Talent Scarcity: DEI as a Commercial Imperative

Talent scarcity. It’s the elephant in the room at every board meeting, the unspoken anxiety in every leadership huddle. We see it, we feel it, and we know it’s only getting worse. But what if the solution isn’t just about finding more people, but about finding different people?

For too long, Diversity Equity and Inclusion has been framed as a moral imperative, a box-ticking exercise driven by HR departments. While the moral argument is undeniably important, framing DEI solely through this lens misses a crucial point: it’s a commercial necessity. Limiting your talent pool based on outdated prejudices or a desire for “easy” hires is a surefire way to fall behind in today’s competitive landscape.

I’ve seen this firsthand throughout my career. Whether it was in the fast-paced world of media, the high-stakes environment of sports, or the ever-evolving tech sector, the teams that thrived were the ones that embraced diversity in all its forms. They weren’t just ticking boxes; they were actively seeking out different perspectives, experiences, and backgrounds.

Think about it. Innovation thrives on friction, on the clash of ideas. If everyone in your team thinks the same way, comes from the same background, and shares the same experiences, you’re essentially building an echo chamber. You’re missing out on the insights and perspectives that can unlock new opportunities and drive real growth.

The evidence is clear. Study after study shows that diverse companies are more profitable, more innovative, and more resilient. A McKinsey report, for example, found that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the bottom quartile. For ethnic and cultural diversity, the outperformance was even higher at 36%.

But it’s not just about ticking boxes or hitting quotas. True DEI requires a fundamental shift in mindset. It requires creating a culture where everyone feels valued, respected, and empowered to contribute their best work. It requires actively challenging biases, both conscious and unconscious, and creating systems and processes that are fair and equitable.

Now, let’s consider how this applies to our different audiences.

For the Builders, the leaders of growing companies, this means building DEI into the very fabric of your organisation. It’s not just about hiring diverse talent; it’s about creating an inclusive culture where that talent can thrive. This requires a top-down commitment, clear policies and procedures, and ongoing training and development. It also means being willing to challenge your own assumptions and biases, and to listen to the voices of those who are different from you.

For the Buyers, the Venture Capital firms, Private Equity firms, Family Offices and Strategic Buyers, this means incorporating DEI into your due diligence process. Are the companies you’re investing in truly diverse and inclusive? Are they creating a culture where all employees can thrive? These are critical questions that can impact the long-term value of your investments. A company with a homogenous team and a history of discrimination is a red flag, regardless of its current financial performance.

For the Sellers, the owners of established, profitable businesses contemplating a sale, this means understanding that DEI is now a key factor in determining the value of your business. Buyers are increasingly looking for companies that are not only profitable but also sustainable and socially responsible. A strong DEI track record can significantly increase the attractiveness of your business and ultimately drive a higher sale price.

The rise of automation, AI, and other emerging technologies only amplifies the importance of DEI. As machines take over routine tasks, the skills that will be most valued are creativity, critical thinking, and emotional intelligence. These are skills that are often found in diverse teams, where different perspectives and experiences can spark new ideas and challenge conventional wisdom.

Moreover, the increasing demand for efficiency means that companies can no longer afford to waste talent. Limiting your talent pool based on outdated prejudices is not only morally wrong but also economically foolish. You’re essentially leaving money on the table.

So, what can you do? Here’s some practical advice:

In conclusion, DEI is not just a moral imperative; it’s a commercial necessity. In a world of talent scarcity, limiting your talent pool based on outdated prejudices is a recipe for failure. By embracing diversity, equity, and inclusion, you can unlock new opportunities, drive innovation, and build a more sustainable and successful business.

We at Skipa are passionate about helping businesses build extraordinary companies. We believe that DEI is a critical component of that process. If you’re ready to take your DEI efforts to the next level, we’re here to help. Let’s build extraordinary companies together.