5 Reasons Why Diversity, Equity & Inclusion are Essential to Organizational Success
Diversity, equity, and inclusion make up more than just a “movement du jour” in business. They’re part of a groundbreaking societal (and regulatory) transformation that will permanently affect corporate culture and operations.
What is DEI?
Diversity is the understanding and accepting of differences within a setting. In the workplace, that might include differences in race, ethnicity, gender identity, sexual orientation, age, religious beliefs, special needs, or socioeconomic class. Equity is the act of ensuring that processes and programs are fair and impartial for all individuals. Inclusion is ensuring that all employees feel comfortable and a sense of belonging in their workplace ; an inclusive work environment should be supportive, collaborative, and respectful towards everyone.
DEI has become a significant organizational initiative across different industries. Once a relatively overlooked consideration, research and surveys show that diversity, equity and inclusion hold a number of important benefits to organizations and their employees.
A survey by Deloitte, for instance, compares millennial views on DEI with those of non-millennials: “With millennials, the most traditionally diverse, digitally connected, and socially-minded group of professionals, set to comprise nearly 75 percent of the workforce by 2025, we believe this research is critical to informing and elevating the inclusion conversations taking place across corporate America.”
So what are the real advantages of incorporating DEI initiatives on a company-wide basis? Here are five that a company interested in compliance can’t afford to ignore.
Better company reputation
As more organizations adopt new and varied diversity, equity and inclusion initiatives, it’s becoming increasingly common for employees to take DEI into consideration when looking at their next career moves. As your reputation grows, your commitment to DEI will reap long-term benefits by both attracting and retaining top talent.
In a similar vein, by actively seeking to add diversity to your workforce, you are searching within a wider talent pool – which promises a greater range of skills and perspectives across the board.
According to Laura Wronski, a research science manager at SurveyMonkey, “Workers who are satisfied with their company’s efforts on [DEI] issues are actually happier with their jobs. They are more likely than others to say that they have good opportunities to advance their careers, and they are more likely to feel like they are paid well for the work they do.” Of course, employees that feel valued are happier – which makes them more productive and your organization more likely to retain them.
On the other hand? According to the Harvard Business Review, employees who perceive bias in their workplace – and yes, the focus was on the perception of bias – were more likely to disengage and leave their jobs. This seems pretty reasonable when you think about it. So keep your staff smiling with good DEI initiatives in place!
According to ’Diversity wins: How inclusion matters’, a 2019 report conducted by McKinsey & Company, “The most diverse companies are now more likely than ever to outperform less diverse peers on profitability”. In fact, a study of over 500 companies found that every 1% increase in just gender and racial diversity correlates with a 3% to 9% increase in sales revenue.
Yet another study, conducted in partnership with The Society for Human Research Management, found that companies that showcase gender and ethnic diversity are, respectively, 15% and 35% more likely to outperform less diverse peers.
The list of studies goes on, but DEI seems to have a notable impact on performance when implemented correctly.
Better customer and vendor relationships
As your team becomes more diversified and inclusive, you’ll find the advantages extend to your customer and third-party vendor relationships, too. The more diverse your team is in gender, race, experiences, and attitudes, the more opportunities for relationship-building you’ll see with different types of clients and vendors.
Better perception of innovation (which drives employee engagement)
The link between DEI and a perceived culture of innovation has been proven through extensive research. According to Deloitte, 74% of millennials believe their organization fosters innovation when an inclusive culture exists.
This may tie back to our earlier point about having happier employees too; the same study found that 83% of millennials are actively engaged when they believe the organization is fostering an inclusive culture, while only 60% are engaged when they believe it does not.
DEI is driving more hiring (and jobseeker interest)
Another impact of diversity, equity, and inclusion? Being actively engaged with DEI and associated compliance needs is mandating that corporations create new positions within their organizations. In fact, according to Glassdoor, the hiring demand for DEI roles in the UK increased by 106% between 2018 and 2019.
This was matched by an increase in job seeker interest too, with searches up 35% in the U.S. and 19% in the U.K. during the same time period.
The net-net of all of the above? By embracing DEI, organizations will be able to nurture and retain happier workforces, avoid reputational damage (and regulatory and legal challenges), and even improve their competitive position in the eyes of customers who are looking for DEI-compliant vendors and partners.