Five reasons why promoting diversity and inclusion is an imperative for sustained business success
In the past, putting diversity and inclusion on the boardroom agenda has seen it sidelined under corporate social responsibility as a corporate governance and self-regulation concern rather than as part of a solid business strategy.
Time for a reality check. Simply hiring women, minorities or people of determination to fulfill a quota is no longer acceptable in the 21st century corporate arena.
It’s not just a smart company move to focus on diversity and inclusion, changing global demographics are redefining communities everywhere, digital disruption is impacting the talent pool and those businesses that don’t adapt – to coin a cliché – may wither and die.
Building effective, cohesive, engaged and, ultimately, profitable teams should be the definition of diversity, and the pay-off is a company that is at least 15% more likely to reap above average financial returns.
LinkedIn’s Global Recruiting Trends 2018 report found that 78% of companies prioritise diversity to improve culture and 62% do so to boost financial performance.
5 REASONS WHY
Know your customer because your team is the customer
It’s common sense, to truly get to grips with your customer base, companies need to employ team members who identify with the end consumer. Women, for example, make up to 85% of all purchase decisions, but if they don’t identify with your all male team-designed product, the multi-billion-dollar female economy will remain out of reach. Employees and leaders with the ability to design products and services that suit their own needs, get what the customer – and the wider community – needs, and that equals a competitive edge. The LinkedIn survey noted that 49% of survey respondents said that they were focusing on diversity to better represent their customers.
Foster innovation and creativity
Put five kids from different backgrounds/gender together in a classroom, give them a task to work on together, and you’ll have five different outcomes. It’s the same in the big world where having a workforce made up of people with different backgrounds, experiences and skillsets sees each individual bring something different, innovative and creative to the table. Among Millennials, 83% say they are engaged at work when they believe the organisation fosters an inclusive culture. The more diverse the workplace, the more willing the team is to consider all options as there is no longer one single voice that shouts the loudest.
Win the battle for top talent
In today’s fluid business landscape where technological advancement is rapidly changing the way companies operate, it’s getting harder to fill the skillset gaps in some areas and develop existing talent to meet future business needs. Companies with a strong, transparent diversity and inclusion strategy are hugely attractive to prospective employees with a US report noting that 67% of candidates want to join a diverse team. Those companies that focus on diversity from the get-go have better employee retention rates (fostering a stronger culture of ‘belonging’) and also mitigate the costs of replacing team members, which averages out at around 33% of annual salary per employee.
Diverse teams drive results
Bottom line, it’s a no brainer. Research shows that companies in the top quartile for gender diversity are 15% more likely to see financial returns above the national industry median, and for those in the top quartile for racial/ethnic diversity that rises to 35%. When diverse teams (three or more people) make a business decision, they were found to outperform individual decision makers around 87% of the time, and diverse teams are up to 70% more likely to capture new markets. Plus, there’s the ‘comfort factor’: employees that feel valued and comfortable contributing ideas collectively drive better performance.
Image is everything, but it’s all too easy to look behind the curtain and 83% of today’s employees/job seekers are likely to research company reviews and ratings when on the hunt for a new job. This includes looking at a company’s diversity and inclusion policy, and 61% of women (and 48% of men) reportedly look into the diversity of a company’s leadership team when deciding whether or not to accept an offer. Walking the talk offers a clear PR advantage, and with a growing coterie of national and international rankings, who doesn’t want to be a high profile preferred employer?
Sources: Cloverpop, Deloitte, Glassdoor, Harvard Business Review, LinkedIn, McKinsey & Company, Work Institute (US)