Written by: Joe Emerson // Oct 4, 2019
Last updated: Oct 4, 2019
Diversity is important enough to Americans to get its own day on the calendar (Oct. 4 in 2019). Businesses, however, should celebrate diversity every day. Why? Because diversity defines us and because it matters to bottom lines. So, with a nod to Oct. 4, let’s explore why diversity matters to bottom lines and how creating a more inclusive workplace serves those bottom lines.
Businesslike Definitions of Diversity and Inclusion
Gallup reports that 55 percent of employees responding to a Society for Human Resource Management survey very strongly or strongly agreed that policies at their workplaces advance diversity and inclusion. Gallup also references a study by Deloitte Touche Tohmatsu Ltd., which found that 69 percent of executives said diversity and inclusion are important.
The data confirm that a push for diversity and inclusion are well underway in the workforce. So how do we define diversity and inclusion in a business context?
All three of Webster’s New World College Dictionary’s definitions of diversity are relevant:
- Quality, state, fact, or instance of being diverse; difference
- A policy of selecting people so as to assemble a group that is diverse, esp. with respect to race and gender; the composition of a group with respect to race, gender, etc.
Gallup says diversity, in the parlance of human relations officers, is about ethnicity, race, gender, sexual orientation, age, socioeconomic status, and physical disabilities. Gallup also says “a lot of companies consider lifestyles, personality characteristics, perspectives, opinions, family composition, education level or tenure (to be) elements of diversity, too.”
Webster’s New World College Dictionary says inclusion means “an including or being included.”
Gallup notes that inclusion “refers to a cultural and environmental feeling of belonging” and can “be assessed as the extent to which employees are valued, respected, accepted and encouraged to fully participate in the organization.”
Why Diversity Matters
Beyond the obvious – it is simply the right thing to do – diversity matters to your business because it delivers quantifiable results.
McKinsey & Co. says diversity boosts bottom lines. It cites research showing that more diversity means greater financial rewards. Here are the bullet points from a McKinsey report using data from 366 public companies in the United States and abroad:
- Companies ranked in the top 25th percentile for racial and ethnic diversity were 35 percent more apt to log returns exceeding the financial medians in their industry brackets. Those in the top 25th percentile when it came to gender diversity were 15 percent more likely to top financial medians in their respective industries.
- In the U.S., ethnic and racial diversity had a greater effect on financial performance than did gender. The report suggests that’s because “earlier efforts to increase women’s representation in the top levels of business have already yielded positive results.”
- Data show that no company or industry is in the top 25th percentile for both gender diversity and racial-ethnic diversity. “The unequal performance of companies in the same industry and the same country implies that diversity is a competitive differentiator shifting market share toward more diverse companies.”
The people who shape the business world have been paying attention. A study done in 2018 found that women and minorities held a record 34 percent of board seats at Fortune 500 companies, up from 30.8 percent in 2016.
Here’s another bottom line on diversity, one that’s harder to quantify. If you create a workforce of people from myriad personal, cultural, geographic, ethnic, racial, and religious walks of life, the range of perspectives and experiences at your organization grows exponentially. Inspiration and ideas are byproducts of diversity, along with advantages such as increased personal and organizational productivity.
It’s not easy to achieve and sustain workplace diversity. But if your business fails to connect with the public, your clients, and customers, it will struggle to thrive. It’s a diverse world, and a diverse workforce makes that invaluable connection more possible. Achieving that diversity isn’t a matter of good luck; it takes good policies.
How You Can Create a More Inclusive Workplace
There are a lot of interesting theories about why diversity and inclusion efforts often fail. One common reason is the absence of a push for inclusion. It doesn’t do any good to hire people who are different if you allow the differences to isolate them.
Gallup gives three overarching requirements for sustaining a diverse and inclusive culture:
- Treat employees with respect.
- Value employees for their strengths.
- If you are a leader, do what is right.
On a more granular level, here are six steps for building a more inclusive work environment:
- Educate leaders at all levels.
- Task a group with brainstorming, guiding, and monitoring inclusion policies.
- Celebrate the things that make your team members different.
- Listen to your people.
- Make meetings more effective/productive by fostering participation/contributions.
- Communicate your goals for diversity and inclusion and monitor progress.
USF’s Office of Corporate Training and Professional Education Can Help
Overcoming challenges is how businesses succeed, and training helps. CTPE takes pride in partnering with companies to provide training tailored to their needs, and that includes on-site corporate training.
Want more details on what the Office of Corporate Training and Professional Education offers?