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Diversity isn't just a catchphrase, it's a crucial part of running a business in today's world. But despite the best of intentions, many businesses struggle to progress past conversations about diversity and inclusion to actually implementing these concepts.
McKinsey & Company, a global consulting firm and think tank, says in their recent 2023 Diversity, Equity and Inclusion report that the amount spent worldwide by companies on diversity, equity and inclusion-related efforts was approximately $7.5 billion and is expected to double to $15.4 billion by 2026. Yet, at the current rate, it will take another 151 years to close the current global economic gender gap.
With that slow progress in mind, there are things your company can do to gain ground on the diversity and inclusion playing field. Here are six benefits that come with upping your inclusion efforts.
Boosted creativity
It's a fact that diverse teams generate better ideas. When a workplace is filled with employees of various genders, ages, races and backgrounds, they each come with a different viewpoint and set of skills. A company will generate the greatest amount of creativity when new voices are heard and employees can share their unique ideas and perspectives.
According to an article published by the University of North Carolina at Pembroke's business school reads, "People who think differently blend perspectives for stronger collaboration, problem-solving and innovation. Differences in thought processes also help to avoid groupthink, which stifles creativity and results in stale ideas." In other words, birds of a feather might flock together, but they probably won't have the freshest ideas.
Happier employees
Dozens of studies have found that employees in inclusive companies have more positive work experiences than those in non-inclusive companies. In an article for the Great Place to Work Institute, Matt Bush writes that when employees trust that they will be treated fairly (regardless of race, gender, sexual orientation or age) they are 9.8 times more likely to look forward to work, 6.3 times more likely to have pride in their work, and 5.4 times more likely to want to stay at their company.
In short, happy employees enjoy their jobs and are more loyal to their employers, so companies will retain more of the talent they worked so hard to hire.
Better problem solving
An oft-overlooked facet of diversity is cognitive diversity. A 2017 study in the Harvard Business Review found that when tasked with problem-solving exercises, even teams that were a diverse mix of genders, ethnicities and ages didn't always fare well.
What mattered, they found, was the cognitive diversity of each team. They found a correlation between the teams who completed the challenge fastest and the level of cognitive diversity among team members. Study authors Alison Reynolds and David Lewis concluded, "A high degree of cognitive diversity could generate accelerated learning and performance in the face of new, uncertain and complex situations."
Improved team performance
Diverse teams work better together and get more results. Like the Harvard study where cognitively diverse teams solved challenges faster, Harvard Business Review found diverse teams make fewer factual errors. Another study published in Innovation found diverse work teams also introduce more innovations.
Higher revenue
If your bottom line is simply increasing the bottom line (it is business, after all) then there's good news for you. The largest incentive for many companies is the cold, hard fact that improving diversity is directly correlated with increased profitability.
Companies in the top quartile for both gender diversity and ethnic/cultural diversity were shown in McKinsey & Company studies to be 21% and 33%, respectively, more likely to outperform their peers on profitability. It's a complex topic that comes down to more diversity equating to higher profits.
It's the right thing to do
Regardless of the industry you are in, chances are your potential customers and employees are a mix of ages, genders, races, faiths and sexual orientations. Becoming more inclusive isn't just good business, it's the best way to run an organization where everyone feels respected. Celebrating differences should be a core value rather than a set of policies and procedures.
Salt Lake Chamber's Diversity & Inclusion Leadership Training Series
The Salt Lake Chamber's upcoming Diversity & Inclusion Leadership Training Series can help businesses learn the benefits of diversity and inclusion and develop a strategic plan to implement. The Chamber's three-month-long spring cohort will take a group of up to 30 local professionals through training aimed at providing tools and practices needed to make a significant impact on the diversity of Utah's business landscape.
The classes will take place biweekly from March 22 until May 31. Scholarships are available to offset the total cost of the program, so all accepted applicants are guaranteed the scholarship pricing of $299. Local professionals whose roles include overseeing diversity and inclusion are invited to apply for the program until the March 17 deadline.
