It comes down to values
The business and ethical considerations for embracing DEI.
CUNA Senior Policy Analyst Samira Salem offered a business case for diversity, equity, and inclusion (DEI) during a breakout session at America’s Credit Union Conference at Walt Disney World® Resort in Florida Wednesday.
Salem authored a chapter on DEI in the 2019-2020 CUNA Environmental Scan Report.
Salem noted that people of color accounted for 61% of growth in credit union membership in the past five years, according to CUNA Mutual Group, presenting both a challenge and an opportunity for credit unions.
Salem referenced former CUNA Board Chairman Maurice Smith, president/CEO of Local Government Federal Credit Union, Raleigh, N.C., who said credit unions have the opportunity to distinguish themselves from the competition by embracing DEI ideals.
In an op-ed piece commemorating Black History Month, Smith called for expanding cooperative principles to include diversity and inclusion.
“Credit unions are unique in the financial services industry because we’re the only one that actually have a values case,” Salem says.
Salem explained that diversity is how individuals differ from one another. This may include race, ethnicity, gender, gender identity, veteran status, religion, and marital status. An inclusive workplace is one in which diversity is valued, and people feel a sense of belonging and can be their true selves.
“In an inclusive workplace people feel empowered, and that allows them to reach their full potential,” Salem says. “That has positive implication on productivity.”
Equity in the credit union space is best understood as related to financial inclusion and how credit unions reach and serve diverse and often underserved populations, Salem said.
In fact, DEI is recognized as a competitive advantage, Salem said. In Deloitte’s 2017 Global Human Capital Trends Study, 78% of executives rate DEI as an important issue and say it increases competitive advantage. Another 85% of CEOs whose organizations have a diversity and inclusiveness strategy say it’s enhanced their organization’s performance.
In McKinsey’s 2018 Delivering Through Diversity study, organizations with high diversity in leadership were 21% more likely to achieve above average profits, while those with high cultural and ethnic diversity in leadership were 33% more likely to achieve above average profits. At the same time, organizations with low gender, cultural, and ethnic diversity in leadership were 29% less likely to achieve above average profits.
Forty-seven percent of millennials actively look for employers with diversity and inclusion programs and would take less pay to work for an employer that shares their values, according to a survey by Weber Shandwick and KRC Research.
“One of the major challenges that organizations face today is attracting and retaining top talent,” Salem says. “We call it the war on talent. Diverse, equity, and inclusion in organizations actually helps organizations to win that war on talent.”
Salem noted that CUNA and its board have committed the organization to serving as a thought leader on DEI, and the board approved a corporate statement the issue.
“There is a momentum around this issue within the credit union movement,” Salem says. “We know that there is a strong values case for credit unions as well as strong business case. So the question is, are we going to embrace it?”