Why Excluding DEI in Recruitment Could Be Costing Your Manufacturing Business

Does your workplace support DEI (Diversity, Equity and Inclusion)  in recruitment?

In the Australian manufacturing and supply chain industries, women often make up as little as a third of the workforce. Meanwhile, it has been reported that only a quarter of employees are linguistically diverse.

Manufacturing and supply chain companies play a critical role in Australia’s economy and future. However, neglecting to build foundations that support diversity, equality and inclusion can significantly impact retention and diminish the talent pool.  The result of this is a drop in productivity, money lost to the hiring process and missed opportunities for new partnerships and market segments. All these combine to impact long-term results.

Building a leading manufacturing or supply chain business that is inclusive and diverse starts with equity and inclusion in recruitment. This article explores the direct and hidden costs of excluding a DEI strategy from your hiring efforts and outlines the steps to make diversity, equality and inclusion a priority.

The Importance of DEI in Recruitment

Effective DEI policies ensure diversity across the workplace. They give employees access to equal opportunities and help them feel included at work. This leads to a more inclusive culture, which is reported to make teams almost 30% more likely to create superior value.

Diversity, Equity, and Inclusion all play critical roles in manufacturing and supply chain companies:

• Diversity brings different perspectives and skill sets to the team.
• Equity ensures fair treatment of every individual and has been found to reduce the risk of discrimination claims.
• Inclusion fosters a culture where everyone feels valued and motivated to contribute

The benefit of incorporating DEI into the recruitment process has been studied and measured by a number of organisations:

• One example found diverse teams are 87% better at decision-making compared to non-diverse teams.
• A study that surveyed 1700 manufacturing companies found that those with low diversity scores pulled in 26% of their revenue from innovation, while those with above-average scores got 45% of their revenue from innovation.
• Accenture found companies that lead in disability inclusion drive more revenue, net income and profit. Specifically, organisations that lead on key disability inclusion criteria saw 1.6 times more revenue, 2.6 times more net income and twice as much economic profit than other companies.

These examples make it easy to see the benefits of equality, inclusion and diversity in manufacturing and supply chain companies.

The Direct Costs of Excluding DEI

The costs of avoiding this key area of your organisation are significant.

Excluding DEI from your recruitment can lead to a disengaged workforce, low productivity and high turnover rates. Employees who don’t feel valued or included are more likely to leave, which increases the costs associated with recruitment and onboarding.

Studies show that the toxic work cultures and a lack of opportunities for promotion, which can arise from a lack of diversity, will prompt people to leave their roles. If your business fails to build an inclusive culture where individuals feel empowered to be themselves, apply for promotions and speak up about their needs, retention will start to drop.

The impact of DEI on employee retention has a flow on effect. Disgruntled employees resign and speak out about their experiences on platforms such as Glass Door, which makes it more difficult to attract top candidates. In a competitive market, prolonged vacancies can significantly impact productivity and output, limiting growth opportunities. The cost of recruiting to fill these gaps then inducting and onboarding new employees compounds the financial burden.

On the flip side, the Diversity Council of Australia’s Inclusion@Work Index 2023 – 2024 shows that workers in inclusive teams are:

• 3 times less likely to leave their organisation
• 5 times more likely to have been given feedback they found useful
• 5 times more likely to have members willing to work harder to help their team succeed

The Hidden Costs of Ignoring DEI

A workforce made up of the same types of people often leads to what’s known as ‘groupthink’, which can stifle creativity and hinder problem-solving and innovation.

Other hidden costs of ignoring DEI include:

• Unconscious biases, which can lead to unintentional discrimination
• A lack of innovation and the potential to miss out on market segments
• Imbalance of skills across the team
• Falling behind competitors in terms of reputation

The final indirect cost of failing to consider DEI during the recruitment process is the potential for legal implications. If a lack of diversity and inclusion means your company begins to develop an unattractive workplace culture, people find it harder to speak up when unfair practices take place. With new laws such as the right to disconnect law and employers potentially being liable if they cannot show that they took all reasonable steps to prevent improper conduct in relation to harassment, it is more important than ever to establish an equal and inclusive culture.

In contrast, diverse and inclusive teams bring fresh perspectives that can drive innovation. A case study from John Deere found that establishing a DEI Council and implementing new strategies benefited the organisation through:

• Enhanced innovation and creativity: An inclusive environment encourages open dialogue and collaboration.
• Improved problem-solving: With diverse teams discussing and addressing challenges, John Deere experienced a broader range of insights and approaches.
• Organisational learning and growth: By encouraging cross-cultural interactions and providing diversity training programs, John Deere fosters an environment of mutual respect, empathy and understanding.

Steps to Implement DEI in Recruitment

A clear, actionable DEI policy is essential for every manufacturing and supply chain business. This policy should align with your company’s values and be communicated across management and hiring teams.

Practical steps to implement DEI as part of your recruitment process include:

• Using inclusive language in job descriptions to attract a broader range of applicants.
• Unconscious bias training for hiring managers and key decision makers
• Tracking DEI metrics and setting measurable goals to create accountability and measure progress
• Being open to flexible work hours or work from home arrangements
• Connecting with internal teams to discuss mentoring opportunities and potential career pathways for incoming team members
• Assigning KPIs in this area so progress can be tracked and measured
• Consulting with a recruitment firm that has an in-depth understanding of and appreciation for this topic

Is Your Manufacturing or Supply-Chain Business Inclusive When Hiring?

Top performing businesses have one thing in common; great culture and high-performing people.

Failing to include DEI in your recruitment strategies can lead to lacklustre problem solving, operational difficulties, missed business opportunities, poor engagement and low retention. With more than three quarters of job seekers (76%) saying a diverse workforce is an important factor when evaluating companies, it can also lead to candidates overlooking your business and applying elsewhere. The result of this is time wasted and money lost.

With the new wave of technology and AI set to transform best-practices in manufacturing and supply, there are many changes on the horizon. Embracing DEI in your hiring is the essential first step to future-proof your organisation and prepare it for the next exciting set of challenges.

Looking to overcome DEI challenges in supply chain or manufacturing? Get in touch with the manufacturing and supply chain recruitment specialists at Adecco.  We work with you to attract the talent you need, train your workforce and build inclusion paths for your organisation.