The benefits of diversity and inclusion in the workplace
Lisa Jobson is a specialist in talent management and management consulting and has extensive experience in supporting businesses to determine focus and the strategic importance of diversity.
Workplace diversity and inclusion is an increasing area of focus for many organizations, with more developing diversity strategies for effective success. In 2017, PwC’s Global Diversity and Inclusion Survey of business and human resource leaders found that 87% of respondents had stated diversity was an area of priority of focus for their organization. There are plenty of good reasons why businesses are focusing on the topic and training their workforces and leaders to be more inclusive, but some of the most significant are the benefits of diversity and inclusion in the workplace, of which there are many.
Benefit from a broader range of perspectives
By ensuring you have a diverse range of employees and leaders from different backgrounds within your team, your business will benefit from a broader range of perspectives, experiences, and opinions. This is crucial to being able to navigate tricky business challenges that impact many different types of people, as well as making sure business actions are properly critiqued by those with different viewpoints, thereby eliminating groupthink.
Recruit from a larger pool of talent
One of the greatest benefits of diversity and inclusion in the workplace affects recruitment. By eliminating discrimination and bias within hiring teams and the more senior levels of your organization, you will ensure bright candidates won’t get turned down by virtue of their gender, skin color, or other attributes, despite having great skills and experience. This means an increased number of high-quality candidates your business can choose from when hiring.
Having a reputation for being more diverse also means your company won’t be turned down by discerning candidates that are concerned about diversity and inclusion. A 2017 PwC survey of employees found that 45% of men and 54% of women researched prospective employers to see if they had diversity and inclusion policies, while 48% of men and 61% of women judged company leadership team diversity upon receiving a job offer. This number was higher in a 2018 Randstad study, which found 78% of employees valued equal workplaces, and these percentages are likely to grow as younger demographics enter the workforce: a 2015 PwC survey found 86% of millennial women considered workplace diversity and inclusion policies important.
Many businesses already understand the impact of diversity and inclusion on recruitment – a study by Glassdoor in 2017 found that 59% of hiring professionals thought poor investment into the approach harmed hiring efforts in their business.
Understand your customers better
Our society is incredibly diverse and all these people are active in the economy. However, a lack of workplace diversity and inclusion can lead to large groups of people not being represented due to a lack of understanding.
For example, in the UK, 13.9 million are disabled, and their spending power – the ‘Purple Pound’ – is worth £249 billion. Companies that understand and cater to disabled demographics can take advantage of this spending power, and the best way to do that is by hiring disabled people, of which only 3.7 million are employed. More importantly, this investment in hiring disabled individuals and catering for their needs is clearly beneficial on moral and ethical grounds, since it makes society work better for more people. This applies to any other underrepresented demographic.
Thankfully, this message is getting through to many businesses – 49% of those surveyed for LinkedIn’s 2018 Global Recruiting Trends report focused on diversity to improve customer representation.
Improve business innovation
Businesses that boast diverse workforces are finding their capacity for innovation is being boosted. A 2019 survey by the HR Research Institute found that 66% of organizations believe diversity enhances innovation, and 83% of employees surveyed for a 2013 Deloitte report felt their ability to innovate increased when they believed they were listened to and thought their organization was committed to and supportive of diversity. BCG’s 2017 Diversity and Innovation Survey found companies with above-average diversity scores reported higher innovation revenues (revenues from products released in the previous three years).
These results are unsurprising. By feeling included and considered, employees feel less stressed and are less likely to have negative emotions towards their employer, and a greater diversity of voices are heard throughout an organization – creating a melting pot of free-thinking that breeds blue-sky ideas.
Faster, better problem solving
Investing in diversity and inclusion has been shown to improve the speed of decision-making within teams. Research in 2017 found that cognitively diverse teams solved problems faster than those that were homogenous.
The quality of decisions made is also improved by diversity. A 2017 white paper by Cloverpop that diverse teams made decisions 60% faster than non-diverse teams, and that teams marked by age, gender, and geographic diversity made the right decision 87% of the time, compared to 58% for all-male teams.
Improve overall business performance
Diversity and inclusion also improve the general performance of a business. In 2012, a McKinsey study found that US companies with diverse executive boards had a 95% higher return on equity than those lacking diversity. In 2015, McKinsey found that the best-performing companies for gender diversity in management were 15% more likely to financially outperform the mean, and 35% more likely when it came to ethnic and racial managerial diversity.
Reports from the field concur that the benefits of diversity and inclusion are significant. The HR Research Institute’s 2019 survey saw 61% of respondents agree that diversity led to improved performance.
Improve your overall reputation
Diverse, inclusive companies make their employees feel welcomed and happy, and help society function more effectively and fairly. This approach can enhance your business’s reputation with customers, investors, and staff, bringing a whole raft of benefits, such as improved recruitment opportunities, business performance, and growth.
There are countless benefits to ensuring workplaces are diverse and inclusive. And the business case for DEI has never been so clear. Reach out to us today and find out how to take advantage of those benefits.