By Hannah Bills
Companies in the US are missing out on $1.05 trillion by not prioritizing diversity and inclusion.1 What is diversity? We use this term often, but we rarely define it. According to Global Diversity Practice, “Diversity is any dimension that can be used to differentiate groups and people from one another.”2 These dimensions include race, gender, sexual orientation, religious beliefs, ethnicity, marital status, age, physical and mental ability, language, education level, etc. The range of differences in people is enormous and beautiful.
Unfortunately, all people have biases against and for various dimensions of diversity. As such, diversifying a company seems easier said than done. Biases make diversity difficult, but prioritizing diversity and inclusion is not only the right thing, but also the smart thing for your company.
How Does Diversity Benefit Companies?
Increased Creativity and Innovation
Imagine walking into a work meeting, and all the people sitting around the table are just like you. They not only look like you, but they also think like you and have the same life experiences as you. Odds are that no unique ideas would come out of this meeting because everyone would have the same perspective.
Researchers at the Harvard Business Review were curious if there was an actual difference in idea quality between groups that were diverse and those that were not. They completed a study where they gave six teams different problems to solve. “The groups that scored highest were more cognitively diverse than those that took longer or failed to complete the challenge.”3 Those directing the experiment concluded that “higher cognitive diversity may lead to greater performance and faster learning. These factors spark creativity and innovation.”4
Everyone has different experiences, strengths, and skills. When people with diverse skills and brains work together, they solve problems more effectively. This is because their differences foster higher creativity and innovation. Making use of these differences can only help a company.
Higher Revenue
McKinsey & Company, a leader in diversity and inclusion, has been tracking companies’ revenue benefits of gender and ethnic diversity since 2014. It measured the likelihood of companies in the top quartile for gender and ethnic diversity to outperform companies that were in the bottom quartile. Figure 1 depicts McKinsey & Company’s findings in 2019 illustrating how companies in the top quartile of gender diversity were 25% more likely to outperform companies in the bottom quartile. In the same year, companies in the top quartile for ethnic diversity were more likely to outperform companies in the bottom quartile by 36%.5
Increased creativity and innovation drive higher revenue. These values lead to cutting-edge solutions and help companies stand out among competitors. Microsoft is a great example, being a company known for diversity. There’s no coincidence that it is one of the most creative and innovative companies in the world as well as one of the most profitable.7 Microsoft has taken the necessary steps to hire a diverse workforce, and it is reaping the rewards: increased creativity, innovation, and revenue.
Diversity also drives higher revenue by creating a greater understanding of different market needs and tendencies. If you hire a diverse group of employees, your company will have more insiders who belong to target markets. As a result, your company will be better able to empathize with customers, which is arguably the most valuable thing a company can do. According to Forrester Research, companies that know and prioritize the needs of their customers gain 4.6 times more revenue growth than companies that don’t.8
Many companies work hard to create a diverse workforce; however, they may never see the benefits of diversity if they do not also prioritize inclusion.
Why Does Diversity Need Inclusion?
What is inclusion? Verna Meyers, a diversity and inclusion expert, said, “Diversity is being invited to the party; Inclusion is being asked to dance.”9 An inclusive work environment is one where everyone feels valued and heard. It is a place where no one is afraid to share their ideas, and where no one needs to put on a façade to feel accepted.
Your diverse employees will not share their ideas if they believe that no one will listen to them. If employees don’t feel that their differences are valued, they will try to fit in with the mainstream, and the unique skills and knowledge for which they were hired will go to waste.
Another reason diversity needs inclusion is because the public demands it. In 2021, Deloitte completed a global survey of the Millennial and Gen Z generations and found that they are passionate about social justice. They hold people and companies accountable regarding “the environment, social equality, and discrimination.”10 Companies that don’t prioritize inclusion will pay the price of higher turnover rates from employees who don’t feel included, as well as lost business from customers who prioritize inclusion.
If that’s not enough to worry you, keep in mind that Millennials and Gen Zers, made up over 40% of the population as of 2021.11
How Can Companies Create a Diverse and Inclusive Work Environment?
The following are some ways you can create a diverse and inclusive work environment:
- De-bias the hiring and promotion processes by creating a system that measures only the accomplishments and skills of applicants and employees
- Respect various religious and cultural holidays by offering several observed holidays and letting employees choose which ones they want to celebrate12
- Install gender-neutral bathrooms, use gender-neutral language in company benefits and policies, and include nonbinary gender choices on forms13
- Make everything in the office wheelchair and handicap friendly
- Sponsor non-work activities for members of marginalized groups
- Highlight an employee each month in a company newsletter to celebrate employee individualism
- Give employees the opportunity to participate in employee resource groups where they can support employees belonging to marginalized groups
- Survey employees regularly on the inclusivity of the company
These are just a few ideas to get started, but since the scope of human differences is endless, there will never be a stopping point for creating an inclusive workplace. If you don’t know where to begin, just ask your employees what they need.
A Cry for Diversity and Inclusion
Diversity provides different perspectives and offers unique skillsets. In an inclusive environment, diversity leads to creative and innovative problem solving and higher revenues. Diversity and inclusion set a company apart from its competitors. If you want your company to excel, look at your diversity and inclusion efforts and see what you can do to set your employees (and your company) up for greater success.
Notes
1. “Accenture | Let There Be Change,” Accenture, 2020, https://www.accenture.com/_acnmedia/Thought-Leadership-Assets/PDF-2/Accenture-Getting-To-Equal-2020-Research-Report.pdf.
2. “What Is Diversity & Inclusion?” Global Diversity Practice, October 25, 2019, https://globaldiversitypractice.com/what-is-diversity-inclusion/#:~:text=Diversity%20is%20any%.
3. Andra Picincu, “What Are the Advantages of a Diverse Workforce?” Small Business – Chron.com, July 6, 2020, https://smallbusiness.chron.com/advantages-diverse-workforce-18780.html.
4. Picincu. Advantages.
5. Sundiatu Dixon-Fyle, et al., “Diversity Wins: How Inclusion Matters,” McKinsey & Company (McKinsey & Company, January 25, 2022), https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters.
6. Dixon-Fyle. Diversity Wins.
7. Matthew Johnston, “10 Most Profitable Companies in the World,” Investopedia, July 28, 2021, https://www.investopedia.com/the-world-s-10-most-profitable-companies-4694526.
8. “Microsoft Empathy in Business,” Microsoft Pulse, accessed February 23, 2022, https://pulse.microsoft.com/uploads/prod/2020/06/Microsoft-Empathy-in-Business.pdf.
9. AppNexus, “Diversity Is Being Invited to the Party: Inclusion Is Being Asked to Dance,” YouTube, 2015, https://www.youtube.com/watch?v=9gS2VPUkB3M.
10. Deloitte, “A Call for Accountability and Action – Deloitte,” The Deloitte Global 2021 Millennial and Gen Z Survey (Deloitte, 2021), https://www2.deloitte.com/content/dam/Deloitte/global/Documents/2021-deloitte-global-millennial-survey-report.pdf.
11. “U.S. Population Share by Generation 2020,” Statista, July 27, 2021, https://www.statista.com/statistics/296974/us-population-share-by-generation/.
12. Peggy Yu, “What Should Inclusion Really Look like in the Workplace?,” Forbes (Forbes Magazine, January 18, 2018), https://www.forbes.com/sites/peggyyu/2018/01/17/what-should-inclusion-really-look-like-in-the-workplace/?sh=7dfc73853f0f.
13. Yu. Inclusion in Workplace.
