Transparency is key to inclusive employment and government integrity

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum. Author: Silvina Moschini, Co-founder, TransparentBusiness, Inc.

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Digital transformation, or more precisely The Fourth Industrial Revolution, has inspired tremendous advances in business and government, and has created significant advancement opportunities for both sectors. It is transforming every aspect of both the global economy and cultures worldwide, and can become a critical tool for governments to prevent corruption.

“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work and relate to one another”, World Economic Forum Founder and Executive Chairman Klaus Schwab told Foreign Affairs Magazine in 2015.

“In its scale, scope and complexity, the transformation will be unlike anything humankind has experienced before.”

With the global workforce, this revolution can and should be the driving force behind increasing inclusion for women, as well as veterans and people with disabilities. There are truly talented people who currently cannot enter the workforce for reasons beyond their control, and can only contribute remotely.

The Future of Jobs Report 2016 concluded with a statement that’s even more relevant three years later. “The moral case for gender equality has, in the most part, been won. The business and economic case is also increasingly understood. The Fourth Industrial Revolution now presents an unprecedented opportunity to place women’s equal participation in the workplace at the heart of preparations for the shifts to come.”

The value of incorporating more women and others into the workforce has been well documented. It has been consistently demonstrated that a more inclusive workforce will create stronger businesses, governments and economies. Studies have also shown greater access to talent brings increased productivity for both businesses and governments.

Mercer & Company’s widely cited 2015 report “Why Diversity Matters” found that companies in the top 25% for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians, and companies in the top 25% for gender diversity are 15% more likely to have financial returns above their respective industry medians.

But disappointingly, the pace of change has not come as fast one would expect with these findings. According to a 2018 follow-up report by Mercer:

“The 346 companies in our 2015 research (mostly based in the US and UK) have increased average gender representation on their executive teams only 2 percentage points, to 14%, and ethnic and cultural diversity by 1 percentage point, to 13%. What’s more, many companies are still uncertain as to how they can most effectively use I&D [inclusion and diversity] to support their growth and value creation goals.”

Given this, how do we create a more inclusive workforce so we can experience these benefits on a global scale? The answer comes from the force driving The Fourth Industrial Revolution – technology. It can generate the solution these companies are looking for, through the critical element of transparency.

Transparency is literally the currency that will create an effective and successful workforce that leverages talent across all genders, ethnicities and cultures. It’s also the link between corporations and government entities, and their ability to access the exact talent they need to achieve their business goals.

Why is transparency so critical? Simply put, transparency makes possible the three vital elements essential for a global inclusive workforce to be successful – trust, engagement and accountability. These three qualities enable an inclusive workforce to accelerate global economies and generate revenue.

As former SEC Chairman Luis Aguilar wrote in his 2014 Harvard Law School Forum article, “without transparency, it is difficult to have accountability”.

Transparency available through technology today means that any worker, no matter where they are located, is accountable for their work. Any company or government can easily verify their work, and know whether it’s getting the “product” it’s paying for.

Transparency also vastly increases collaboration among workers, raising engagement and productivity. In today’s world, technology enables people to work side by side, whether they are in the same room or 5,000 miles away. This was evident in an IBM global study of midmarket CEOs, which found that the importance of a more collaborative work environment with a higher level of openness and transparency as a top priority nearly doubled over a two-year period.

With increased accountability and collaboration comes greater trust, for both worker and employee. Over 82% of the respondents to the 2014 Edelman Global Trust Survey stated that to build trust, CEOs must be transparent. Transparency was rated above other trust-generating actions, such as telling the truth, engaging with employees, and being visible during challenging times.

Creating this environment through transparency sets the stage for creating a truly inclusive workforce that enables governments and businesses to access the exact talent they need, regardless of that talent’s location, gender or challenges.

But transparency is even more valuable to global society. It is the key tool for holding governments accountable to their taxpayers. It can reduce fraud and save money lost to overbilling – money that can be used to create new employment and education opportunities.

According to the Global Competitiveness Report 2015-2016: “corruption interferes with the allocation of resources to their most efficient uses and undermines growth in five main ways (citing three): it leads to a misallocation of human capital, because talent is incentivized to engage in rent-seeking activities rather than productive work; it results in loss of tax revenue; it pushes inappropriate public spending, because government officials are tempted to allocate expenditures less on the basis of promoting public welfare than on the opportunity they provide for extorting bribes”.

Addressing this critical issue is the focus of the Partnering Against Corruption Initiative (PACI), a cross-industry collaboration that has become the “leading business voice on anti-corruption and transparency”. The value that technology has brought to this effort cannot be understated: “PACI serves as the principal CEO-led platform in the global anti-corruption arena, building on the pillars of public-private cooperation, responsible leadership and technological advances”.

In the US, legislators in 30 states have introduced bills to make transparent verification of billable hours a requirement for government contractors. This will protect taxpayers’ money and accelerate digital transformation in the world of work, making it more flexible and inclusive.

Overall, it’s clear that technology is the driving force for transparency to promote integrity, reduce fraud and promote more inclusive work models.

As the International Monetary Fund’s June 2018 paper “The Long and Short of The Digital Revolution” states: “The gig economy is causing a reconsideration of rules: for example, what does it mean to be self-employed in the age of Uber? To minimize disruptions and maximize benefits, we should adapt policies on digital data and international taxation, labour policies and inequality, and education and competition to emerging realities”.

The future of work will be fuelled by transparency and inclusion. Advances in technology have made that certain. Instead of waiting for this to happen, it’s time to take advantage of the digital transformation to leverage the benefits for all of society, starting with women.