A diverse workplace lends itself to higher levels of employee engagement, better performance, and higher profits. Response to Deloitte’s Global Human Capital Trends report regarding the importance of diversity and inclusion has increased by 74% in the last three years. The idea of diversity and inclusion in the workplace is not a new one, but surprisingly it is an initiative that many companies struggle to implement.
Research shows that diversity and inclusion in the workplace causes more employee engagement, better performance, and higher profits. Response to Deloitte’s Global Human Capital Trends report regarding the importance of diversity and inclusion has increased by 74% in the last three years. The idea of building teams comprising individuals with different lived experiences falls into a new frontier focused on adding diversity of thought to the traditional demographic lens. While the idea of diversity and inclusion in the workplace is not a new one, today, the new frontier is focussed on bringing a diversity of thought to the traditional demographic lens by building teams of individuals with different lived experiences.
Recent research has found that diversity among employees often goes hand-in-hand with improved employee engagement. Today’s employee is concerned with more than just the monetary gains that having a career lend, they want to know that the work they are doing matters and that the company that they are a part of cares about creating a diverse and inclusive environment. Today’s employee is concerned with making a difference, and this ideal extends to how they would like their work environment to be. This includes being part of a diverse, and inclusive work environment.
“Inclusion is the ability to engage diversity in your workforce, so that everyone has equal opportunities to contribute.”-Shirley Davis Sheppard, Ph.D., vice president of diversity and inclusion and workplace flexibility at the Society for Human Resource Management (SHRM).
- 74% of millennials believe that their organization is more innovative when it has a culture of inclusion.
- 79% of organizations say fostering a sense of belonging in the workplace is very important for their success in a year duration.
- 25% of employees recognize comfort as the biggest driver of belonging, wanting to feel fairly treated and able to bring their authentic selves to work.
- 67% of job seekers said a diverse workforce is important when considering job offers.
- Over 86% of job seekers say workplace diversity is an important factor when looking for a job.
A recent study found that inclusive companies are 1.7 times more likely to be innovation leaders in their market. Organizations are beginning to realize the importance of creating a work environment that is diverse and inclusive, because of the positive impact that these initiatives have on their overall employee engagement. A McKinsey study found companies in the top quartile for ethnic and racial diversity in management were 36% more likely to have financial returns above their industry mean. In fact the combination of employee engagement and 3gender diversity results in 46% to 58% higher financial performance for business units with above average engagement and gender diversity. By creating an environment focused on diversity and inclusion you are making sure that your company stands out above the competition.
Research shows that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile.
However, even though there have been many great strides taken in making sure that many companies have diversity and inclusion initiatives, there is still much work to be done.
- Resumes submitted by people with African American-sounding names are 14% less likely to get a call back than those with white-sounding names.
- 25% of black candidates received callbacks from their whitened resumes, while only 10% got calls when they left ethnic details intact.
To nurture diversity and inclusion, companies must first become great listeners, running meaningful, 'always-on' voice of employee programs. Companies with more racial/ethnic or gender diversity are proven to have financial returns above their national industry medians. In addition:
Studies found that workplace belonging can lead to an estimated 56 percent increase in job performance, reduction of turnover risk by 50 percent, and a 75 percent decrease in employee sick days.
- Companies reporting the highest levels of racial diversity in their organizations bring in nearly 15 times more sales revenue than those with the lowest levels of racial diversity.
- Companies that have more diverse management teams have 19% higher revenue due to innovation.
- Research shows that companies with more diverse teams are more innovative, engaged, and creative in their work.
- Profits increase by up to 50% as the share of women increases.
- Research shows that when diverse teams made a business decision, they outperformed individual decision-makers up to 87% of the time.
- For every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes rise 0.8 percent.
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