Indian SMEs & MSMEs Can Benefit by Adopting Diversity & Here's the DEI Blueprint to Success

By: Dr. Saundarya Rajesh, Founder & President, Avtar Group

Dr. Saundarya Rajesh, founder and president of Avtar Group, is a social entrepreneur, career doctor, and one of India’s top DEI strategists. She founded Avtar in 2000, pioneering Diversity, Equity, and Inclusion in India. Under the aegis of Avtar, she founded Avtar Human Capital Trust – the not-for-profit organization, and has created employment opportunities for over a hundred thousand second-career women and influenced over two hundred thousand continued careers.

In an in-depth conversation with Women Entrepreneurs Review Magazine, Dr Saundarya shares the four-fold benefit of adopting DEI practices in workplaces while also highlighting the frameworks companies can utilize. She mentions that in order to create a diverse and inclusive workplace, one does not need big budgets or complex policies. SMEs and MSMEs must focus on awareness creation, commitment, and showcasing inclusive behavior.

Prioritizing Diversity, Equity, and Inclusivity has proven to be beneficial for businesses in more ways than one. In today’s competitive business landscape, how can focusing on DEI help businesses acquire and retain talent? 

Companies pursue diversity, equity, and inclusion (DEI) for various reasons. However, there are four significant reasons why firms opt for DEI. The first is business care, where a diverse workforce benefits the business. For example, Nike and PepsiCo created swimwear for people with disabilities and shoes, respectively, due to their diverse backgrounds and ideas. The second reason is the talent case, where organizations hire second-career women to build sustainable businesses. These women bring maturity and problem-solving capabilities due to their different life stages. The third reason is the culture case, where diverse perspectives create a strong, compassionate, empathetic, and accepting environment. The fourth reason is the social justice case, where bringing more women into the workplace is necessary to correct past mistakes and create an equal playing field for all. These four reasons are all beneficial to organizations, and they contribute to a more inclusive and effective workplace.

What specific DEI frameworks can organizations implement to enhance their talent acquisition processes? How can organizations measure the effectiveness of their DEI-integrated talent acquisition strategies?

DEI is a long-standing principle in India, with trans men and trans women playing significant roles in Indian culture and literature. However, implementing DEI in the workplace is a recent phenomenon, with organizations like Avtar pioneering this in the Indian workplace.

Effective frameworks for implementing DEI include the International Standards Organization (ISO) framework or the ISO 30415, which emphasizes quality and standards in talent acquisition, HR systems, and employee engagement. The Diversity, Equity, and Inclusion Maturity Curve (DIMC) is another framework created by Avtar, which segments organizations based on their DEI maturity level. This helps companies apply DEI to their company, considering their unique circumstances and situations, without comparing themselves to large multinationals or IT companies. The D-E-I-M-C measurement skills are recommended for aligning DEI goals with sustainable talent acquisition. However, aligning DEI goals with sustainable talent acquisition can be challenging for more companies, as they may need to adapt to different circumstances and situations.

What challenges do companies face when aligning DEI goals with sustainable talent acquisition efforts? How can training programs for recruiters emphasize the importance of DEI?

Diversity in the workplace is essential for a company's success. A diverse workplace should include a mix of people from various backgrounds, including young, old, men, women, people with disabilities, queer, mothers, single, arts, and engineers. Talent acquisition folks play a crucial role in ensuring this diversity exists.

However, challenges arise when hiring diverse candidates. Talent acquisition people often struggle to find candidates with fitness to purpose, which is the ability to do the job. This can lead to more rigorous and challenging hiring processes.

Another barrier is the lack of people with all the capability and talent, which can hinder the DEI efforts. Non-conscious biases, which are inherent in all humans, can also hinder DEI efforts. To address this, talent acquisition professionals can receive non-conscious bias training, role plays, psychodrama, and exposure to real-life situations.

By addressing these challenges, companies can create a more inclusive and diverse workplace. By recognizing and addressing these biases, talent acquisition professionals can better navigate the challenges and ensure that they are hiring individuals who are truly diverse and capable of fulfilling their roles.

What best practices have successful organizations adopted to combine DEI initiatives with their talent acquisition strategies, and how can mentorship support these efforts?

In order to classify a successful company, look for surveys or studies by Avtar and Seramount on the Best Companies for Women in India and the Most Inclusive Companies Index. The companies listed in the study follow best practices such as inclusive job descriptions, mentorship of diverse candidates, professional development for people from different backgrounds, and career advancement programs for women, people with disabilities, and those who have taken breaks in their careers. Today, 100% of the Top 10 and 84% of the Best Companies for Women in India have programs for returning women. These best practices are learned from each other, and the annual Best of the Best conference brings together these companies to share and learn from each other.

How can MSMEs and SMEs effectively implement DEI initiatives despite limited resources?

Creating a diverse, equitable, and inclusive workplace doesn't require significant budgets or elaborate policies. 90% of micro and small industries don't even have a POSH policy. To create an equitable workplace, companies can focus on awareness creation, building belongingness, commitment to inclusion, and demonstrating inclusive behavior.

The A, B, C, and D of DEI, which include Awareness creation, Building belongingness, Commitment to inclusion, and Demonstrating inclusive behavior, can be achieved without significant investment. By adopting DEI, MSMEs can avoid regrettable attrition, retain employees, increase productivity, scale, create new ideas, and become culturally adaptive. This approach can lead to numerous benefits for micro and small businesses.

What strategies can MSMEs and SMEs use to attract diverse talent in a competitive job market?

Small and medium businesses contribute to almost 70% of jobs in India, making it crucial to focus on diversity, equity and inclusion. A free market allows anyone to compete with anyone, regardless of their appetite. However, small organizations may struggle to compete with large corporations due to limited budgets and exotic policies. Diversity can be a savior for micro and small organizations, as it allows disadvantaged individuals like second-career women and people with disabilities to compete on an equal footing. Trust is also a key factor in a small company, as it builds trust and allows employees to share their feelings and experiences.

India is no stranger to diversity and inclusive ethos, but corporates have only recently begun adopting this in a structured way. In industries like IT, banking, and financial services, having a diverse, equitable, and inclusive policy is essential for survival. Inclusive leadership is the crucial differentiator, as it helps attract the best talent for jobs. As per the 2024 Avtar & Seramount Best Companies for Women in India, Women’s workforce participation in India has steadily increased from 25% at the time of launching the study in 2016 to 37%this year. Said that, many organizations continue to struggle achieving this level of participation.

To be an inclusive leader, one must be thoroughly convinced, putting themselves through the discomfort of vulnerability, accepting feedback, and admitting mistakes. By having more inclusive leaders, India can become a country that has developed significantly due to diversity.