If you’re looking for a rationale to endorse the advantages of diversity and inclusion for business, look no further. We offer five useful tips on why D&I is an asset to an organisation and the rewards it can bring.
- Competitive Advantage. Investing in D&I can be one of your greatest competitive advantages. McKinsey’s report, Diversity Matters, examined data for more than 300 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.
- Innovation. D&I enhances innovation by about 20%, according to research by Deloitte. Employees with diverse backgrounds contribute different ideas and perspectives, which create more disruptive and innovative environments. Because a diverse and inclusive workforce can help ensure that products or services resonate with—and are respectful of—their customers’ cultures, organisations can also more confidently innovate in global markets.
- Workforce. By the year 2025, 75% of the global workforce will be made up of millennials – which means they will occupy the majority of leadership roles over the coming decade. This group has a unique perspective on diversity. While older generations tend to view diversity through the lenses of race, demographics, equality and representation, millennials see diversity as a amalgamation of varying experiences, different backgrounds and individual perspectives. They view the ideal workplace as a supportive environment that gives space to varying perspectives on a given issue. If businesses are looking to hire and retain a millennial workforce, diversity must be a key part of the company culture.
- Better decisions. Team members with diverse backgrounds will bring diverse solutions to the table, which leads to a more informed decision-making process and improved results. Harvard Business Review found that diverse teams are able to solve problems faster than teams of cognitively similar people. A white paper from online decision-making platform Cloverpop found that when diverse teams made a business decision, they outperformed individual decision-makers up to 87% of the time.
- Engagement. When employees in your team feel included, they are likely to be more engaged. Research from Deloitte Australia found that teams that are focused on diversity and inclusion tend to deliver the highest levels of engagement. When employees feel accepted, valued and empowered, they are also happier, more motivated, more productive and easier to retain. As a result, companies with greater diversity tend to have lower turnover rates – meaning reduced recruitment and training costs.
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