Business Case
The business case for diversity, equity & inclusion in general is strong and well known – according to McKinsey's reports ‘Diversity Wins’ (2020) and 'Diversity Matters Even More' (2023) the most diverse companies are now more likely than ever to outperform less diverse peers on profitability. In the case of ethnic and cultural diversity, top-quartile companies outperformed those in the fourth one by 39% in profitability. In fact, the likelihood of outperformance is higher for diversity in ethnicity than for gender.
The top reason for increased profitability from diverse teams (and specifically, diverse leadership teams) seems to be innovation. Companies with above-average diversity on their leadership teams report a greater payoff from innovation and higher EBIT margins, with nearly half the revenue of companies with more diverse leadership coming from products and services launched in the past three years. Even more persuasive, companies can start generating gains with relatively small changes in the makeup of their senior teams (Lorenzo, Rocio et al., 2018). Alongside being innovative, diverse teams are smarter – they focus more on facts and can process those facts more carefully (Rock & Grant, 2016).
Why should we focus on Māori and Pasifika employees specifically?
According to official population projections, by 2043, 21% of the country’s employment base will be Māori, and 11% will be Pasifika.
(Stats NZ, 2022)
The skills and leadership experience gained through community service contributions are untapped or unrecognised by employers.
(Ministry for Pacific Peoples, 2021)
Between 2013 and 2018, the working age population for the whole country grew by only 10%, but for both Māori and Pasifika there was 32% growth.
(Stats NZ, 2018)
Research shows that unfair Māori and Pasifika pay gaps persist, even with the same levels of education and types of occupation.
(Cochrane & Pacheco, 2022)
Between 2013-2018, the number of Māori and Pasifika in employment grew by 47% and 57% respectively, which is nearly triple the rate of NZ Europeans.
(Stats NZ, 2018)
For Pasifika, this entrenches a historical wealth gap: the median Pasifika net worth was only $16,000 in 2021 compared with the European median of $151,000.
(Stats NZ, 2021)
While we can acknowledge that diversity, equity and inclusion in general is good for business, and organisations know that supporting employees is the ‘right thing to do’, we have obligations beyond that to specifically support, uplift, and work in partnership with Māori employees as part of our obligations under Te Tiriti o Waitangi. Employers have a responsibility to uphold Te Tiriti in their workplace and ensure they are working with Māori as tangata whenua in a meaningful, authentic and enduring way.
This includes supporting and uplifting Māori employees and ensuring they have a voice in the organisation. Employers should create an environment where all employees feel safe, respected and valued, and their cultural needs are understood and upheld. They should also provide opportunities for Māori employees to reach their full potential.
Meanwhile, Pasifika in Aotearoa New Zealand have long enriched the economy, society and culture of Aotearoa New Zealand, having played a hugely important role in developing the country’s post-war economy with their collective labours, but without benefiting equally from national prosperity.
Inequality and low pay for Pasifika communities risks becoming entrenched, removing true equality of opportunity and potentially wasting the talents and skills of a generation.
Alongside being the right thing to do, there are many economic reasons for authentically engaging and supporting Māori and Pasifika talent. It makes good commercial sense to build skills in engaging what will be a huge chunk of Aotearoa’s future workforce.
Implementing policies that specifically meet Māori and Pasifika needs rather than maintaining inequitable barriers to their recruitment and progression will build loyalty, increasing retention and greater wellbeing and employee engagement. The Māori and Pasifika populations are young and growing. Investing properly now in connecting to and progressing Māori and Pasifika talent will unleash untapped and overlooked skills and will be a boost for our future economy.
Achieving social mobility for Māori and Pasifika will help alleviate New Zealand’s inequality crisis and help create a sustainable and inclusive economy. It will also mean better representation of customers, stakeholders and communities within organisations and differentiate organisations as uniquely Aotearoa New Zealand, with potential huge PR advantages.
Māori and Pasifika are a growing presence as prime movers and partners in the economy, including the social economy, that can effectively support the workforce. The Māori economy has grown in value from $42.6b in 2013 to $68.7b in 2018 (BERL, 2021).
This economy is vibrant and increasingly diverse, and there is increased recognition that mātauranga Māori can provide unique and innovative ways of thinking and doing things. The growing Pasifika economy is characterised not only by businesses, but also by the strong presence and potential of social and community-based enterprises and non-profits, together representing $8.4b in assets (The Treasury, 2018).
With the rise of the Māori and Pasifika economies comes increased expectations across Aotearoa New Zealand that being a partner in that success needs some cultural competency and demonstrated commitment to Te Tiriti o Waitangi.
The GEM is an opportunity for employers to live their values through practical steps and guidance and to have their efforts recognised. The upsides are plentiful: establishing a reputation for attracting and nurturing Māori and Pasifika talent, understanding diversity, and supporting brand power, good public relations, attracting and retaining good talent and creating long-term, sustainable and inclusive benefits for economic prosperity for Aotearoa New Zealand.