Diversity and inclusion (D&I) has been trending as a topic for several years. In fact, we’ve seen a rise in corporations adding chief diversity officers to their c-suite teams to create the infrastructure necessary to commit to D&I practices. Whilst we’ve seen a lot of progress, there is still a lot of work to do, especially in the c-suite of top corporations.
The diversity of an organisation is important to both employees and customers. Glassdoor’s recent survey suggests that 67% of job seekers consider diversity as a deciding factor when considering job opportunities. Further, having a diverse workforce that reflects the broader working population means a company is also reflecting the diversity of its customer or market base who expect to see themselves represented in the companies from which they purchase. It should come as no surprise then that research shows diversity leads to increased productivity and better problem solving by leveraging unique perspectives that mirror the needs of the customer base.
The bottom line
As a result, we have seen the impact of diversity, especially in leadership, on the bottom line for organisations. For example, a 2018 Harvard Business Review study found that diverse companies had 19% higher innovation revenues. Similarly, McKinsey’s Diversity Wins report in 2019 found that companies with top quartile gender diversity were 25% more likely to have above-average profitability compared with those in the bottom quartile. Further, Harvard Business Review found that companies with two-dimensional diversity in leadership were 45% more likely to report market growth and 70% more likely to have entered a new market in the past year.
We have proven that it can be easy to increase the diversity in an organisation. For example, companies can use a valid personality tool to improve the fairness of their selection processes by hiring high-performing, diverse talent.
The bigger challenge that organisations face today is how to retain the diverse talent acquired and ensure those individuals get opportunities to become future leaders. In many cases, this requires a cultural shift in an organisation to one of inclusion. In a recent episode of The Science of Personality Podcast, Pfizer VP of HR and global head of D&I Willard McCloud III talked about how one of the key components to its D&I efforts is to encourage people to speak up, regardless of their position in the company. Rather than keeping quiet, employees are encouraged to have difficult conversations with their colleagues to develop a better understanding of their similarities and differences. To take advantage of diversity in background, perspectives, and ideas, people must feel respected and valued. Research suggests that organisations with above-average gender diversity and engagement outperform peers by 46-58%. This requires leaders who can create and cultivate a culture of inclusion.
A brighter future
Beyond being the right thing to do, implementing D&I practices can have clear benefits for organisations. If you commit to D&I, you will have better leaders, a more engaged and productive workforce, happier customers, and a more profitable company.
Written by Kimberly Nei, director of talent analytics at management consultancy Hogan Assessments
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