Prioritizing DEI in the Year Ahead: Considerations for 2024
This piece was authored by several of Prosek's leading DEI experts. Josette, Marie, and Kearney are among a crucial team at the firm that's responsible for providing invaluable insight and counsel to clients who are navigating their companies' unique diversity, equity, and inclusion journeys.
It’s no secret that the DEI landscape has experienced significant obstacles over the past year. While the tangible business benefits of a diverse workforce are based in fact, companies have grappled with a difficult political climate as well as economic pullbacks. Despite these obstacles, we’re encouraged by our client portfolio, and by the clients with whom we work closely to authentically align their ethos with business objectives, and to communicate the value of diversity as an asset both within and outside of their organizations. When it comes to intentionally prioritizing DEI in the year ahead, here are a few considerations that are top of mind:
1. Parity at entry-level, but what about after that? McKinsey’s ‘The state of diversity in global private markets: 2023’ report found that despite nearly half (48%) of all entry-level roles in PE being held by women, they are still underrepresented in leadership positions, with only 20% representation in managing director roles. When it comes to race and ethnicity, these numbers are even less satisfactory—only 8% of managing directors are Black, and 9% are Hispanic.
There are ways to address this gap between entry and senior level positions, but it’s not a one-size-fits all method. Institutions should form creative recruitment pipelines such as partnering with organizations like SEO and the Toigo Foundation, and Historically Black Colleges and Universities (HBCUs) and Hispanic Serving Institutions (HSIs). They should also consider changing governance and board structures to address the DEI gaps within the ranks of their company. Ultimately, the changes needed to promote senior-level employees come from structural changes within an organization—and a shared commitment to not only implementing those changes, but also continually seeking out ways to prioritize DEI.
2. Create a pathway to be mirrored. While building clear pathways for promotion within an organization sets the stage for entry and mid-level employees to see exactly where they can land, doing this by example is even more powerful. Being able to see minorities and diverse leaders as MDs and in the C-suite provides a clear example for others to recognize that it’s possible for them, too. According to the McKinsey report, “Globally, men in investing roles are about 50% more likely, on average, to be promoted than their female colleagues.” So what does that say for what employees observe?
Leadership can repeatedly lay out what it takes to excel within a firm, but unless it’s shown by example, we’re only adding to the overcrowded discussions that tend to be much more talk than action. Creating transparent pathways for advancement and ensuring they are communicated clearly and consistently within organizations is key.
3. The political climate. In 2023 alone, we saw countless concerning headlines around diversity and inclusion: headlines about the reversal of affirmative action, the de-prioritization of DEI among American corporations, volatility on college campuses and in Congress around antisemitism, and more. Not to mention, we’ve been seeing many different debates and campaigns ahead of the 2024 the election year, which will only continue ramping up in the months ahead. Next year, it will be all the more important for organizations to remain steadfast in their commitment to DEI—to strengthen the company’s culture, bolster its success, and make a meaningful impact on society as a whole.
What's In Store for 2024
Despite the obstacles that lie ahead, with proper fundamentals, metrics and benchmarks in place, organizations can remain on track to achieve their DEI commitments and level up to accomplish new DEI ambitions in 2024. Next year, authentically communicating DEI strategies with key stakeholders – whether that be investors, shareholders, employees or customers – will be even more imperative. Organizations should also consider creating separate, but deeply integrated strategies for each of these key groups, and lay out clear tactics for implementing them throughout 2024 and beyond.
Next year, communicating DEI strategies with authenticity and ensuring these practices are embedded into business functions will remain critical. As client needs evolve – from diverse founders to Fortune 500 leaders – so, too, will their DEI strategies—and the importance of prioritizing DEI will be more palpable and pressing than ever before. At Prosek, we continue working with clients to build out authentic narratives and messaging, as well as conduct cultural X-Ray assessments to unlock opportunities for them to grow. Moreover, were looking forward to continuing to provide them with the DEI counsel and tailored communications strategies they need in order to truly succeed in the eyes of their employees, customers and relevant stakeholders in 2024 and beyond.