The way companies consider their employees has changed. It’s essential that business leaders consider the benefits of diversity, equity, and inclusion. Why? Because organizations in the top quartile of ethnic and cultural diversity are 36 percent more likely to experience above-average profitability than peers.
Diversity, equity, and inclusion are no longer considered “nice to haves”—especially during these uncertain times. In the past decade we’ve made great strides in the evolution of diversity in the workplace and in promoting inclusivity. Economic instability can’t mean that organizations now regress.
More than that, when discussing the benefits of diversity, equity, and inclusion in the workplace, it must come from the right place. These aren’t cynical business benefits, built with an eye on profit margins and marketable branding. These are benefits that reach beyond the workplace, with the promise of enacting social change through better business practices.
Most importantly, there are no quick fixes when it comes to diversity, equity, and inclusion. That’s why a deep and nuanced understanding of what constitutes diversity in the workplace is integral.
What is Diversity in the Workplace?
When we define diversity in the workplace, we have to recognize that the parameters are ever-shifting. Even definitions from a decade ago would feel outdated now. No matter your sector, you can’t afford to be rigid.
So, what do we mean when we talk about a diverse workforce? Predominantly we’re advocating for workplaces made up of employees with a wide range of different viewpoints, reflecting perspectives outside of the de facto white male gaze.
Where once this was taken to refer specifically to culture and race, we now equally consider a greater number of factors, including, but far from limited to:
- Physical ability
- Sexual orientation
- Religious beliefs
Even as definitions continue to shift, so long as you keep in mind the value of differing worldviews, your business will always benefit.
Why is Diversity, Equity, and Inclusion Important?
Put simply, diversity, equity, and inclusion is important because people deserve better. Your employees aren’t a facet of your business—they are your business. Providing a more rounded, more inclusive culture for your employees is an essential first step in improving overall employee engagement.
The Benefits of Diversity, Equity & Inclusion
The benefits of diversity, equity and inclusion can be found everywhere. Given the impact of the Black Lives Matter movement in 2020, and the criticism faced by organizations depending on their ensuing stance, it seems clear that conversations around DE&I are only going to become more crucial.
1. Directly Tackling Racism and Prejudice
When considering business benefits, too often people start from an economic standpoint. Instead, we should start from a social one. That’s why the most important benefit of diversity and inclusion is also the most obvious: by creating an actively inclusive workplace, you’ll also create room for productive dialogues in tackling prejudice throughout your workforce.
Business decisions in the past and present have been deliberately made to exclude and discriminate. That’s why leadership teams are often predominantly white, and why workplaces are frequently inadequate when it comes to accessibility. To fully rectify this, we must be purposeful with our decisions now, prioritizing inclusion along the way.
2. An Increase in Employee Satisfaction
At Peakon, a Workday company we understand the benefits of employee satisfaction. Employee disengagement costs companies dearly every year—up to $550 billion a year. Having staff who feel as if their voices are well represented—both at an individual and corporate level—naturally leads to increased job satisfaction.
3. Stronger, More Consistent Employee Performance
Staff who feel engaged at the workplace perform much more strongly: that’s a fact. So much of what makes diversity, equity and inclusion integral is fostering a sense of belonging. In fact, a report by Forrester found that workplace belonging leads to a 56% increase in job performance. It’s only natural that employees who feel heard and respected perform more strongly.
4. Greater Diversification of Skills and Creativity
Historically, the Western artistic canon has been dominated by white cis-gendered males—the removal of such gatekeeping has nurtured a much more varied and rich tapestry of international art. The same applies at a corporate level. For your business to evolve it needs talent that doesn’t come from a narrow remit, enabling different worldviews and skills to clash and conjoin to create something new. That’s where true creativity blossoms.
5. Higher Prospects for Innovation
That blossoming creativity in turn leads to greater innovation across the board. How can a business be expected to adapt and react to globalization if its genetic make-up is monocultural? If you want to be a thought leader, you need to be considerate of thoughts from a wide range of backgrounds, and reflect that in your company policy.
6. A Wider, More Global Impact
With a diverse range of employee voices, not only can you break down international language barriers, you also gain insights into the ways in which people think across the world. No business is truly local anymore, and companies of any size need to consider the people at their heart. For a global impact you need a global workforce.
7. An Improved Company Reputation
There’s a slight air of cynicism to this benefit of diversity, equity & inclusion in the workplace, but it remains true. Your brand is important, and your reputation even more so. Having a demonstrably diverse workforce with inclusion baked into company policy is a surefire way of practicing what you preach, whether you’re B2B or B2C. That’s why we take our approach to DE&I so seriously at Peakon.
Businesses with an inclusive culture are twice as likely to meet or exceed their financial targets.Deloitte
8. Clear, Sustained Financial Benefits
We mentioned the financial benefits of diversity, equity and inclusion earlier on, but they bear repeating. In a landmark report, Deloitte found that businesses with an inclusive culture were twice as likely to meet or exceed their financial targets. Even more substantially, they were eight times as likely to achieve better business outcomes—those figures really speak for themselves.
9. Reduced Employee Turnover
It’s a logical conclusion that staff who don’t feel as if they belong, or as if they have a voice, won’t stay in your company for long. That aforementioned report by Forrester also found a 50% reduction in staff turnover when workplace belonging was prioritized with inclusive policy. The more your employees feel heard, the more likely it is that they’ll stick around.
10. Wider Talent Pool
When you limit your search to postcodes or profiles, you limit the development of your business. By actively seeking a more diverse workforce, you tap into a much wider talent pool. Even better, an active engagement with diversity, equity and inclusion actively opens up new positions within your business—the hiring demand for DE&I roles has increased by 106% over the past two years.
Getting Started with Diversity, Equity & Inclusion
If you’ve never made a sustained effort as a business to encourage diversity, equity & inclusion, then enacting change across your company can seem daunting. But it’s of the utmost importance that you do.
The most important step is the first one: taking stock of the current situation. An effective DE&I solution needs to provide an accurate measure of both representation and inclusiveness across your organization. If you don’t acknowledge existing shortcomings, your strategy will be flawed from the start.