guide job seekers through this complex market, while our technology ensures that executives perfect every detail of their job search documents and interview interactions.  Over the course of 2018, this system has helped the average CPI Executive candidate land in under 20 weeks, a significant decrease in search time compared to executives without a career transition plan and support.

If you’re charged with deciding whether to provide executive outplacement services, don’t think for a minute that it is any less stressful or any easier to find a new role in a “hot market.”  Sure, there may be more opportunities in an expanding economy, but the competition is tough and the process of finding the right opportunity can be extremely difficult, especially for executives who haven’t been out in the market or haven’t been hands-on in a search for a while.

Having a professional on your side with experience in career transitions and industry-leading technological support is the exact backing your executives need. Your executives are accomplished in many things but bootstrapping their own career transition is not one of them.  An executive career coach who is trained to help executives identify their goals, polish their messaging and networking skills, facilitate important introductions, negotiate their next package, and generally put their best foot forward can help them navigate this unfamiliar territory and come out the other side for the better. Not to mention, executive career coaches can also help ensure that your company brand is protected and positively represented by your most visible employees – a worthwhile investment indeed.

 

Written by John Myers, Managing Partner at Kensington International, a Career Partners International Firm

The post Why Executives Need Career Transition Support, Even in a Hot Job Market appeared first on CPIWorld.

Why is Your Virtual Dream Team Not Living Up to Expectations?

Harness the Potential of Virtual Teams – March 12th and 14th – 1 SHRM PDC

With over thirty years of experience in talent development and career transition services, Career Partners International (CPI) has provided clients with the tools to navigate through decades of change in the workplace. Despite the best preparations, new challenges continually emerge for HR and Management teams.

Join us for Harnessing the Potential of Virtual Teams, a CPI Webinar Series program, on March 12th and 14th, 2019 as we discuss how to bring out the best in your remote workforce.  Many organizations already have or are beginning to introduce remote workers to their team.  The benefits of this arrangement are numerous.  Leaders can source scare talent from all over the world, not limited to a commutable range.  With constant improvements in technology, connectivity becomes easier despite physical separation.  Engagement and retention are improved.  Employers are even keeping cost down by reducing worksite overhead.

Whether they have given their teams an added perk of remote work flexibility or have just assembled a completely virtual “dream team” many employers are still struggling to see the promised returns of a digital team.  Why are these teams not delivering at the level of their onsite counterparts despite being, on paper, a superior group of employees?  Bill Florin of Learning Dynamics, a CPI Partner Firm, joins us to discuss some of the more treacherous obstacles to realizing the potential of a virtual team.

With over three decades of experience in evolving workplace best practices, the team from Learning Dynamics will be illuminating the most frequent disruptors to team productivity and proposing practical resolutions.  We will explore ways to increase engagement, develop relationships, and bridge cultural differences.  Ultimately, the goal of the program is to identify ways to get things done.  With the proper guidance your teams can deliver on those promises of effectiveness and efficiency, achieving well beyond your current results and expectations.

 

This program is valid for 1 PDC toward SHRM-CP and SHRM-SCP recertification.

 

Register today for free at CPIworld.com.

The post Why is Your Virtual Dream Team Not Living Up to Expectations? appeared first on CPIWorld.

Re-Tooling Your SOX Hotline to Combat Sexual Harassment

Companies can no longer view
sexual harassment flippantly—as just another human resources headache. Mishandling
of sexual harassment complaints goes to the heart of the public’s perception of
the company, directly impacting the bottom line. For instance, the Alphabet board
of directors was sued last month for their handling of sexual harassment
complaints at Google. State and federal legislators have since introduced
voluminous legislation targeting sexual harassment. This is a real enterprise
risk that requires board oversight.

As the #MeToo movement continues,
boards should exercise their oversight authority to assure an unequivocal
response to sexual harassment matters by leveraging the powerful tools
developed during the post-Enron era.

Boards should address this
critical risk area urgently, by reviewing existing corporate controls to ensure
that systems in place effectively detect, investigate, and remedy sexual
harassment complaints. As a first step, boards should consider whether their
whistleblower hotlines—already required for accounting matters under the
Sarbanes-Oxley Act (SOX)—are equally as effectively deployed to identify sexual
harassment. Underutilized hotlines and mismanaged complaints have been identified
as critical failures in some of the most prominent and public sexual harassment
scandals. Through basic enhancements to the existing compliance infrastructure,
boards can efficiently and proactively address this critical oversight gap and
create a culture that does not tolerate sexual harassment.    

Using the Tools in Your Arsenal

In the 17 years since SOX was
enacted, a robust compliance framework has developed to address matters raising
serious litigation and public relations risks such as accounting fraud and
corruption. Whistleblower hotlines are a critical control within that framework.
A well-implemented hotline ensures that misconduct is addressed early,
minimizing the harm that can be done by a bad actor and the fallout for the
company more broadly. Mature reporting programs include:

  1. a
    well-publicized hotline;
  2. a
    “tone from the top” that communicates real commitment to addressing
    allegations;
  3. a
    robust investigation protocol; and
  4. engaged
    board oversight. 

Nearly two decades of experience
with SOX-mandated hotlines should put companies in a good position.   However, in the context of sexual harassment,
hotlines are often underutilized or deluged with complaints that are not
addressed thoughtfully. Companies should take a fresh look at their
hotlines, considering the following issues to ensure that the company’s hotline
is set up to detect, assess, and remediate sexual harassment complaints.

Make sure that all employees know about the hotline. A hotline that
is not well publicized is not protecting anyone. In the wake of a scandal, it
is unfortunately all too common for a company to review its hotline files for
related allegations, only to find that personnel were not even aware that a
hotline existed. When Fox Newsfaced
allegations that it failed to address sexual harassment by one of its star
personalities, Fox was quick to point out that it had not received a single
complaint on its hotline.  Employees
swiftly rebuffed this claim, reporting that they had not been made aware of the
hotline, even in sexual harassment training. 

At a minimum, boards should press
their management team to confirm that their hotline is included in any
trainings and materials relating to sexual harassment. Companies should think
critically about the best ways to publicize their hotlines in the context of
their operations, industry, and geographic profile. Boards then should
routinely review hotline statistics and take steps to probe whether the hotline
should be better publicized or re-publicized and whether there are other
impediments that may impact reporting—and, therefore, their oversight of this
matter. 

Encourage Reporting. In the context of headline grabbing
allegations, companies should re-double their efforts to ensure that reporting
internally is an attractive first step when they have a complaint. Employees
often turn to external reporting when they fear their anonymity will not be
protected through internal reporting mechanisms and harbor concerns about
retaliation. Tone from the top is critical in this respect.  It is also important to ensure that reliable
anonymous reporting is made readily accessible and that the company’s
anti-retaliation policy is emphasized at every opportunity. Particularly in the
context of sexual harassment, fear of retaliation appears to be one of the
major concerns driving whistleblowers to report externally or not at all.

Adopt Effective Escalation Procedures. Hotline procedures typically
break allegations into categories such as “Workplace” and “Business Integrity,”
for instance. Allegations falling into Integrity-related categories are subject
to robust investigation protocols and credible reports are often subject to
mandatory board reporting.  “Workplace”
complaints, which may include sexual harassment, may be subject to less
rigorous procedures with no clear requirement as to when the board is made
aware of allegations. Boards should ensure that the procedures implicated by
sexual harassment allegations are commensurate to the significant risks posed
for the company. Boards should also consider mandatory reporting procedures and
ensure that the board has real oversight over the company’s handling of sexual
harassment matters.

The #MeToo movement has shone a
light onto corporate scandals involving sexual harassment, and the related
litigation and legislation is just picking up steam. Boards would be well
served to take steps now to ensure that their companies and employees are
protected. Enhancing whistleblower hotlines already required by SOX would be a
practical and powerful first step in that direction.

Audrey Ingram is a partner and Michael Mann is a partner and founder of the Washington, D.C. office of Richards Kibbe & Orbe. Jamie Schafer is an associate in Richards Kibbe & Orbe’s Washington, D.C. office.

Is Your Board Prepared to Weather an Economic Downturn (or Recession)?

While we’re in the midst of the
second longest economic recovery in history, many economists and business
leaders are questioning whether we’re nearing the end of the bull run. With slower
global gross domestic product growth forecast for 2019 and 2020—particularly in
the EU, the U.S., and emerging economies—and some seeing at least a modest risk
of a U.S. recession in 2019 and a growing risk in 2020, there’s clearly a
growing sense of caution. Financial conditions are tightening in advanced
economies, and a number of Fortune 500 companies have announced first-quarter
earnings forecasts that have fallen short of analysts’ forecasts.

We hear varying levels of concern from
directors about a potential economic downturn and possible recession—concerns
that are compounded by mounting geopolitical uncertainty and risks posed by Brexit,
China’s economic challenges, trade tensions, emerging market debt, and more. While
directors appear to be cautiously optimistic, as one director said, “In this
environment, it’s good to be paranoid.”

Given the uncertainty that
companies are facing today, it is important that board leaders frame their
agendas to help ensure that the company is prepared for a potential economic
downturn—possibly a severe one. While watching for signs of systemic economic
weakness, board leaders should also be mindful of lessons learned from the last
recession. Among the key areas for board focus today and in the months to come:

Scenario planning.
What scenario planning is the company doing around a hard Brexit, tariffs, a
trade war with China, rising inflation, and rising interest rates? Are there
second-order effects that will impact the company’s industry, supply chain, and/or
value chain? Does management prepare a set of probability scenarios for how the
future might unfold and consider the threats and opportunities that those
scenarios present? Do the strategic options balance a commitment to a course of
action with the flexibility to adjust amid different future scenarios?

Growth, capital allocation, and cost cutting. How is the company balancing cost reduction and growth
initiatives? How is it determining whether to invest in capital projects versus
buybacks or dividends? How does the company balance taking advantage of growth
opportunities with belt tightening in anticipation of an economic slowdown? The
world is moving forward regardless of the capital cycles, and companies that
are being disrupted need to make technology investments. At the same time, can
the company head into a downturn with a slightly fatter balance sheet?

Liquidity,
access to capital, and cash flow
.What
are the company’s plans to raise debt/equity in the short and medium term? How
dependent is the company on short-term financing? Are credit lines secure? Is the
company at risk of default on debt covenants?

Hedging
against commodity, currency, and interest rate fluctuations
.What
will be the impact of tariffs, inflation, and recession on commodity costs and
procurement strategies? How will changes impact the ability to obtain economic
hedges against commodity, currency, and interest rate fluctuations?

Exposure
to third parties
.Does the
company understand its exposure to third parties who may experience financial
difficulty (customers, suppliers, lenders, and others)?

Fair value and asset impairments of businesses. Does management understand how vulnerable the company’s portfolio is to changes in value in
this environment? Has management identified triggering events that may warrant
impairment assessments of goodwill
and other intangible assets? How will changes in financial markets impact the
valuation of pension plan assets and planned or mandatory funding levels? 

While we remain cautiously
optimistic that the economy is on firm footing and that any recession will be
short and shallow, “an ounce of prevention…” as the saying goes.

Dennis T. Whalen is Leader of KPMG’s Board Leadership Center.

Cyber-Risk Considerations During the M&A Process

Data breaches are a
constant in today’s headlines, with this risk front and center for some of the
most significant mergers and acquisitions (M&A) deals in recent years.

For example, Verizon Communications discounted its acquisition price by $350 million in 2017 when Yahoo! Belatedly disclosed that it experienced several massive breaches. In November, Marriott International publicly disclosed that Starwood’s guest reservation database—containing hundreds of millions of personal records—had been compromised since 2014, prior to the Marriott acquisition.

These and countless
other incidents raise critical questions: How should boards be thinking about
cyber risk in the acquisition process?

First, boards must
understand that cyber risk can have a significant impact not only on the
valuation of a deal but also on future legal liability associated with the
transaction. From a board’s perspective, the fallout from the Yahoo breach is
significant—multiple securities class action lawsuits, directors and officers
liability insurance (D&O) suits, and recommendations for  removal of directors from the board. The
board’s responsibility in overseeing cyber risk management has never been more
crucial.

What steps should Boards take to address
this risk prior to the acquisition? Organizations
need to conduct due diligence for a potential acquisition target. In some circumstances, there may be a public record of an
organization’s cybersecurity posture. Organizations may have disclosed security
incidents or issues due to an obligation to state or federal regulators, and
these disclosures may provide insight for an acquiring organization.

But public disclosure is unreliable. Organizations are disincentivized to disclose because it may negatively impact market value, and acquisition targets know that security issues can negatively impact their valuation. In fact, a 2016 survey by Brunswick found that half of all respondents said they would “trim their valuation in situations where the target company had been breached – whether the breach was discovered before, during or after the merger.”

Acquirers will often
try to send their cybersecurity and other information security teams onsite to
gain a deeper perspective on the risks and issues that may arise
post-acquisition. This is important to properly account for any security
“fixes” your organization will have to implement to bring the target up to your
standards. But this, too, comes with challenges. The tools available to an acquirer’s
cybersecurity team include questionnaires and penetration tests, but even if
the target agrees, these methods are both time-consuming and reflect only a
“snapshot in time” view—not necessarily historical performance.

So, how can your organization address these challenges around market transparency? Investors are finding that security ratings can offer significant insight into a target’s cybersecurity posture and address the information asymmetry challenge. Similar to how a credit rating provides unique insight into the transactional history of a consumer, security ratings providers continuously collect data in an automated, non-intrusive fashion to generate a data-driven, objective rating of security performance. Broad and deep data sets are available that highlight security performance and best practices, giving unique insight into what has—or has not—been managed efficiently over time. Armed with this data, information security teams can drill deeper into the security details of an acquisition; valuation teams can consider more deeply some of the risks that were opaque.

It’s never been more
important to consider cyber risk in your investments. The cyber risk that a
given company presents has been an often-overlooked element during the M&A
process, but it doesn’t need to be that way. Asking the right questions—and acquiring
the right data—can go a long way toward reducing financial risk in a
transaction. Board members should not hesitate to raise this issue with
management during the next acquisition meeting.

Learn more about using security ratings for M&A at BitSight for M&A.

Workforce Data Insights: Goldmine Or Landmine?

In my work with the C-suites of leading
global companies, we are shaping an exciting workforce-related transformation
that can significantly impact the bottom line. A wealth of companies are
sitting upon information and insights that—if unlocked—can lead to immense
value, sizably impacting future revenue growth. 

It’s what I call “decoding your organizational DNA.” Accenture’s new research on the topic —presented at the 2019 World Economic Forum—shows that organizational DNA impacts the C-suite and board.

Workforce data itself does not move the needle. Rather, it’s
the insights companies can glean from the data, using artificial intelligence
(AI) and advanced analytics, that are pure gold. The difference between using
workforce data responsibly and failing to do so impacts revenue growth by as
much as 12 percent, which makes it a sizeable balance-sheet factor. Collecting
and using workforce data can be a goldmine or a minefield, depending on how
it’s handled.

It’s a business performance issue

In NACD’s 2019 projections on emerging board matters, 70 percent of directors reported their boards need to strengthen their understanding of risks and opportunities affecting company performance. Workforce data is just such a risk and an opportunity, rolled into one. Chief human resources officers should lead on this issue, but they need to actively partner with their C-suite peers and seek the wisdom of their board to navigate these uncharted waters.

Companies mine consumer data to provide better, more
personalized value to their customers. Some of those same companies are just beginning
to do the same with data on their workforce. From using wearable technology to gauge
an employee’s workday stress levels, to determining the informal worker networks
that produce breakthrough innovation, workforce data shows great potential for improving
business performance. But only if it’s mined correctly and responsibly for
truly useful insights.

Measures of responsibility

At Accenture, we call identifying and analyzing this data “decoding
your organizational DNA.” This decoding brims with positive possibilities, but also
comes with great responsibility to employees’ privacy and security.

Accenture’s research shows that while 62 percent of
businesses are now using workplace data to a large or significant extent, only 30 percent of C-suite leaders feel very
confident they are using it responsibly. In fact, roughly half of C-suite
executives (49%) say
that, in the absence of sufficient legislation, they would continue using workforce
data without additional measures of responsibility.

Given the regulatory activity in the
consumer data area (the Global Data Protection Regulation being the most
prevalent), we can expect to see similar policies stated in the employee area. Company
leaders must act now to identify and mitigate privacy and regulatory risks for
employees’ data just as they do in the consumer data sector of their business.

As
the World Bank’s Tina George, co-lead on delivery systems for the Social
Protection and Jobs practice globally, put it in the Accenture report: “Technology and trust are not
sufficient to protect people and their data. We need to develop systems and
guarantees allowing people to make reasoned, consensual choices about how their
personal data is used, while also ensuring that advantage is not taken of the
digital footprints they leave behind inside or outside of work.”

Putting employees first: A matter of trust

The responsible use of workforce data can engender employee
trust. Beyond that, it contributes to more innovative, productive, and
satisfying workplaces, creating workforces that are more agile and resilient even
in uncertain, volatile times. Nearly
60 percent of employees Accenture surveyed think workplace data will improve
their lives and performance. Although a similar proportion have concerns that
their data could be misused, nine out
of 10 are open to the collection
of data on them and their work—if it improves their performance or well-being,
or provides other personal benefits.

Benefits already playing out for
leaders

Companies
that are able to get the trusted collection and use of employee data right
stand to gain significantly. Their employees benefit also, not just from the
shared effects of growth but from an individual perspective. Hitachi is a great
example of this win/win. Its manufacturing
employees wear special glasses and armbands to track their eye and hand movements.
AI uses this data to improve operations—making employees safer and more efficient
while also improving quality. Many Hitachi employees also now wear smart badges
loaded with sensors that collect behavioral data on them 50
times a second. AI then uses this data to suggest ways to improve their
happiness (e.g. how to best structure their day). In one test, sales divisions
that strongly adopted the technology not only showed improved levels of
happiness, but generated 27 percent more order volume than those divisions that
used the technology far less.

The Accenture Decoding Organizational DNA report put it well: “On one hand, value as far as the eye can see: employees who are more motivated, engaged, and highly productive. On the other, the potential for misuse of data: individual rights ignored . . . and employees’ skills underutilized.” A board that proactively navigates this issue with its C-suite is far more likely to tip the scales toward the goldmine of improved revenue, rather than toward a minefield of unmitigated risks.

Workforce data insights: Goldmine or landmine?

In my work with the C-suites of leading
global companies, we are shaping an exciting workforce-related transformation
that can significantly impact the bottom line. A wealth of companies are
sitting upon information and insights that—if unlocked—can lead to immense
value, sizably impacting future revenue growth. 

It’s what I call “decoding your organizational DNA.” Accenture’s new research on the topic —presented at the 2019 World Economic Forum—shows that organizational DNA impacts the C-suite and board.

Workforce data itself does not move the needle. Rather, it’s
the insights companies can glean from the data, using artificial intelligence
(AI) and advanced analytics, that are pure gold. The difference between using
workforce data responsibly and failing to do so impacts revenue growth by as
much as 12 percent, which makes it a sizeable balance-sheet factor. Collecting
and using workforce data can be a goldmine or a minefield, depending on how
it’s handled.

It’s a business performance issue

In NACD’s 2019 projections on emerging board matters, 70 percent of directors reported their boards need to strengthen their understanding of risks and opportunities affecting company performance. Workforce data is just such a risk and an opportunity, rolled into one. Chief human resources officers should lead on this issue, but they need to actively partner with their C-suite peers and seek the wisdom of their board to navigate these uncharted waters.

Companies mine consumer data to provide better, more
personalized value to their customers. Some of those same companies are just beginning
to do the same with data on their workforce. From using wearable technology to gauge
an employee’s workday stress levels, to determining the informal worker networks
that produce breakthrough innovation, workforce data shows great potential for improving
business performance. But only if it’s mined correctly and responsibly for
truly useful insights.

Measures of responsibility

At Accenture, we call identifying and analyzing this data “decoding
your organizational DNA.” This decoding brims with positive possibilities, but also
comes with great responsibility to employees’ privacy and security.

Accenture’s research shows that while 62 percent of
businesses are now using workplace data to a large or significant extent, only 30 percent of C-suite leaders feel very
confident they are using it responsibly. In fact, roughly half of C-suite
executives (49%) say
that, in the absence of sufficient legislation, they would continue using workforce
data without additional measures of responsibility.

Given the regulatory activity in the
consumer data area (the Global Data Protection Regulation being the most
prevalent), we can expect to see similar policies stated in the employee area. Company
leaders must act now to identify and mitigate privacy and regulatory risks for
employees’ data just as they do in the consumer data sector of their business.

As
the World Bank’s Tina George, co-lead on delivery systems for the Social
Protection and Jobs practice globally, put it in the Accenture report: “Technology and trust are not
sufficient to protect people and their data. We need to develop systems and
guarantees allowing people to make reasoned, consensual choices about how their
personal data is used, while also ensuring that advantage is not taken of the
digital footprints they leave behind inside or outside of work.”

Putting employees first: A matter of trust

The responsible use of workforce data can engender employee
trust. Beyond that, it contributes to more innovative, productive, and
satisfying workplaces, creating workforces that are more agile and resilient even
in uncertain, volatile times. Nearly
60 percent of employees Accenture surveyed think workplace data will improve
their lives and performance. Although a similar proportion have concerns that
their data could be misused, nine out
of 10 are open to the collection
of data on them and their work—if it improves their performance or well-being,
or provides other personal benefits.

Benefits already playing out for
leaders

Companies
that are able to get the trusted collection and use of employee data right
stand to gain significantly. Their employees benefit also, not just from the
shared effects of growth but from an individual perspective. Hitachi is a great
example of this win/win. Its manufacturing
employees wear special glasses and armbands to track their eye and hand movements.
AI uses this data to improve operations—making employees safer and more efficient
while also improving quality. Many Hitachi employees also now wear smart badges
loaded with sensors that collect behavioral data on them 50
times a second. AI then uses this data to suggest ways to improve their
happiness (e.g. how to best structure their day). In one test, sales divisions
that strongly adopted the technology not only showed improved levels of
happiness, but generated 27 percent more order volume than those divisions that
used the technology far less.

The Accenture Decoding Organizational DNA report put it well: “On one hand, value as far as the eye can see: employees who are more motivated, engaged, and highly productive. On the other, the potential for misuse of data: individual rights ignored . . . and employees’ skills underutilized.” A board that proactively navigates this issue with its C-suite is far more likely to tip the scales toward the goldmine of improved revenue, rather than toward a minefield of unmitigated risks.

Disability Inclusion: Is Your Board on Board?

The Israeli Defense Force (IDF) Special intelligence Unit
9900 is dedicated to everything related to geography, including mapping,
interpretation of aerial and satellite photographs, and space research. Within
this unit there is another, smaller unit of highly qualified soldiers who can
detect even the smallest details—the ones usually undetectable to most people.

These soldiers all have one thing in common; they are on the
autism spectrum. Their job is to take visual materials from satellite images
and sensors in the air. With the help of officers and decoding tools, they
analyze the images and find specific objects within the images that are
necessary to provide the best data to those planning missions. The IDF has also
found that soldiers with autism can focus for longer periods of time than their
neurotypical counterparts.

This story speaks to me personally. My son Trevor was diagnosed with autism at age five. The only thing I knew about autism at the time was Dustin Hoffman’s Rainman character. Raising a son on the spectrum drastically changed my point of view on disability inclusion, seeing strengths through the challenges, and cultivating those strengths while accommodating the challenges. He’s a grown man today, living on his own, working, paying his bills, saving money, and building relationships. His strengths outweigh his challenges.

The same reckoning with his strengths and challenges can
lead to success with overseeing how an organization thrives, but how do you begin
to ensure inclusion of disabled people’s strength in the workplace at scale
with at an organization level? It has to start at the board and C-suite
level. 

The Center for Disease Control and Prevention defines a disability as “any condition of the body or mind (impairment) that makes it more difficult for the person with the condition to do certain activities (activity limitation) and interact with the world around them (participation restrictions).” A disability can:

  • Be present at birth (i.e. down syndrome)
  • Become apparent during childhood (i.e. autism)
  • Be related to an injury (i.e. spinal cord
    injury)
  • Be associated with a longstanding condition (i.e.
    diabetes), which can cause a disability (i.e. vision loss).

In 2018 Accenture published an outstanding research report entitled Getting to Equal: The Disability Inclusion Advantage. Some of the statistics in the report are eye-opening:

  • 29 percent of working-age Americans with
    disabilities participate in the workforce compared with 75 percent of Americans
    without a disability
  • There are 15.1 million Americans of working age
    living with a disability
  • If companies embraced disability inclusion, they
    would gain access to a new talent pool of 10.7 million people.

The Disability Equality Index (DEI) is a joint project
between the American Association of People with Disabilities and Disability:IN
(formerly known as the US Business Leadership Network). DEI’s primary goal is
to provide a benchmarking tool to help companies assess disability inclusion
policies and practices in six key areas:

  1. Culture and Leadership
  2. Enterprise-Wide Access
  3. Employment Practices
  4. Community Engagement
  5. Supplier Diversity
  6. Non-US Operations

Organizations complete a survey (DEI estimates between 30-40
hours to complete), send it into DEI, and receive an objective score on their
disability inclusion practices and opportunities for improvement. DEI puts
respondents achieving 80 percent or better on their website, with companies
like Accenture, Microsoft Corp., AT&T, The Walt Disney Co., Capital One
Financial Corp., and Boeing Co. achieving a score of 100 percent. DEI has an
advisory committee comprised of corporate and nonprofit executives and
advocates who advise on benchmarking topics and questions.

While it’s a commitment to complete the survey, it gives an
organization an honest and introspective lens into their culture, policies, and
practices on disability inclusion and is valuable to help identify areas where
an organization needs to improve.

This isn’t fluff stuff. The Accenture report notes several
tangible results of those organizations that embraced a disability inclusion
culture.

  • Companies that were DEI disability champions
    (score of 80% or better) were twice as likely to have higher total shareholder
    returns than peer companies.
  • Companies that weren’t disability champions but
    had improved their DEI scores over time were four times more likely to have
    higher total shareholder returns than peer companies.
  • Staff turnover is up to 30 percent lower when a
    well-run disability community outreach program is in place.

As a board, make it a priority to work with the senior
leadership team to understand your company’s disability inclusion position and
ensure disability inclusion is baked into the culture, not just an add-on
project. Here are three things you can do to get started:

  • Use the DEI Benchmark Survey to assess your culture as-is. Whether or not you submit your responses to DEI for scoring, at a minimum, download and complete the survey to understand your company’s strengths and weaknesses on disability inclusion. You’ll at least get an understanding of where your company need to focus on the disability inclusion journey.
  • Name a senior leadership disability inclusion champion. Identify and empower a member of your senior leadership team to be an internal and external-facing voice on disability inclusion for your organization. The executive should be known as a person with a disability or be a passionate supporter of people with disabilities. As with any other inclusion leader, passion is key. Don’t just give an exec the champion title if they’re not passionate about it.
  • Put a disability inclusion advocate on your board. Whether a person with a disability or a passionate supporter, ensure your board has someone who brings both needed subject matter expertise coupled with a willingness to be a courageous disability inclusion advocate in the boardroom.

Disability inclusion is not just a social responsibility
buzzword meant to enhance reputation. There’s tangible business value to be
had. As a board, your accountability is to ensure your organization is
promoting a culture where the business benefits can be realized.

NACD member Lonnie Pacelli is an author of books on leadership development, project management, and autism awareness. See more at www.lonniepacelli.com. All thoughts expressed here are his own.