Diversity, inclusivity, and belonging are not just nice-to-haves for companies. Rather, they can play a big role in revenue.
Research has found that organizations with greater diversity are more profitable. This holds true whether it is gender diversity or ethnicity that the company is focusing on.
A study by McKinsey that tracked diverse organizations over time found those with more workplace diversity were 25 percent more likely to have higher revenues. But it’s not just that companies with more diverse employees earn more, those that lack diversity underperforms financially. According to the study, those with the lowest diversity in their workforce are 19 percent more likely to make less than organizations with more diverse representation.
Unfortunately, the McKinsey study also found that many organizations are slow to develop diverse initiatives.
Why it’s important to support diversity, equity, inclusion, and belonging in the workplace
While increased profits are nice, supporting diversity and equity in the workplace has many more benefits for your organization and your employees. Having inclusivity initiatives is something that is expected of organizations. In other words, if you’re not working towards a more diverse workplace, there will be consequences. For example, you could lose out on top talent during job searches. People, particularly younger workers, are looking for companies that invest in diversity, inclusivity, and equity. Seventy-six percent of job seekers said these initiatives were important when they were evaluating job offers.
Another reason organizations need to consider inclusivity and belonging in their workplace is to support company culture. Organizations that have a good mix of employees are often more innovative. And being more innovative helps your company adapt to changes in the marketplace.
Three benefits of diversity, equity, inclusion, and belonging programs
When building a stronger workplace, organizations need to invest in diversity, equity, inclusivity and belonging goals to succeed. While there are many benefits to programs that advance these goals, these three can make or break a business.
1. Numerous studies show diverse workplaces have better performance.
Research and studies support the link between diverse workplaces and increased financial performance. A Berkley University study found that organizations with higher numbers of female employees saw a 41 percent increase in Return on Equity. Harvard Business Review reported that companies with racial and ethnic diversity were 35 percent more likely to earn higher revenues. And BCG found that diverse organizations earn 45 percent more innovative income than organizations that lack diversity in their workplace.
2. Employees will be more engaged when they know the workplace is fair.
Employee engagement levels have often represented a challenge for employers. When employees are more engaged in their work, they will perform better and be less likely to leave the company.
Their enthusiasm can strengthen company culture and create a more positive atmosphere. Inclusivity and equity programs can help employees feel their workplace is fair and that everyone has a chance to succeed and climb the ladder. When employees believe they have an opportunity for advancement regardless of who they are, they will be more engaged with your organization.
3. Reduce turnover, strengthen retention rates, build resilient cultures.
High turnover rates can be costly for a business. When employees leave, there is a financial cost to replace them, but there is also the knowledge they take with them that will be difficult to replace. Creating a more equitable workplace can bolster retention rates and build resilient workplace cultures. Employees that feel they belong won’t be looking elsewhere to satisfy that need.
Best practices for diversity and inclusion
Several best practices have been developed over the years that can help you create a diverse and inclusive workplace for your organization.
DEIB initiatives need to be supported from top-down
Executives and company leadership must be supportive of diversity and inclusivity efforts. Employees need to see that leaders are committed to equity, belonging, inclusivity and diversity before they can trust that these values will be implemented and intertwined into company programs and initiatives.
Encourage diverse mentorship programs
Mentorships are ideal spaces for employees to learn more about different perspectives and outlooks. They can help promote growth and change.
Consider developing a diverse mentorship program that empowers all employees to develop their leadership capabilities and skills. The experience can also create more understanding among employees and break down barriers.
Whether your mentoring program pairs participants from the same background or matches employees from different backgrounds, having a diverse mentorship program is key to creating a more inclusive workplace.
Promote Employee Resource Groups
Employee Resource Groups or ERGs are grassroots initiatives that help employees from similar backgrounds connect and find support. Encourage employees to develop ERGs that represent their diversity and employ best practices for these groups.
Be sure that leaders offer their support for these groups by advocating for them. This can help minority employees access resources that will enable them to learn and grow in your organization.
Shift your recruiting strategy
Job seekers are looking for employers with strong inclusive or diverse programs, particularly Millennials. A recent survey found that 76 percent of candidates consider diversity and inclusivity initiatives a must-have for companies they’ll work for.
If you want to attract top talent, you’ll need to shift your recruiting strategy. It’s important for your HR department to take the lead in helping your organization find and hire diverse talent. Consider revising all aspects of recruitment, including how a job ad is written to the interview process.
Educate employees on diversity, equity, inclusion, and belonging
Allow your employees to be part of the change by educating them on the importance of inclusivity and diversity in the workplace. There are various ways you can train employees on diversity in the workplace. For example, allow your minority employees to get involved in knowledge-sharing activities. It can lead to learning, growth, and more understanding among employees. You can also encourage employees to exhibit more inclusive behaviours in the workplace. This can also demonstrate the value that each employee has at your organization.
Research has found that diversity and inclusivity in the workplace are vital. It can lead to a stronger performance for your company and cultivate a positive workplace culture.
Connecting employees through mentorships and ERGs is a crucial way to encourage belonging. Employers who focus on building equity into what they do and how they do it will benefit from higher profits, more innovation, and increased employee engagement.
Find out more about how Together’s mentoring software can help your company move towards a more diverse, inclusive, equitable workplace.