Career

Diversity & Inclusion Trends: Emerging Innovations to Watch

January 3, 2020
  • Sophia Powe

    Editor-in-Chief of Voice on Growth, International Region at Mercer

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"HR can help companies leverage D&I to reimagine people management and elevate brand-loyalty among employees, customers and investors."

Learn about the latest diversity & inclusion trends emerging in 2020.

Promoting diversity and inclusion (D&I) in the workplace is a critical element of talent management as it cultivates employee engagement and enhances the employee experience. In an inclusive culture, team members feel valued, respected and accepted as individuals—and are therefore encouraged to fully participate and contribute as their authentic, unique selves. A diverse staff provides companies with different perspectives and new skills that infuse company culture with innovation and creativity, which are key to thriving in digital transformation.

Cultural evolution, emerging markets, advancing technology, generational differences, widespread immigration and a widening skills gap are contributing to an increasingly complex corporate environment that challenges old processes and necessitates new ways of building a workforce.

These forces—while presenting challenges for HR leaders in recruiting, developing and retaining top talent—also open doors. Innovation comes from all corners of the globe. Strong D&I improves a company’s performance because it opens new talent pools and expands points of view and experiences. Businesses that do not recruit from diverse talent pools are at risk of missing out on qualified candidates and incurring higher recruitment costs.

Why Diversity & Inclusions Matters
 

D&I progress not only helps organizations fill positions with qualified candidates more efficiently—it also raises the employer brand, which is becoming increasingly important for attracting the right talent. According to research from Glassdoor, 67% of active job seekers said a diverse workforce is important when considering job offers and 57% of employees think their companies should be more diverse.

Having a diverse, multilingual workforce from varying ethnic backgrounds can also be helpful for companies that want to expand or improve operations in new markets locally, regionally, nationally and internationally. As millions of new internet users sign online each year for the first time, companies have an unprecedented opportunity to communicate and captivate new customers and draw in talent. D&I can help accomplish this, as diverse companies are 70% more likely to capture new markets

A large-scale shift toward diversity and inclusion workplace policies can make waves around the world. For example, the World Economic Forum has projected that correcting gender segregation in employment and developing women’s entrepreneurship could increase productivity globally by as much as 16%.

Trending Now: Diversity & Inclusion
 

The compelling business case for D&I means that more companies will adopt stronger policies and become more adept at integrating a myriad of individuals into one cohesive workforce. D&I will therefore become the norm rather than the exception.

Keeping a strong pulse on the D&I trends emerging in the workplace can help a company stay a beat ahead of the competition and prepare for the future of work.

1.  Deploying artificial intelligence (AI) technology to remove unconscious bias.

Unconscious bias has become a hot topic of the D&I conversation in HR, as companies make strides toward becoming more diverse and inclusive. Companies cannot afford to ignore implicit bias for it has serious consequences on the employee experience, whether in hiring/recruitment, employee feedback, performance reviews, or development. The Center for Talent Innovation found that employees at large companies who perceive bias are:

·  Three times as likely to plan to leave their employers within the year.

·  More than twice as likely to have withheld ideas or solutions in the past  six months at work.

·  Five times as likely to speak about their company in a negative manner on social media.

Even if a company commits itself to fully eliminating unconscious bias, it still proves to be difficult because these predispositions operate automatically and act without us even knowing it. All humans, whether we notice it or not, engage in unconscious bias to some degree. It’s often involuntary and rooted in the brain. Furthermore, there are far too many biases to manually remove them from our decision-making processes.

Because unconscious bias is an ingrained human trait, some experts suggest that the best way to overcome it is via non-human solutions—such as artificial intelligence (AI). A notable feature of AI in HR technology is its potential to mitigate the effects unconscious bias companies face in the hiring and development process. With AI, candidates are sourced, screened and filtered through large quantities of data. The programs combine data points and use algorithms to identify who will likely be the best candidate. These data points are looked at objectively, completely removing the biases, assumptions and oversight that humans are naturally hindered by.

AI for human resource systems can be also programmed to automatically ignore a candidate’s demographic information, such as gender, race and age. It can take a step beyond protecting the basic demographic information and disregard other details that may indicate racial or socioeconomic status, such as school names and zip codes.

When it comes to assessment and development, L&D programs can be strengthened with machine learning to identify high-potential employees with the skills and qualifications the company needs. Strikingly, it has been found that the employees ranked highest by the machine learning software aren’t usually those on the promotion track. Instead these high potential employees may exhibit qualities such as introversion that find them being overlooked when undergoing traditional methods of assessment.

2.  Using data to assess D&I climate, identify focus areas & quantify the success of initiatives.

Among the challenges for implementing D&I initiatives are knowing where to begin, how to focus efforts and how to measure success. When seeking a buy-in from leadership for a diversity program, it is important that the HR department sets out a strategy for quantifying its ROI. To satisfy this, many companies are now turning to data-driven ways of assessing the D&I climate, focusing efforts and determining if an initiative was successful.

Before implementing any D&I initiative, the company’s starting condition—its current D&I environment—should be diagnosed. D&I is a vast realm so narrowing down focus areas can help a company in implementing or improving practices. The diagnosis can help identify focus areas and drive diversity initiatives forward in a tailored way that will fill the company’s distinct gaps.

To gather useful D&I data, some companies conduct regular employee engagement surveys, asking questions that focus on company culture and inclusion. From the onset, these surveys, especially when done consistently, can serve as a barometer of the company’s D&I culture since it is based on first-hand feedback directly from employees.

It is also key to evaluate employee data, such as turnover rates, promotion and salary. Some sample metrics that can be used to assess D&I practices include for each employee: the velocity of mobility (which is the length of time it takes to hire, promote and move up within the company), pathways for employees, percentage of diverse employees with mentors, results of mentorship in terms of career progression and employee engagement. This data can help uncover systemic issues like a gender pay gap. Companies can also look across employee reviews online, such as on Glassdoor, or conduct a social media audit to detect if there is any evidence of bias. 

After all key areas for improvement have been identified, there must be organizational consensus on how to measure changes. Some companies rely on retention and attrition rates of different groups as an indicator for success. When implementing D&I training, it is helpful to perform employee surveys both prior and after to gauging the program’s success.

Storing data from evaluations and all D&I initiatives can help measure changes along the way. The end goal of a more inclusive, diverse team is of course central to D&I but there should also be methods of measuring success along the journey. Each company is different and there will never be a one-size-fits-all approach to D&I but consistent data collection can help companies implement, modify and quantify their success.

3.  Increased leadership accountability & support for D&I programs.

Corporate leadership is recognizing that a solid D&I strategy is not merely a “nice-to-have” add-on carried out solely by the HR department but is instead a business imperative in today’s competitive landscape. Among the best practices for D&I implementation are executive buy-in and a strategic emphasis on D&I as a valued competitive advantage. Some companies are taking it a step further and modifying the structure of an organization’s leadership to enrich its approach to D&I.

In a top down approach, some companies are making headway on D&I by creating an executive role in the form of a chief diversity and inclusion officer. The D&I executive can outline goals, establish targets, identify key improvement areas and then lead the organization through the steps of meeting goals. While this person interfaces with all areas of the organization in various capacities, the D&I’s department takes ownership and spearheads D&I initiatives.

An employee-led grassroots approach forms a decentralized company-wide D&I council that draws on feedback directly from employees. While it still requires executive buy-in, the council’s reach is distributed through the entire workforce. The council appoints representatives from various departments or segments of a company and meets regularly to improve the company’s D&I culture as it pertains to recruitment, engagement and development.

Some companies might opt for a hybrid approach to D&I leadership, which would involve appointing a D&I-specific executive and a D&I council. Instead of being solely led by employees, the D&I council is supported by the HR department and guided by representation from both the D&I executive and employees. Initiatives are cooperatively strategized and outlined by the D&I executive, HR and employees. The three groups agree upon how initiatives will be spearheaded and what role each group will play in their execution.

4.  Interview standardization will continue & reduce bias.

Inconsistent recruitment practices will yield inconsistent (or, even worse, illegal) hiring results and may also open floodgates for unconscious bias in hiring processes. For quality and compliance, HR should have policies in place that ensure the hiring process is standardized from the time they list the job all the way through to when the hired employee steps in the door (or signs online if they’re remote) for their first day of work. Establishing and implementing hiring best practices provides a company’s recruiters with control and guidance for hiring. This type of standardization enhances transparency, allows for a fair comparison of candidates and reduces the risk of violating applicable labor laws. It also helps promote a company’s E&D profile.

Striving for behavioral interviewing methods is an ideal strategy because a person’s behavior is an indication of future performance, especially when it comes to soft skills. According to research from LinkedIn, 57% of HR professionals struggle to assess candidates’ soft skills while 80% report that soft skills are increasingly important to company success. This makes sense because soft skills are one area where automation and AI cannot fully compete with humans.

Many companies want the initial introduction with a candidate to be as blind as possible. This might mean starting out with a phone interview, which will eliminate visually-based unconscious bias upfront. Some companies are taking it a step further to accomplish the “blind interview,” using voice modulation apps for technical interviews so the interviewer won’t know the candidate’s gender or be able to pick up on any accent that might distinguish background attributes of the candidate.

Behavioral interviewing seeks to uncover how an individual will react in critical job situations and can potentially provide more insight about a candidate’s qualification for the job than what is written on their resume or what you hear when you ask a candidate about their professional background. These questions could start with, “What would you do in…” or, “Tell me about a time when you…”

Using an example of a customer service representative interview, the interviewer might present prospective candidates with a hypothetical customer situation and have them explain their approach to addressing it.  

Asking the typical behavioral interviewing questions reduces the risk of legal or ethical pitfalls in the interview questions. Formally planning and asking all candidates the same questions saves time and prevents duplicate questions from being asked by multiple interviewers (unless intentionally done, so as to confirm consistency in the candidate’s response). This brings up another key point of having multiple people interview each candidate when possible. Engaging multiple interviewers can help overcome unconscious bias in interviews and offer a wider perspective for determining a candidate’s standing.

However, even behavioral interview questions can be answered untruthfully by candidates. Pre-employment assessments can validate or negate the data derived from an interview. There are many options available to companies for hiring assessment tools that quantify and use objective, impartial data to evaluate candidates. Results from pre-employment assessments can provide an accurate snapshot of a candidate's strengths and weaknesses. The results can even be input to create hiring benchmarks that candidates can be compared to.

5.  Diversity & inclusion will be embraced across products & services for customers.

D&I has gone mainstream. In the age of customer-centricity, there is mounting pressure on companies across industries to launch inclusive products and solutions that meet the needs of all customers. The 2019 World Economic Forum Annual Meeting identified ‘empathy for the end-user’ as a key competitive advantage for succeeding in the digital age. In the age of digital transformation, companies will have to become more accessible to wider customer bases—and invoke messages and values that resonate with audiences across cultural and geographic boundaries. 

According to LinkedIn, nearly half of employers said that they emphasize the importance of diversity to better represent their customers. This number is likely to grow as customers, who are increasingly accustomed to personalized products and services, will expect D&I to be embedded in the customer experience. Meanwhile, 70% of millennials are more likely to choose one brand over another brand if that brand demonstrates D&I in terms of its promotions and offers.

As an industry that has been spearheading corporate D&I efforts for years, HR has deep expertise and can play a prominent role in leading the customer experience transformation. As companies look to amplify their market-relevance, HR departments will be charged with strategically staffing companies in ways that enrich the D&I profile and foster greater connections with customers.

The moral case for building fairer and more inclusive workplaces is clear: people matter and organizations have an ethical and legal obligation to ensure their people management strategies do not disadvantage any groups. But equally important, D&I has evolved from being an HR-led initiative to being one that is reverberated to all corners of a company as a key business strategy.

As global unemployment reaches its lowest point in 40 years and we enter an employment economy, the hiring landscape is only becoming more competitive. In this landscape, D&I is fast becoming one of the most powerful tools a business has. By keeping pace, HR can help companies leverage D&I to reimagine people management and elevate brand-loyalty among employees, customers and investors. 

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Fabio Takaki | 19 Dec 2019

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However, in the Middle East — traditionally one of the most challenging regions for female leaders to scale — women are gradually being named to leadership positions in the region's financial sector.1 As women make their mark in Middle Eastern finance and, in turn, their communities and region, business leaders around the world should take notice. Women Leaders in Middle East Finance   The growing number of influential women in Middle Eastern finance includes those working in banks, investment firms, financial law and consulting companies.1 For instance, in September 2018, Ms. Rola Abu Manneh was named CEO of Standard Chartered UAE, becoming the first Emirati woman to lead a bank in the UAE. With a long experience in UAE banking, Ms. Abu Manneh has the knowledge and leadership competencies to bring important business to her bank. In her first year as CEO, she has already advised Dubai-based Emaar Properties on the sale of its hotels to Abu Dhabi National Hotels.2 Ms. Rania Nashar is another great example — she is the first female CEO of Saudi commercial bank, Samba Financial Group, one of the largest in the region. Ms. Nashar has over 20 years of experience in the commercial banking sector and was named CEO in 2017, becoming the first female CEO of a listed Saudi Arabian bank.3 That was also a moment when Saudi Arabia began implementing reforms to promote gender equality as part of the KSA's Vision 2030, and Ms. Nashar says she wants to continue doing more. "I have to not only prove to myself that a bank of Samba's size can be run by a female CEO — and can achieve the best results in its history — I have to prove it for all the women in Saudi Arabia and in the world," Ms. Nashar notes. "I hope that I can be an honourable portrait for Saudi women."4 Ms. Lubna Olayan is also an influential leader in Saudi Arabia. For more than 30 years, she was the CEO of Olayan Financing Company, the holding company through which The Olayan Group's trading, real estate, investment, consumer and industrial-related operations are conducted in the Gulf region. She has received numerous awards and recognition, including landing in Time's list of the 100 most influential people in the world, Fortune's list of Most Powerful Women and recognized as a champion of women's economic empowerment.5 Why Gender-Balanced Leadership Matters   Women leaders such as these are helping to advance and make a shift in the gender balance in the region's financial sector. While they represent progress, there is still much to be done. Governments are working to increase the gender balance but transforming the mindsets of business leaders and overcoming bias is a slow process. However, it's a process worth pursuing. For organizations and nations that are facing workforce challenges, an underutilized female workforce represents a strategic opportunity to compete, grow and win, helping to transform the entire economy. According to Mercer's "When Women Thrive, Businesses Thrive" report, women's essential roles as providers, caretakers, decision-makers and consumers make them instrumental in the education and health of future generations, as well as the development of their communities. Women leaders can also be instrumental in building stronger and more collaborative teams; retaining, developing and nurturing talent; and bringing a diverse and new perspective for organizations. In fact, the Mercer report also shows that increased participation from women in the workforce has implications for the economic and social development of communities and nations. Economists have calculated that eliminating the gap between male and female employment rates could significantly boost gross domestic product by 5% in the United States, 9% in Japan, 12% in the United Arab Emirates and 34% in Europe. Achieving Gender Equity in Underrepresented Sectors   Finding the right approach for sourcing and engaging female talent depends on the individual company's culture and needs, but there are some broad strategies that may be effective globally. Mercer research shows that the chief building blocks for achieving gender diversity are health, financial well-being and talent management elements. 1. Health   Health concerns are of special significance to the female population, as women are affected by different health issues and illnesses than men, and they experience and use the healthcare system in different ways than men. 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These jobs are usually high demanding in working hours, requiring management of teams, clients and superiors. For women who achieve such positions, it may also coincide with motherhood period, making it even more challenging if companies do not provide adequate working arrangements — such as flexible working options leveraging technology, childcare support, mentoring and leadership support for women, business resource groups and diversity and inclusion efforts and training. Women in the workforce have an undeniable power to make meaningful contributions and expand businesses. When financial institutions and governments begin to focus on the strategies required to get talented women working and leading, they will begin to see positive results. Not only can influential women bring business acumen to help grow organizations, but their roles in societies also enable them to make significant improvements in education, communities and the transformation of countries. Sources: 1. "The 50 Most Influential Women in Middle East Finance," Financial News, 29 Apr. 2019, https://www.fnlondon.com/articles/the-50-most-influential-women-in-middle-east-finance-20190429. 2. "FN 50 Middle East Women 2019," Financial News, 2019,https://lists.fnlondon.com/fn50/women_in_finance_/2019/?mod=lists-profile. 3. "Rania Nashar," Forbes, 2018,https://www.forbes.com/profile/rania-nashar/#20d8136e473c. 4. Masige, Sharon. "Raising the Bar: Rania Nashar," The CEO Magazine, 27 Jun. 2019,https://www.theceomagazine.com/executive-interviews/finance-banking/rania-nashar/ 5. "Lubna Olayan Retires as CEO of Olayan Financing Co.; Jonathan Franklin Named New CEO," Olayan, 29 Apr. 2019, https://olayan.com/lubna-olayan-retires-ceo-olayan-financing-co-jonathan-franklin-named-new-ceo. 6. "Gender and Women's Mental Health: The Facts," World Health Organization, https://www.who.int/mental_health/prevention/genderwomen/en/#:~:targetText=Unipolar%20depression%2C%20predicted%20to%20be,persistent%20in%20women%20than%20men. 7. "The Cut: Exploring Financial Wellness Within Diverse Populations," Prudential, 2018, http://news.prudential.com/content/1209/files/PrudentialTheCutExploringFinancialWellnessWithinDiversePopulations.pdf.

Wejdan Alosaimi | 17 Oct 2019

For many decades, Saudi Arabia — as a nation, culture and economic force — has been inextricably tied to oil exports and the energy industry. However, a bold new vision, named Saudi Vision 2030, aims to wean the country off its dependencies on fossil fuels through the creation of sweeping new reforms and policies. This vision looks to modernize Saudi Arabia, both as a domestic society and a global financial powerhouse. The Power of Embracing Change   In 2016, Crown Prince Mohammad bin Salman bin Abdulaziz Al-Saud led the unveiling of the Saudi Vision 2030 initiative, which detailed the nation's unprecedented and extraordinary commitment to emerge as a leader in a rapidly evolving world. As oil prices continue to react to new economic realities and regional political forces shape the roles and objectives of nations throughout the Middle East, Saudi Arabia's decision to proactively embrace change could have extraordinary foreign and domestic ramifications. With a population of more than 33.4 million people and a median age of 25, Saudi Arabia faces a future filled with significant challenges and opportunities.1 Saudi Vision 2030 is a road map for how the nation will empower its millions of young citizens to work and thrive in a globalized world that increasingly views petroleum as an outdated and harmful source of energy. A shift in long-established revenue resources and economic paradigms requires a fundamental shift in local workforce skill sets and proficiencies with modern technologies. As other nations are slow to adjust to climate change and other geo-economic shifts, Saudi Arabia is poised to exemplify to the rest of the world how governments can leverage policy reform to enhance the lives of people both inside and outside the country's borders.2 Accommodating a Complex Global Economy   Saudi Vision 2030 will have a profound impact on rapidly growing economies, such as India, that seek to leverage digital transformation while implementing innovative domestic and workforce policies. In fact, the fate of Saudi Arabia and India are becoming increasingly intertwined, as India — unlike many western economies — requires more oil to empower its robust economic rise. Industrialized markets, in areas such as Europe and the United States, are seeking greener alternatives and more electric vehicles for transportation demands, but India remains heavily dependent on fossil fuels. 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The focus on increasing privatization and other non-oil industries — such as construction, finance, healthcare, retail and religious tourism — will create new opportunities for Saudi businesses and entrepreneurs.4 Creating a Future Through Indigenous Resources   Saudi Vision 2030 addresses many of the local, cultural challenges facing the nation, such as the role of women in the workforce and society, the impact of digital transformation and automation, and the need to modernize the sensibilities of Saudi businesses. Allowing women to drive and granting them greater access to economic prosperity — with the goal of increasing women's participation in the workforce from 22% to 30% — has generated positive responses with global investors. The 2030 plan also prioritizes domestic issues and the overall health of its citizens, with the stated objective of raising the average life expectancy from 74 to 80 years and aggressively promoting daily exercise and healthier lifestyles for all Saudi citizens.5 The Saudi government also seeks to bring its society into the digital age by implementing more e-government services that will connect citizens to resources through smartphones, data-centric operations and other technologies. This push will also drive human capital out of government jobs and into the private sector. According to the Mercer Global Talent Trends 2019 report, companies in countries such as India, Brazil, and Japan will experience a 70% increase in automation, boosting their need — like Saudi Arabia — to find new roles and professional development opportunities for workers. The 2030 plan offers an ambitious vision for the nation's indigenous resources. Empowering women and integrating modern technologies throughout its economy and government are just part of this comprehensive strategy. By inviting the global economy to invest in its progressive financial mechanisms and bolster tourism through campaigns highlighting the nation's history, Saudi Arabia is poised to lead its people, and the world, into a future forever defined by a new, modern view of the future. Will it work? The world will know in 2030. Sources: 1. Kingdom of Saudi Arabia. "Saudi Census: The Total Population." General Authority for Statistics, Accessed 11 July 2019,https://www.stats.gov.sa/en/node. 2. Mohammed bin Salman bin Abdulaziz Al-Saud. "Vision 2030." Vision 2030, 9 May. 2019, https://vision2030.gov.sa/en. 3. Critchlow, Andrew. "India is too important for oil titan Saudi to ignore." S&P Global Platts, 6 Mar. 2019, https://blogs.platts.com/2019/03/06/india-important-oil-saudi/. 4. Nuruzzaman, Mohammed. "Saudi Arabia's 'Vision 2030': Will It Save Or Sink the Middle East?" E-International Relations, 10 Jul. 2018, https://www.e-ir.info/2018/07/10/saudi-arabias-vision-2030-will-it-save-or-sink-the-middle-east/. 5. "Saudi Arabia Vision — Goals and Objectives." GO-Gulf, 14 Jul. 2016,https://www.go-gulf.com/blog/saudi-arabia-vision-2030/.

Varun Khosla | 03 Oct 2019

For decades, any conversation involving startups and executive compensation conjured images of Silicon Valley and shiny office buildings full of technology virtuosos working for innovative companies striving to be the next billion-dollar unicorn. Now, a new era of global startups is taking root in previously unexpected regions around the world. In fact, recent research reveals that $893 million was invested in 366 startups throughout the Middle East and North Africa. That number represents a $214 million increase from 2017, which saw $679 million in startup investments.1 Similarly, startups are increasing in Southeast Asia, largely driven by "SEA turtles" — locally born residents who studied and worked overseas (mostly in the West, in places like Silicon Valley) and are returning home to launch their own startup companies. The region has experienced a major inflection point, with VC investors in Southeast Asia investing over $7.8 billion across 327 deals.2 There's one key component all these startups need, however: leadership. But attracting and retaining executive-level talent and management teams can be a major challenge for these burgeoning startup hotbeds, especially when it comes to compensation. Corporate Investors Are Changing Executive Compensation   Many of the world's most recognizable startups were launched by charismatic, individual founding partners, such as Jeff Bezos, Jack Ma and Mark Zuckerberg. However, the rise of these luminaries and their compelling stories do not mirror the new era of startups blossoming around the world. In the Middle East and North Africa (MENA), for example, investment companies are providing the initial financial backing needed to launch startups. These investment companies are there from day one to ensure the startups have the capital needed to secure subsequent rounds of funding. Additionally, the executives of these startups are not the original founders and, therefore, desire different compensation models to secure their continued loyalty, creativity and commitment. Acquiring top C-level talent for startups can be a daunting task, as the risk level is high for businesses that do not have a proven track record — or any record at all. Traditionally, western-based startups have fashioned executive compensation packages around medium- to long-term benchmarks predicated on the company's expected growth, but triangulating growth models, investment strategies and executive payment packages can be a complicated and tenuous proposition. Since most global startups today are built around investment companies instead of inspirational individual founders, these companies must be diligent when determining how or how much to pay the executives — who can ultimately mean the difference between success and failure. How Much Should Executive Compensation Be?   Investment companies naturally want to maximize their profits, which means they want to retain as much equity in the startup and as many shares of the startup as possible. Every dollar, share of stock or option paid to startup executives is money the investment companies surrender to operational costs. However, low-balling startup executives or opting to hire those who aren't as skilled or experienced also comes with the risk of undermining the startup's ability to compete, grow and drive revenue. Financial arrangements that provide management with a potential share of equity (or shadow equity) require careful thought and consideration. An executive compensation plan must act as an incentive and retention device for startup executives while delivering a fair return to investors and shareholders who have funded the company. Investors and shareholders must decide how much dilution of equity they are willing to accept to provide an appropriate equity pool for the management team. This is why many companies decide to execute a scaled approach that decreases the size of the equity pool with each round of funding to accommodate the increasing value of the company. This type of program impacts the dilution of equity and can allow for more creative compensation strategies — particularly when dealing with more sophisticated startups, such as in the pharma and fintech industries, which require the talent and knowledge of more accomplished professionals and leaders. Investment companies can offer either share options, which give employees the right to buy or sell stock at a designated time and price, or full-value shares, which offer employees actual ownership in the company. Both contribute to the dilution of equity, but options typically contribute more to the equity dilution than full shares. For example, an equity pool comprised of options may amount to 15% to 20% of a company's capital, while a pool comprised of shares may amount to as little as 3% to 5%. This indicates the same amount of long-term incentive awards paid in options will lead to higher equity dilution than awarding full shares. Investment companies must determine which strategy best suits their objectives. When to Pay Executives and Management   Should investors pay their executives and management teams only after they have received a return on their investments? Or should executive compensation be based on employees performing their jobs to the best of their abilities, regardless of the outcomes — which are often determined by external economic forces beyond their control. Many startups now implement the former strategy, believing that benchmarks for returns on investments motivate executives and provide them with the extra incentive to do everything possible to create shareholder value. In fact, in a majority of cases, long-term incentive plans only pay out when investors receive a return. Alternately, some startups choose to compensate executives and management based on specific, mutually agreed upon corporate goals and objectives. Compensation can then be provided as cash or shares, though there may be restrictions on when those shares can be sold or vested or whether they come in the form of options or full-value shares. Startups are popping up all over the world, ushering in a new frontier of ideas and innovation, as well as investors and executives who will create the next generation of future unicorns. As new trends continue to emerge for how executives in these startups are compensated, global startups will need to review their options with scrutiny to attract the best executive talent while maximizing returns for investors. Sources: 1. "2018 MENA Venture Investment Summary." MAGNiTT, January 2019,https://magnitt.com/research/2018-mena-venture-investment-summary. 2. Maulia, Erwida. "Southeast Asian 'turtles' return home to hatch tech startups." Nikkei Asian Review, 22 May 2019,https://asia.nikkei.com/Spotlight/Cover-Story/Southeast-Asian-turtles-return-home-to-hatch-tech-startups.

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Pat Milligan | 19 Dec 2019

Life expectancies have risen sharply in recent decades, from an average age of under 53 years in 1960 to 72 years in 2017. And in high-income countries, the average life expectancy is closer to 80 years of age.1 Given longer lives and longer work lives across the globe, fewer people today are adhering to a career model defined by three key phases of professional working life: school, work and retirement. Instead, a multistage life is increasingly common — one in which individuals may go in and out of the workforce, work part time or join the gig economy, and get new training or credentials in midlife or later. As workforces live longer and delay retirement, employers are struggling to evolve models, practices and policies that align with this new reality. To permit people to extend working life and remain productive into older age, employers must become "age ready" — or risk losing out on the benefits this growing segment has to offer. Another important factor is ensuring these employees are not victims of age discrimination — a common prejudice that often goes overlooked even in organizations committed to employment equity and that embrace the most comprehensive Diversity & Inclusion strategies. A Global Workforce of Experienced Employees   Mercer's "Next Stage: Are You Age-Ready" report reveals that, though populations across the world are living and working longer, the Asia Pacific region is feeling the greatest impact from a rapidly emerging generation of experienced employees. In fact, the report states that there will more than 200 million people age 65 and older between 2015 and 2030. Japan is becoming the world's first "ultra-aged" population, where those over 65 years of age will comprise more than 28% of the population. Hong Kong, South Korea and Taiwan — designated as "super-aged" populations — are not far behind, with more than 21% of their citizens soon becoming 65 and older. Increasing life expectancies have forced mature employees to face some difficult decisions. While many continue working out of a desire to learn new skills, connect with others or satisfy a desire to contribute to society, some aging workers don't have that choice. Instead, these employees continue working simply to finance the costs of their extended lives. Getting older is expensive, and weakening pension systems, poor savings habits in a context of inequalities in income growth, and low interest rates have all conspired to undermine the security once taken for granted by those nearing retirement age. Aging workers who opt not to retire present their employers, as well as incoming generations of younger workers, with unprecedented challenges and opportunities. Dispelling Preconceived Notions and Biases   Though workplaces around the world have greatly improved their efforts to curtail discrimination related to an employee's race, sexual orientation and gender, efforts to address age discrimination are often overlooked. Here are some of the most entrenched and damaging myths concerning seasoned employees, according to Mercer's Next Stage report: 1.  Myth: "Experienced workers are less productive." Truth: Extensive research dispels the myth that job performance declines with age. 2.  Myth: "Experienced workers have difficulties learning new skills and technologies." Truth: The hurdle here is not that these workers have difficulties learning new skills, but rather they often haven't previously received the training necessary to advance certain skills or knowledge. However, research shows that 85% of workers, including experienced employees, actively seek opportunities for skills development and technical training to enhance their career development possibilities. 3.  Myth: "Experienced workers are more costly." Truth: Pay can be higher for increased age (and responsibility) but older workers can significantly reduce costs for employers in other ways, like through reduced turnover rates. In Mercer's data, some drop off in pay for the same level of job is experienced as workers age. Mercer's penetrating research and analysis on the productivity levels, learning intent and capacities, and employer expenses related to experienced workers reveals a much more nuanced and complex relationship between older employees and their younger colleagues. Even in study cases where older workers did show lower individual productivity levels, the assessments did not account for key nuances, such as the time dedicated to mentoring, training and guiding others instead of focusing on their individual performances. Expanding the Value of Experienced Employees   Businesses must learn to capitalize on the talents, skills and potential of mature employees who are postponing retirement. Mercer's Global Talent Trends 2019 report states that the integration of modern technologies into corporate HR systems presents older employees with powerful tools that can teach them new, valuable skills. In addition, these technologies provide them with curated career development paths using specialized learning functionalities and predictive software algorithms. Corporate learning platforms can be used to shape content relevant to a particular ambition, close a skills gap or build connections among peers who can share expertise. Curated learning programs also allow employees to develop at their own pace and earn credentials based on benchmarks determined by personal career objectives. Professional development opportunities for experienced employees are also limited by many employers' inability to accurately assess the value and scope of their contributions. Mercer's Next Stage report argues that experienced workers can contribute significantly to organizational performance through their deep institutional knowledge, social capital specific to the business and technical or content expertise honed from years of on-the-job practice. Also, critical soft skills, such as listening, communicating, collaborating and team building, are commonly undervalued. Businesses that rely on common proxies for performance, such as performance ratings, promotion probability and pay, are likely to under-appreciate the contributions of their experienced workers and miss opportunities to better leverage their work. By maximizing the value and potential of experienced workers, employers can create new professional development opportunities that leverage these workers' experience, expertise and life-knowledge. With age comes wisdom. When empowered, experienced employees can lead their companies into the future — guided by their invaluable experience with the past. Sources: 1. "Life expectancy at birth, total (years)." The World Bank, 2017, https://data.worldbank.org/indicator/sp.dyn.le00.in

Fabio Takaki | 19 Dec 2019

Influential women can make a transformative difference in a company, industry or even a nation. When women are leaders, they are more likely to contribute to education, health and community development programs in the areas where they work and live, according to Mercer's "When Women Thrive, Businesses Thrive" report. Despite the positive benefits women leaders bring to businesses and communities, female decision-makers remain difficult to find in leading financial firms around the world. Women are also significantly underrepresented on the leadership teams of companies that receive investment capital. A new report from Oliver Wyman (part of MMC group of companies) shows that globally, women hold 20% of positions in executive committees and 23% on boards, but only 6% of CEOs in financial institutions are women. However, in the Middle East — traditionally one of the most challenging regions for female leaders to scale — women are gradually being named to leadership positions in the region's financial sector.1 As women make their mark in Middle Eastern finance and, in turn, their communities and region, business leaders around the world should take notice. Women Leaders in Middle East Finance   The growing number of influential women in Middle Eastern finance includes those working in banks, investment firms, financial law and consulting companies.1 For instance, in September 2018, Ms. Rola Abu Manneh was named CEO of Standard Chartered UAE, becoming the first Emirati woman to lead a bank in the UAE. With a long experience in UAE banking, Ms. Abu Manneh has the knowledge and leadership competencies to bring important business to her bank. In her first year as CEO, she has already advised Dubai-based Emaar Properties on the sale of its hotels to Abu Dhabi National Hotels.2 Ms. Rania Nashar is another great example — she is the first female CEO of Saudi commercial bank, Samba Financial Group, one of the largest in the region. Ms. Nashar has over 20 years of experience in the commercial banking sector and was named CEO in 2017, becoming the first female CEO of a listed Saudi Arabian bank.3 That was also a moment when Saudi Arabia began implementing reforms to promote gender equality as part of the KSA's Vision 2030, and Ms. Nashar says she wants to continue doing more. "I have to not only prove to myself that a bank of Samba's size can be run by a female CEO — and can achieve the best results in its history — I have to prove it for all the women in Saudi Arabia and in the world," Ms. Nashar notes. "I hope that I can be an honourable portrait for Saudi women."4 Ms. Lubna Olayan is also an influential leader in Saudi Arabia. For more than 30 years, she was the CEO of Olayan Financing Company, the holding company through which The Olayan Group's trading, real estate, investment, consumer and industrial-related operations are conducted in the Gulf region. She has received numerous awards and recognition, including landing in Time's list of the 100 most influential people in the world, Fortune's list of Most Powerful Women and recognized as a champion of women's economic empowerment.5 Why Gender-Balanced Leadership Matters   Women leaders such as these are helping to advance and make a shift in the gender balance in the region's financial sector. While they represent progress, there is still much to be done. Governments are working to increase the gender balance but transforming the mindsets of business leaders and overcoming bias is a slow process. However, it's a process worth pursuing. For organizations and nations that are facing workforce challenges, an underutilized female workforce represents a strategic opportunity to compete, grow and win, helping to transform the entire economy. According to Mercer's "When Women Thrive, Businesses Thrive" report, women's essential roles as providers, caretakers, decision-makers and consumers make them instrumental in the education and health of future generations, as well as the development of their communities. Women leaders can also be instrumental in building stronger and more collaborative teams; retaining, developing and nurturing talent; and bringing a diverse and new perspective for organizations. In fact, the Mercer report also shows that increased participation from women in the workforce has implications for the economic and social development of communities and nations. Economists have calculated that eliminating the gap between male and female employment rates could significantly boost gross domestic product by 5% in the United States, 9% in Japan, 12% in the United Arab Emirates and 34% in Europe. Achieving Gender Equity in Underrepresented Sectors   Finding the right approach for sourcing and engaging female talent depends on the individual company's culture and needs, but there are some broad strategies that may be effective globally. Mercer research shows that the chief building blocks for achieving gender diversity are health, financial well-being and talent management elements. 1. Health   Health concerns are of special significance to the female population, as women are affected by different health issues and illnesses than men, and they experience and use the healthcare system in different ways than men. For example, there are gender specific risk factors for common mental disorders that disproportionately affect women, affecting their capacity to be productive at work. Unipolar depression, a leading factor of working disability, is twice as common in women than in men.6 To achieve gender equity in business, companies must make healthcare available to women in the ways they most need, including: 1.  Flexibility for maternity leave 2.  Physical health, wellness and mental health support 3.  More autonomy and access to health resources 4.  Psychological support for severe life events 5.  Confidential medical support dedicated for women 2. Financial Well-being   Women reportedly have greater financial responsibility and greater financial stress than men. According to a 2018 study conducted by Prudential, the average woman has saved less for retirement compared to the average man. Only 54% of women have put aside money for retirement, and on average, they have saved $115,412. By contract, 61% of men have saved for retirement, and on average, they have saved $202,859. This greatly increases the likelihood of a woman living in poverty in retirement and is exacerbated by women's longer life expectancies.7 To address this, organizations need to ensure that women receive fair financial compensation, greater coaching and educational support in planning for their financial futures, tailored retirement options for women, and encouragement for systematic and regular contributions to savings and retirement accounts. 3. Talent Management   Women need opportunities for advancement, as well as training and development opportunities. In addition, they also need flexible work options that make it possible for them to fulfill other essential roles outside of work. Attention to management positions are critical to further improve the gender participation in executive levels. These jobs are usually high demanding in working hours, requiring management of teams, clients and superiors. For women who achieve such positions, it may also coincide with motherhood period, making it even more challenging if companies do not provide adequate working arrangements — such as flexible working options leveraging technology, childcare support, mentoring and leadership support for women, business resource groups and diversity and inclusion efforts and training. Women in the workforce have an undeniable power to make meaningful contributions and expand businesses. When financial institutions and governments begin to focus on the strategies required to get talented women working and leading, they will begin to see positive results. Not only can influential women bring business acumen to help grow organizations, but their roles in societies also enable them to make significant improvements in education, communities and the transformation of countries. Sources: 1. "The 50 Most Influential Women in Middle East Finance," Financial News, 29 Apr. 2019, https://www.fnlondon.com/articles/the-50-most-influential-women-in-middle-east-finance-20190429. 2. "FN 50 Middle East Women 2019," Financial News, 2019,https://lists.fnlondon.com/fn50/women_in_finance_/2019/?mod=lists-profile. 3. "Rania Nashar," Forbes, 2018,https://www.forbes.com/profile/rania-nashar/#20d8136e473c. 4. Masige, Sharon. "Raising the Bar: Rania Nashar," The CEO Magazine, 27 Jun. 2019,https://www.theceomagazine.com/executive-interviews/finance-banking/rania-nashar/ 5. "Lubna Olayan Retires as CEO of Olayan Financing Co.; Jonathan Franklin Named New CEO," Olayan, 29 Apr. 2019, https://olayan.com/lubna-olayan-retires-ceo-olayan-financing-co-jonathan-franklin-named-new-ceo. 6. "Gender and Women's Mental Health: The Facts," World Health Organization, https://www.who.int/mental_health/prevention/genderwomen/en/#:~:targetText=Unipolar%20depression%2C%20predicted%20to%20be,persistent%20in%20women%20than%20men. 7. "The Cut: Exploring Financial Wellness Within Diverse Populations," Prudential, 2018, http://news.prudential.com/content/1209/files/PrudentialTheCutExploringFinancialWellnessWithinDiversePopulations.pdf.

Amy Scissons | 28 Nov 2019

What does it take to lead successful international teams? Successful teams are often united over a common goal and a shared set of experiences. But, as the workforce becomes more distributed and business travel becomes increasingly burdensome to the bottom line and detrimental to the environment, leaders need to be more creative in developing and fostering positive team dynamics. With fewer face-to-face meetings, how are international leaders coalescing their teams? Here are four habits I have adopted that you should consider in managing international teams: Habit 1: Remove the Mentality of "You Need to Be There"   Technology is, without a doubt, the game changer when it comes to international team effectiveness. Yet, human-led organizations often struggle to accommodate and leverage the speedy and persistent nature of change brought by digital technologies. There are, of course, times when face-to-face meetings are required; however, Mercer has noticed clients are demonstrating an increasing comfort level with holding seminars, conferences and other traditional in-person interactions via online meeting platforms. Though the virtual workforce trend is nothing new, it has reached an inflection point where clients often prefer to partner with companies that actively internalize the power and practicality of being agile, versatile and virtual. Today's transformative Chief Marketing Officers (CMOs) urge their C-suite peers to adopt have this mindset and leverage differentiating new technologies. As managers, marketing leaders will find that their employees and marketing teams are more productive and online more, if allowed to do their work on their own time. People react well to not only managing their work but also having the flexibility to set their own schedules. At Mercer, we have seen our people work with more excitement, passion and collaborative enthusiasm when provided the freedom to excel according to their personal cadences. Let talented people do what they need to do to get stuff done. Habit 2: Cross-Cultural Communication With International Teams   With the direction set and the team empowered to find their path forward, it's time to focus on communication. Different cultures, of course, perceive, process and interpret information and context differently. These differences can create communication breakdowns that are extremely costly in terms of time, quality and money. Effective messaging is direct and only refers to limited but critical pieces of information that necessitate a particular email, phone call or conversation. Inspiring leaders find their voice and communicate in a way that is simple, memorable and supportive. All correspondences among international teams should be carefully packaged, contained and well thought out. Don't underestimate the power of repetition. Often, when dealing with team members from multiple cultures and languages, repetition of established goals, processes, timelines and expectations is vital to successful outcomes. Repetition, when done with tact and clear intentions, is not disrespectful or seen as micromanaging. It bolsters the ability of everyone on the team to achieve their goals (honestly, I find repetition extremely helpful. By the time I'm reminded what we're trying to get done three or four times — especially in a few different ways — it sticks!). When you're dealing with cross-border teams, never assume that everyone fully understands the strategy and desired results on the first two or three discussions. Using repetition creatively helps the team focus on the north star. Habit 3: Be Succinct and Culturally Aware   Cultural awareness is learned. It took me a while to appreciate and understand the nuances of each member of my team, not only in their approach to solving problems, but the influence of their culture on their overall outlook. Our research on diversity and inclusion points to the value of ensuring all voices are heard on the team. As a matter of fact, there are a range of products today designed to enable employees to share their perspectives (separate from employee engagement surveys) — and many of these are being tailored for D&I purposes. With international teams, this lesson is particularly punctuated. When team members in Tokyo, Taiwan and Mexico City are speaking to each other, ensuring they use the same direct, simple and familiar language increases efficiency and the likelihood of success. Being culturally sensitive and aware is incredibly important. Years ago, I used to feel very concerned if people were not speaking up in marketing meetings or weren't instantly on video conferences showing their face, but I realized over time that people need to communicate in ways that make sense to them. As a leader, I've learned it is my responsibility to respect other people's learning and working styles and that — if I did that — these individuals would become increasingly more open and trusting of me. Marketing leaders have to earn trust, just like everyone else. It is important to not expect that people think and act the way you think and act. People come from different perspectives and have different personality types — from introverts to extroverts and everything in between. And that diversity is instrumental to success. Habit 4: Lead With Genuine Positivity   My favorite habit, is bringing my whole self to work. As leaders, we must make a conscious effort to be encouraging and find genuine, sincere ways to boost people's confidence. This takes time and awareness as each person behaves according to varying types of motivations, instructions and sensibilities. As a company, we have to be demanding, because we have aggressive goals. However, the most effective and rewarding route to achieving those goals is by making the conscious decision to encourage employees as they execute their responsibilities — especially during challenging times. Regardless of gender, race or nationality, I think that one overriding universal truth is that people respond more graciously, productively and passionately to authentic positive feedback and encouragement. I know this personally, because I have benefited from positive reinforcement many times in my career — often when I needed it the most — from my peers, colleagues and fellow team members. It really helps. In fact, the most successful leaders I know and have worked with are extremely positive people. Teams and individuals need to be reminded, particularly during tough times, that they are doing excellent work and they are moving in the right direction. Never underestimate how much a genuine comment, like "You're doing a great job" and "Keep going" can do for someone who feels overwhelmed, underappreciated or unmotivated at a particular moment in their career. Positivity is all about appreciating the time and work employees invest into success and giving them credit for their efforts and accomplishments. Originally published in Thrive Global.

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