A wealth of research suggests that by embracing diversity and inclusion (D&I), companies can significantly enhance their performance and profitability. According to Deloitte, diverse organizations benefit from up to 2.3 times the cash flow of less diverse counterparts, while data from McKinsey & Company shows that companies in the top quartile in terms of gender-diverse executive teams average around 21 percent more profitability. McKinsey & Company also reported that companies with culturally and ethnically diverse executive teams are 33 percent more likely to boast industry-leading profitability.
While statistics published by Gartner suggest that inclusivity improves team performance by as much as 30 percent, just 40 percent of workers regard their managers as actively encouraging an inclusive working environment.
What is D&I?
Diversity is any dimension used to distinguish people and groups. Diversity appreciates uniqueness and respects differences in terms of race, gender, religion, age, sexual orientation, disability, education, national origin, and socio-economic background.
Diversity in the workplace enables people to explore these differences in a safe, nurturing environment. It rises above mere tolerance to actively value and celebrate individuality, imbuing a true appreciation of the myriad of dimensions different individuals bring to the workplace, placing positive value on building a diverse community.
To be inclusive, organizations must accept and welcome individuals and groups from different backgrounds, ensuring that all are treated equally. An inclusive company makes all of its employees feel respected and welcomed for who they are, engaging each individual on a personal level and nurturing them as a valuable part of the organization’s mission.
Cultivating D&I within a company requires consistency throughout the various organizational levels. Inclusive companies embrace diversity from the factory floor to the board of directors and everywhere in between.
According to Brené Brown, a TED speaker and research professor at the University of Houston, business leaders need to create real belonging in their culture. Within her organization, Brown has expanded the principles of D&I, implementing diversity, equity, inclusion, and belonging policies, explaining that to truly make an impact in terms of creating inclusive working environments, connection and belonging must go hand-in-hand.
The four layers of workplace diversity
D&I has a critical impact on business economics and imperatives. As author Dr. Edward E. Hubbard explains, diversity consists of four layers: workforce diversity, behavioral diversity, business diversity, and structural diversity.
According to Deloitte, companies are increasingly prioritizing diversity and inclusion as a business strategy rather than as a way to tick the boxes to meet compliance obligations. Nevertheless, according to Deloitte’s global survey, a third of companies continue to lag in terms of diversifying workplace cultures.
Promoting D&I and successfully executing it within an organization are two separate things. Just 1 in 5 companies surveyed by Deloitte reported that their organization was fully prepared to address the issue of workplace diversity. Despite this, a growing body of evidence underlines the importance of D&I, showing that it benefits companies in a variety of different ways.
The benefits of prioritizing D&I in company culture
By bringing a variety of different viewpoints and experiences to the boardroom table, companies expand their overall reach, enabling them to connect with a wider audience of customers.
We live in a diverse world, and yet, as of 2020, 85 percent of Fortune 500 CEO positions were held by white males. Diverse companies benefit from diverse thinking, enabling them to best serve a diverse customer base. Irrespective of industry, a company’s customer base encompasses individuals from a variety of different races, religions, and socio-economic backgrounds. The more diverse a team is, the more able they are to connect with a wide customer base, allowing them to empathize and take customer requests seriously, which, in turn, builds the company’s profile and brand.
Within teams, diversity breeds creativity and innovation, making organizations more dynamic and ready for change. By building a diverse team and supporting collaboration and brainstorming, organizations encourage the sharing of ideas, which culminates in the creation of exciting new concepts or innovative solutions to existing problems.
Diversity helps improve employee engagement, an important goal for any company. Engaged workers are more productive. According to Deloitte, 83 percent of millennials employed by companies harboring an inclusive work culture report feeling actively engaged with that organization.
Boosting workforce diversity creates teams that benefit from a variety of different competencies, enabling team members to learn from each other, continuously broaden their skills, and work together to solve problems faster.
Diversity embraces and celebrates uniqueness. Workers who feel valued for their individuality benefit from enhanced work satisfaction and feel a sense of belonging within their team. This not only makes them more likely to stay with that company, but it spurs them to be vociferous advocates for it, enhancing its public profile.
Creating a diverse working environment has a multitude of benefits for companies in terms of enhancing relationships with both employees and clients as well as boosting public perception and, ultimately, increasing the company’s profitability.