Diversity and inclusion (D&I) can’t be all boardroom talk and no action, a tick-the-boxes initiative, or a program that only HR cares about. To be truly diverse and inclusive, organizations need to make D&I a core part of the culture. And not just because it’s the right thing to do—it also makes good business sense.
Diversity is what differentiates us (e.g., gender, sexual orientation, age, ethnicity, religion, disability). Inclusion means respecting and embracing these (and other) differences rather than simply tolerating them or paying them lip-service. As inclusion strategist Vernā Myers put it, “Diversity is being invited to the party; inclusion is being asked to dance.”
The benefits of D&I initiatives
In an organization, diversity and inclusion reflects the mission and practices that support a diverse and inclusive workplace. These are mainly focused on recruitment and programs that foster awareness and understanding.
Here are four ways that D&I can benefit the organization:
1. Reach a global customer base
Globalization has rapidly changed the way we do business. Communicating across continents, cultures, and time zones is the new norm. A team member who can speak the local language, address that buyer’s needs, and grow authentic relationships in their communities is a huge asset.
A Harvard Business Review study found that when at least one member of a team has traits in common with an end user, the entire team better understands the user. And a team with someone who shares a client’s ethnicity is 152% more likely to understand the client.
“Deloitte’s research, which included the findings of seven major research studies, showed that D&I enhances innovation by about 20%.”
2. Achieve higher returns
Investing in D&I can be one of your greatest competitive advantages. McKinsey’s report, Diversity Matters, examined data for 366 public companies across a range of industries in Canada, Latin America, the UK, and the US. They found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have better financial returns than their non-D&I industry competitors. And, companies in the top quartile for gender diversity are 15% more likely to have improved financial returns.
3. Find new ways to innovate
Employees with diverse backgrounds contribute different ideas and perspectives, which creates more disruptive and innovative environments. Deloitte’s research, which included the findings of seven major research studies, showed that D&I enhances innovation by about 20%.
Because a diverse and inclusive workforce can help ensure that products or services resonate with—and are respectful of—their customers’ cultures, organizations can also more confidently innovate in global markets.
4. Hire and retain top talent
Organizations may not realize that their hiring practices are unintentionally excluding applicants. And employee turnover is costly to employers and damaging to teams. So, how are organizations communicating their commitment to D&I to potential and existing talent?
LinkedIn’s Global Recruiting Trends 2018 study surveyed nearly 9,000 recruiters and hiring managers from 39 countries and found that:
- 52% use diverse employees in web and print materials
- 35% present diverse interview panels
- 30% talk about their employee resource groups (ERGs)
- 28% recruit at schools with diverse student bodies.
Taking a holistic approach
If organizations approach D&I solely as a strategic tactic, they’re setting themselves up for failure. But if the goal is to genuinely be more respectful and inclusive as an organization, the business advantages will come naturally.