Abstract
Today’s rapidly changing world is able to totally restructure the workforce, and employers face severe challenges in workforce management. Diversity management has been a key issue among employers in reaching sustainable growth, employee satisfaction, and retention, talent acquisition. The importance of diversity management can be linked to long-term organizational strategies that will enhance positive corporate reputation and development. However, the term ‘diversity’ can be conceptualized differently and top executives today understand that an organization has to adapt.
The current paper observes and analyzes the Diversity and Inclusion statement of one of the most famous cosmetic brands, L’Oréal, and proposes practical recommendations for improving the diversity statement.
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Introduction
The strategy that could enhance the world reputation of the brand L’Oréal.
L’Oréal is undoubtedly one of the best-known cosmetic brands all over the world offering a wide range of products, both inexpensive and luxurious. The beauty brand was founded in 1909 by Eugene Schueller, a young graduate of the chemistry faculty with great joy in entrepreneurship (L’Oréal, 2019), and now has more than 63 million employees around the globe (D’Auzers, 2008). The company spends a big part of its income on Research and Development, which is a ground reason the company can be on the top of the list ahead of world-known cosmetic brands. The company is committed to producing goods for people of ‘all walks’ (L’Oréal 2019) and to achieve it the company aims to create a unique workplace where people of different ethnicity, social background, religion, gender, age, or disability can feel to be treated with respect and valued.
Inclusivity and diversity
The beauty flagman speaks out the promotion of diversity and inclusivity within the company and outside to be the core strategy for several years (L’Oréal, 2018). The diversity and inclusivity campaigns of 2017 could greatly affect the company’s development by increasing sales.
The company names its Diversity and Inclusivity statement as ‘People matter at L’Oréal’, which ideally represents ground strategies and aims. The diversity and Inclusivity statement, which is last updated in 2018, includes five subsections, i.e. Key figures, Strategy, Key examples, Top executive endorsement, and Partners.
The strategy which is called ‘People matter at L’Oréal’ is comprised of three main directions of diversity and inclusivity strategy, promoting more females in executive positions, welcoming people with various backgrounds, and enabling talents with disabilities to show their skills.
The key figures subsection presents that the promotion of women in each level of management has greatly improved in comparison to 2010, the share of female executives has increased by 10 percent, and a more than 20 percent increase in the share of females in global brand management positions (L’Oréal, 2019). Additionally, the gender pay gap has decreased dramatically over the past several years from a 10 to 2 percent gap. Moreover, payable parental leave in France for females comprises 20 weeks and 6 weeks for other partners.
On the diversity statement landing page, a visitor is encouraged to watch a short video explaining how they perceive diversity. This video, along with the videos, where top managers at L’Oréal share their views on diversity and inclusion, is informative and impressive. Top executives discuss what diversity represents in itself and its importance, and the implications of a diverse working team. At L’Oréal, it is important to take into account the uniqueness of representatives of each race, ethnicity, nationality, and culture. It is highlighted that a growing number of diversified groups of their consumers entails understanding the needs of those customers, and thus not only the diverse workplace a social responsibility but also important a key to business success.
On a separate Key examples page, a number of projects and initiatives implemented by the company are presented. Initiatives related to fostering mental health among women and support for minority groups, etc. These can be perceived as proof of the viability of the company’s diversity statement.
From the Diversity and Inclusivity report of L’Oréal, it is visible that the company pays high attention to previous lessons taken from its experience and shows the strong commitment of top executives to achieving a high level of diversity within the company.
Nature and purpose of diversity statements
As more and more business organizations come to understand that diversity, equity, and inclusion can significantly affect their long-term profits, they are promoting diversity in the workplace and trying to make the public know that they are committed to it. The purpose of a diversity statement is to consider the feelings of a company’s stakeholders. One of the core theories in diversity value in diversity or ‘optimistic’ (Triana, 2010) represents ways how diversity in a team can offer a wide range of options in making decisions and how sometimes values may replace negative effect disadvantages of homogenous teams. The Diversity and Inclusivity Statement of L’Oreal also represents the company’s strategy of including creativity, problem-solving, resource- acquisition, and marketing arguments. L’Oréal is selling its products all over the world, for women and men, young and old, with totally diverse audiences. The beauty brand’s most successful strategy was to engage a diverse team of personnel to better understand the needs and demands of its customers.
To be specific, there are more other reasons why diversity can create a competitive edge for L’Oréal. A diverse employee base can guarantee better customer service, composing a workforce that mirrors its diverse customer base can be fundamental in acquiring more market share. In comparison to homogeneous teams, a team consisting of diverse members can have the advantage of a broad range of information, fresh perspectives, and various approaches to solving problems. The wider expanse of experience and knowledge can improve critical analysis of an issue or a project, by applying different scenarios and introducing different points of view.
The statement of diversity and inclusion is important in many ways. It is a way to show that the company both cares for the customers and the employees it hires, and it strives to maintain social justice and give equal opportunities to everyone, who wants to work for it. It creates a company image and any incident involving non-compliance with its statement can become a dark spot on its reputation.
The diversity and inclusion statement is not legally binding; diversity in the workplace is the strategy a business chooses to implement. However, there has to be a question of whether diversity statements reveal legitimizing characteristics. It has to be asserted that diversity and inclusion policy becomes legitimate when there is evidence of compliance with the objectives set. In this case, the company has to create a favorable working environment for its diverse employee body, and there has to be zero tolerance for discrimination cases.
Critically analysis of the organization’s diversity statement
The long-term success of multinationals is achieved by embracing diversity and inclusivity
On the website, apart from the diversity and inclusion statement, L’Oréal publishes figures in support of its words. One of the important criteria for assessing the company's compliance with the inclusion policy is its transparency. Making data publicly available can show how much the company is committed to the fulfillment of its diversity objectives. According to numbers over the period, 2010-2018 greater percentage of women were promoted to top managing positions with higher indicators of career development, whereby the gender pay gap has decreased by five times, also more favorable conditions were created for parental leave, and people with disabilities. In addition, the company’s employee body is very diverse comprising over 158 nationalities.
As its objective to promote diversity and inclusiveness company highlights three strategies:
- Promoting more women to top managing positions
- Engaging people from every social, economic, and multicultural origin
- Recruiting people with different physical and mental disabilities
It can be stated that the main goals and aims of L’Oréal’s diversity and inclusivity statement as the followings:
- To represent a wide range of its stakeholders within the company’s internal staff, sales teams, recruitment, and overall corporate workflow
- To hardly penetrate sexual equity within the team by promoting more women in executive positions and enhancing policies regarding gender equality.
- To show up the company as a unique and innovative company recruiting and supporting personnel with disabilities.
- To develop and revive a truly diverse community at L’Oréal.
Generally, the company’s Diversity and Inclusivity statement clearly set what they strive for in order to diversify their team of employees, how they are doing it currently, and what initiatives are yet to come.
Diversity in people with disabilities
Employing people with disabilities matters in L’Oreal. The diversity statement successfully covers it and backs up with a number of initiatives. This can also be seen in figures. In 2017, L’Oréal employed 1177 people with disabilities. One of the initiatives endorsed by the senior management order to reveal the disability inclusion biannual Disability Initiative Trophies launched in 2008. The event hosts the company's subsidiaries from 60 countries to share success stories about disability inclusion projects.
Additionally, the importance of Disability Initiatives Trophies can be seen in that it strengthens the connection between the L’Oréal headquarters – where the International Diversity Team resides – and the company’s subsidiaries. Frequent exchange of information between different subsidiaries and headquarters in order to facilitate the initiative contributes to the connection of geographically dispersed companies. This unique link is of great importance to L’Oréal to ensure and further promote diversity and inclusion strategy worldwide. In summary, L’Oréal can enhance its disability agenda by encouraging its subsidiaries to collaborate in resolving an issue that is concerned to be correlated with business success by senior management.
It can be seen that L’Oreal is aimed to promote its intention to hire employees with disabilities and a number of initiatives have been proposed, including a broad range of social activities and internal practices (Heming, 2018). The company both hosts and participates in various forums and conferences concerning disability and diversity. In 2009 an exclusive training program for young talent with disabilities was established. It creates an opportunity for 12 people with a disability to work with specialists for six months to develop knowledge and skills (Heming, 2018).
Gender equality.
In 2018, L'Oreal was found to be the top gender-balanced company in Europe by Equileap (L’Oréal, 2018). This fact has to be highlighted in order to show that gender discrimination is by no means applicable to company policy. We have already mentioned that gender equality is one of the main strategies and aims of the L’Oréal over last several years and being at the top of the best companies in ensuring sexual equality shows the strengths and well implementation of the Diversity and Inclusion statement of the company.
Cases of discrimination.
Although diversity and inclusion statements do not have a legally binding effect, there has to be an underplaying obligation to comply with what they assert is important for them. Some deeper research on the company’s diversity policy revealed that there have been several cases related to racial and ethnic discrimination (Bennet, 2018; Samuel, 2009; Chrisafis, 2007). L’Oréal which asserts gender equality in all terms has been involved in the racial discrimination lawsuit of one of its top woman managers. As Amanda Johnson (Bennet, 2018) sues her former employer she alleges inappropriate treatment from her colleagues and her subsequent unjustified firing. Another case of racial discrimination involved barring black, Arab, and Asian women from its advertisements (Samuel,2009). According to the court ruling company’s actions were inappropriate and found guilty of discrimination against race and fined.
This type of issue can put the company’s commitment and inclusivity statement into question. However, despite the issues related to discrimination in the working place, there is significant evidence that the company is committed to its values and constantly takes action to promote diversity. Not only this is seen in numbers but also the acknowledgment of their endeavors in this relation by various awards it gets year to year.
What can be recommended
Diversity and inclusion statements should serve a purpose. For it to be an effective statement it has to have these elements: value, plausibility, and accountability. The terms ‘diversity’ and ‘inclusion’ seem to be used interchangeably. The former focuses on combining experiences and knowledge of people from different backgrounds, while the latter is defined as enabling them to work in an environment, where they can perform at their best and differences among people with various characteristics would work for their company’s benefit.
As much as the company asserts diversity in its workplace and that inclusion is a priority management policy, it should follow its objectives to achieve them. The dangers of empty discourse, and inconsistency between words and reality, have to be avoided when designing a diversity statement. It is desired that diversity statements be not generally descriptive but support the desired values. In this sense, it is recommended that more training and diversity awareness initiatives be organized for the staff.
In a dynamic, technology-driven world, with company stakeholders from diverse cultures in order to be innovative, a company has to develop new perspectives into diversity. There are examples of companies hiring felons, the example of AT&T or American Express; hiring women who have taken career breaks for different reasons by PayPal or Goldman Sachs, etc. It is suggested that L’Oreal be innovative and come up with new methods of introducing diversity within its organization.
Another way to improve diversity can be providing training in the language necessary for working for a company, as the company has subsidiaries in over 60 countries. This allows recruiting from a wider base of candidates. Language barriers should not be a reason for not considering a qualified candidate.
Companies that embrace diversity as one of their mission statements need to ensure that practices and policies are in place to stay compliant with state regulations. It has to be highlighted that an organization takes care of the impact of policies/practices on different groups of employees. One suggestion for L’Oreal is to establish a system of giving feedback with surveys and suggestion boxes in order to understand how the workers feel about those policies. This will enable them to further enhance existing practices. Both positive and negative feedback should be viewed as valuable. Any policy that is observed to be an obstruction or not helpful for an employee should be changed and adapted accordingly.
Moreover, putting written policies can be not enough; it has to be ensured that the non-written rules of the company are explained to all workers.
Conclusion
While it’s clear that diversity can be very beneficial to an organization, it’s essential that managers, as well as the employees in the organization, understand how to manage it for both their own benefit as well as that of the organization. The more an organization shows a clear commitment to supporting diversity and endorses the idea that diversity is an opportunity and not a problem (Triana, 2010), the less likely it is to have problems resulting from perceived discrimination at work. Clearly, L’Oreal has done immense work to contribute to the creation of diverse workplaces from top to bottom, taking into consideration factors like gender, disability, cultural/racial differences, etc.
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