Launch of Study

Diversity Management and Pluralism in Kenya’s Major Private Sector Firms

23rd March 2018, Sarova Panafric Hotel,

Nairobi

Introduction•  Changing demographics in workforce - Increasing global

appreciation for the economic benefits of workforce diversity

•  From diverse workplaces, to ensuring pluralism

•  Ability of individuals/groups to access opportunities for livelihood & well-being

•  Sector potential to wield influence on the actions and perceptions of a society

Private Sector

•  Expanding economic opportunity is arguably where players in the Kenyan private sector have the greatest potential to create shared value for business and society.

•  Business activities by the private sector generate jobs and build human capital with multiplier effects on the social and economic development of people

•  Supported by responsible business practices and policy innovations, the private sector can make major contributions to the realization of diversity and pluralism in workplaces even as they pursue core business interests

Policies and Regulations on DiversityArticle 27 (5), COK

•  “a person shall not discriminate directly or indirectly against another person on the basis of race, sex, marital status, pregnancy, health status, ethnic or social origin, colour, age, disability, religion, conscience, belief, culture, language or birth.”

Employment Act 2007 “an employer shall promote equal opportunity in employment and strive to

eliminate discrimination in any employment policy or practice”.

Labour Relations Act, 2007 •  Protection of employees - “no person shall discriminate against an employee

or any person seeking employment for exercising any right conferred in the Act.”

Study Objectives

Establish the status of pluralism in the private sector in Kenya by examining;

•  Efforts by players aimed at promoting diversity & pluralism;

•  Extent to which the sector has embraced or resisted efforts towards diversity;

•  Challenges of dealing with diversity issues & pluralism;

•  Regulatory framework around diversity;

•  Pro-activeness of sector in creating diversity policies;

Why companies listed in NSE?

•  They are among key contributors to Kenya’s economic output

•  Are viewed as those adhering to best practices of corporate management

•  Are an appropriate universe for testing both how Kenyan private corporations approach diversity and pluralism, as well as their views on the value of pluralism

Methodology

•  Phase one. Review of academic literature on workplace diversity and pluralism

•  Phase two. KIIs and FGDs

•  Phase three. Administration of questionnaires to HRMs

Preliminary findings

•  Understanding of pluralism and diversity among companies involved in the study is heavily influenced by the politics and human rights rhetoric

•  There appears to be a significant reluctance by firms to discuss diversity openly - Strong connections to the ethnic politics

•  Few companies have embedded diversity as a major element of their HR policies and are not able to connect it to their firm’s performance

•  Companies are placing more emphasis on charitable giving and CSR than internal diversity

•  There is a deliberate attempt to incorporate women in boards but the numbers are still below half

Interpretation of diversity and nature of diversity management

•  Some organizations have defined diversity in their HR policies and procedure manuals

•  Organizations that do not have written policies on diversity management do not tolerate discrimination based on differences among staff.

Human Resources Managers training on diversity management

57%

43% Trained on Diversity (Undergraduate/Graduate)

Not trained on diversity

Initiators and handles of diversity issues

0% 20% 40% 60% 80%

HRM

Top/Senior Management

Workers Committee

Managing Director

Line/Departmental Mangers

Workers

Declined to answer

Chief Operating Officer

Board of Directors

Gender Officer

Anyone

Learning & Development

Handleddiversityissues Ini0ateddiversityconcerns

Whether companies have a budget geared towards diversity concerns

Support to legislation on diversity •  50% of the respondents indicated that their companies

supported legislation touching on diversity

•  Done through lobbying and advocacy actions through their respective umbrella bodies

•  33% companies without written policies, regulations or guidelines on diversity

•  63% companies without written policies, regulations or guidelines on diversity

•  .

Companies with policies, regulations or guidelines on diversity

63%

33%

Companies with written regulations/policies or guidelibes on diversity

Companies without written regulations/policies or guidelines on diversity

Company policies & regulations on diversity

•  Compliance by private sector organizations to legislation on diversity rated as moderate

•  Embracing diversity into the regulators and private sector regulations and policies remains a challenge and interpretation of the law is left to firms

•  Laws aimed at promoting diversity require repealing e.g. the requirement for progressive implementation of regulations around inclusion of persons with disability

•  Observation – PWD Act of 2013 is not/rarely complied with, by some organizations and regulators in the sector.

Company policies and regulations on diversity

•  CMA developed a Corporate Governance Code that was gazetted in 2016. One of the principles in the proposed codes of conduct.

‘the board shall have a policy to ensure the achievement of diversity in its composition. Each board shall consider whether its size, diversity and demographics make it effective. Diversity applies to academic qualifications, technical expertise, relevant industry knowledge, experience, nationality, age, race and gender. The appointment of members shall be gender sensitive and shall not be perceived to represent a single or narrow constituency interest. Where companies establish a diversity policy, the companies shall introduce appropriate measures to ensure that the policy is implemented’. CMA Code

Company policies and regulations on diversity •  Are part of the organization’s HRM manuals and other workplace

policies

•  Policies provide for the code of conduct for employees, equal opportunity employment, provisions on inclusion, respect, dignity and teamwork, non-discrimination clauses, gender and disability mainstreaming, provision of crèches as well as the consequences of breaching these policies

•  70% of the respondents shared that their company policies were implemented

•  Most businesses and regulators do not have the tools or skills to measure diversity levels in their businesses

Compliance with policies and regulations on diversity – HRM Response

55% 12%

33%

Regulations and legislation cpmlied with

Regulations and legislation not cpmlied with

Others

Dimensions of diversity considered when recruiting for board and top management positions

11%

12%

15%

32%

43%

45%

51%

62%

67%

93%

97%

Race

Political Affiliation

Religion

Ethnicity

Disability

Network

Nationality

Age

Gender

Education

Professionalism

Primary Dimensions

Secondary Dimensions

Challenges in attaining diversity

•  Inconsistency between organizational policy and practice

•  Institutional inertia and poor response to change

•  Cost of implementing initiatives geared at ensuring diversity

•  Cosmetic initiatives geared at tolerance or simply compliance with existing regulations

•  Industry norms - construction related and automotive industries often male dominated

•  Opposition to change and negative attitude and behaviors (prejudice ,stereotyping)

Challenges in attaining diversity

•  Lack of prioritization of diversity - poor awareness on the benefits of diversity & pluralism

•  Family and/or majority shareholder interests in the composition of boards & top managements

•  Recruitment based on networks

•  External interests - politics and cronyism

•  Outright bias such as the glass ceiling effect

•  Lack of commitment from organization boards or top management and organization leadership

Challenges in attaining diversity

•  Weak regulatory framework and law enforcement

•  Semi-transparent recruitment processes based on board members’ preferences

•  Nature and location of some of the jobs

•  Lack of gender mainstreaming policies and non implementation

Challenges in attaining diversity

Regulators not sufficiently empowered to hold to account companies that are engaging in discriminatory practices

“In one of our audits we found out that all top management

staff are men and such organizations had gender and wage disparities but my organization could not do anything much since we do not have the power to compel private sector firms to ensure gender equity. All we can do is to ask them to declare that they have a board composed of x members.”

FGD Participant

Challenges faced by organizations while implementing diversity initiatives in Kenya

27%

15%

12%

7%

5%

2%

22%

10%

Lack of understanding of diversity/Lack of expertise/bias in appraissals

Poor regulations/hinderance by the laws e.g. immigration laws

Traditiions and culture interferance/resistance to change

Nepotism/Family interest/tribalism

Corruption/Political interferance

High cost of implementation/Training

Difficulty in balancing between profitability motive of companies and diversity

Nature and geography of the business

Whether there is a business case for diversity

72%

78%

79%

81%

83%

87%

88%

88%

Reduced costs associated with low productivity

Improved problem solving

Decrease in complaints and litigation

Improved access to minority and new markets

Improved financial performance

Retention of diverse workforce

Improved public image of the organization

Increased organizational competitiveness

Role of private sector in national cohesion - opinion of sector players

•  Sector has a role in building a cohesive nation Sector should: •  Through share of employment opportunities ensure diversity during recruitment of

employees •  Champion campaigns against discrimination, set standards & provide objective ideas

on diversity management

•  Use profits to finance cohesion related activities

•  Exert pressure on the Government to account on issues to do with diversity, & foster National dialogue and policies on diversity management

Diversity in dealing with suppliers•  Promotion of diversity in the supply chain is informed by: -  changing competition as rival organizations compete for

market share, and major companies that once sold to homogeneous customer bases now sell to diverse markets with multiple segments

-  Working with the right suppliers can make a big difference in the operation of the value chain, as well as the company’s standing with its local community and workforce

-  Global brands are increasingly recognizing the strong potential for supplier diversity programs to help them grow their businesses whether through increased market share among emerging customer bases, stronger share price, faster innovation cycles or more intangible measures such as brand awareness and loyalty (Dun & Bradstreet).

Diversity in dealing with suppliers

“….would like to support businesses in Kenya but the

corruption and the demand for bribes has forced us to import supplies that we could have easily obtained locally. Also, various businesses have difficulty in meeting the standards required for the various products hence a business may be forced to work with the one supplier who can”.

FGD Participant

Diversity in dealing with suppliers

“Some organizations choose to work with us, large

service providers over small businesses because of our robust systems of accountability and ethics”.

FGD Participant

Recommendations Platform for organization transformation

•  Communicate company imperatives for the culture change towards embracing diversity

•  Sensitize players on diversity, pluralism and the benefits on the workforce and businesses

•  Hold regular dialogue platforms on diversity and pluralism among stakeholders in the sector including the regulators.

•  Dismantle barriers established by networks in the recruitment process.

Recommendations Establish competencies to guide and manage a

diverse workforce

•  Train HRM on diversity management, pluralism & monitoring the results of initiatives

•  Raise awareness and train staff on dimensions of diversity & pluralism

•  Establish organization leadership and management practices that model inclusive behaviour practices and leveraging diversity.

•  Ensure that strategies for recruitment balance meritocracy and attainment of diversity at the workplace.

Recommendations Enabling policies and strategies

•  Making work spaces accessible to PWDs

•  Support networks for new recruits to minimize isolation

•  Develop, adopt and implement clear strategies and formal policies that promote diversity & pluralism

•  Budget for implementation & monitoring diversity initiatives

•  Develop and enforce policies that promote diversity.

Recommendations Adherence to legislation and regulations on diversity

•  Develop a matrix that can be used to measure diversity in firms

•  Strengthen sector regulator’s capacity to effectively supervise and coordinate diversity management

•  Strengthen the International Organization of Standardization certification process in the country by including diversity and pluralism principles

•  Put in place standardized monitoring and reporting mechanisms on diversity

 

Recommendations Leverage a diverse workforce

•  Ensure top organization leadership and management commitment and accountability to ensuring diversity.

•  Needs assessment of the employees, jobs and the organization to identify diversity issues for appropriate interventions.

•  Establish metrics and evaluate the effectiveness of diversity initiatives

•  Have diversity management at the core of human resource practices and policies.

END