Indian Inc pays lip service to diversity and inclusion. Real change is hard

While the government wants uniformity and homogeneity in classrooms and the country, companies in India that seek profitable longevity say they are embracing diversity, equity and inclusion (DEI). They say that they regard people of diverse background, ethnicity, gender, geography and personality-types as helping generate ideas and practices to face a competitive environment by bringing a range of experiences and perspectives and avoiding groupthink.

These companies believe people give their best when they feel they belong, and inclusive places enable employees to be their authentic selves. They say that employee diversity for them is not a problem but a solution. For multinational corporations, DEI is a necessity as their employees are of different nationalities and ethnicities. Their head offices are the world in miniature.

For progressive domestic companies, DEI means correcting the gender balance more than being equal opportunity employers of Dalits, tribals, persons with disabilities (PwD), members of minority religious communities and LGBTQs.

In its 2018 report on ‘The Power of Parity’, McKinsey Global Institute said that India could add as much as $770 billion to its 2025 GDP by advancing women’s equality. The report noted that the contribution of women to India’s GDP at 18 per cent was among the lowest in the world. It said that conditions must be created for more women to seek and find work.

But little has changed. Among working age women, the share of those either employed or looking for work was 9.39 per cent in September-December 2021, down from 10.87 per cent in pre-pandemic September-December 2019, according to the Centre for Monitoring Indian Economy (CMIE). Between these two periods, the addition to the female workforce was 16.3 million, but the number of those employed or seeking employment declined by 5.68 million. (CMIE does employment surveys across the country throughout the year.)

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In the organised private sector, progressive companies have targets for increasing the share of women, particularly in senior management and at the board level. Godrej Housing Finance says that half of its board members and top management leaders are women, and among employees at all levels their share is 30 per cent. Paint manufacturer AkzoNobel India says that it aims to have 30 per cent female senior executives by 2025. KONE Elevator India wants 30 per cent women directors by 2030.

Companies in this category have a range of offerings to retain women employees: generous sick leave, flexible working hours and daycare facilities. They allow women to return and resume their positions after childbirth. To make it easier, they may allow new mothers to take their kids with them on work-related travel along with domestic assistants. Many such companies enlist men as allies to grease the path and avoid friction. Unconscious bias training and the vetting of job applications with masked photos, names and gender are some of the ways by which these companies try to scrub subjectivity during recruitment and promotions.

It’s not that companies have turned angelic. The law that mandates women’s representation on boards is cosmetically observed while the essence is violated. The Companies Act of 2013 requires firms listed on stock exchanges to have at least one woman as a board member.

According to an article published in the February 2021 edition of Harvard Business Review, of the top 500 companies ranked by market capitalisation on the National Stock Exchange, 303 or about 61 per cent had no women on their boards, when the law was enacted and needed to appoint at least one female director by April, 2015.

In 2017, the authors of the study found that about 83 per cent of previously non-compliant firms had a woman to their boards, while about 14 per cent of the 303 companies had appointed two or more women. But they were missing from key committees despite being qualified, defeating the purpose of governance reform.

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Arti Chaudhry, a corporate consultant on diversity and inclusion, and a board member of several companies says for private corporates caste and regional representation are taboo subjects for fear of stoking division among employees.

In 2006, then prime minister Manmohan Singh had asked officials to examine the possibility of reserving jobs for Dalits and tribals in the private sector. But companies opposed the move – offering them instead skills training.

The government as an employer is ahead of the private sector in giving representation for Dalits, tribals and PwDs. The Constitution makes it obligatory for the state to reserve jobs for Dalits and tribals. In 1991, job reservations were extended to Other Backward Castes.

But reservations have not made much of a dent in positions with good pay and authority. Last February, the government told the Lok Sabha that despite reservations, Dalit and tribals candidates were not able to fill their quota in Category A and B jobs or in scientific and technical posts. There was ‘pronounced’ recruitment failure for tribals even in Category C and D jobs. But they fare better in civil services exams. In 2020, of 761 successful candidates, 112 were Dalits, 61 tribals and 229 OBCs.

Of the 31 million central government employees in 2011, only 11 per cent were women. By 2020, the central government had added one million to its workforce, but the proportion of women is unlikely to have changed much.

PwDs were given 3 per cent reservation in government jobs in 1995. Their rights were codified in 2016. All government establishments and private organisations with 20 or more employees have to list the posts suitable for PwDs and the manner of selection. Workplaces are required to have assistive devices and barrier-free access. But most establishments do not comply citing lack of candidates as a reason.

Same sex persons lived in fear of the law that criminalised ‘unnatural sex’ but a 2017 Supreme Court judgement held that privacy is a fundamental right and sexual orientation is an essential attribute of privacy. Axis Bank is among the very few Indian companies that has explicit policies and practices for employees and customers from the LGBTQIA+ community. They can dress as per the gender they identify with. Same sex partners can open joint accounts and prefix their names with Mx in savings and term deposit accounts. Same-sex partners of employees can also claim company-paid medical insurance benefits. Hindustan Unilever, ITC, Amazon India, Oracle India, Lalit Hotels and Godrej Industries are among the few companies that have a welcoming attitude to same-sex persons.

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Among minority religious communities, Muslims are the most disadvantaged, as the Rajinder Sachar committee said in its report of 2006. But they face discrimination both in the workplace and in society. This has increased markedly in the past few years because of political changes. Some employers have felt emboldened to publicly declare that they will not hire Muslims. There are reports of customers saying they don’t want to be served by Muslim food delivery agents, though reassuringly, companies like Zomato have not given in.

India has to grow at high rates to employ the large numbers joining the workforce every year. Domestic savings will not be enough; it will need foreign capital also well as export earnings. Open markets and a competitive environment are essential. Indian companies will also have to be open and democratic spaces to be creative, innovative and competitive.