The Business Case for Diversity

The business case for diversity
Diversity and inclusion issues are getting a lot of press these days. People see lawsuits in the news and shake their heads at the egregious examples of racism, sexism, and discrimination that continue to come to light.
More companies are beginning to understand that making a real effort to prevent these types of behaviors is essential. Often, their first instinct is to have HR implement standard diversity training for employees.
Unfortunately, this approach tends to waste money and resources at best. At worst, the efforts can actually backfire. That’s because the wrong approach to diversity training can make the issues seem like a legalistic “necessary evil” instead of what it really is: a critical business issue.
Diversity and inclusion are essential components of a company’s financial success. Their benefits are well-documented. Consider Bersin by Deloitte’s High-Impact Diversity and Inclusion Report, which found that organizations with inclusive cultures are TWICE as likely to meet or exceed financial targets when compared to their non-diverse counterparts.
Think about that number: Diversity could actually DOUBLE your likelihood of meeting financial targets. Here are a few reasons why:

1. A welcoming workplace reduces employee turnover

Human capital is your most important resource, and employee churn is expensive and distracting. The time and money spent recruiting, hiring, and training new staff are significant drains. If employees feel threatened or unwelcome, of course they’re going to jump ship as soon as possible. Even if they don’t leave right away, working in a company that doesn’t prioritize inclusiveness will cause plenty of existing employees to stagnate.

2. Valuing diversity gets you the best talent

You can’t get the best job candidates if you’re looking for them in a limited pool. Hiring bias is real, pervasive, and often happens completely subconsciously. Failing to acknowledge this is costing your company the best talent. A diverse, inclusive culture also makes it more likely that the right people continue to advance into leadership positions instead of getting stuck in the wrong role.

3. Demonstrating cultural empathy can open you up to new markets

A deep understanding of your customer is fundamental to creating a product or service that other people want to buy. It makes sense that companies that show an interest in others’ perspectives and value a variety of experiences have the advantage when expanding into new market segments.

4. A diverse workforce increases creativity

Research has shown that teams comprised of people from various backgrounds and experiences will come up with more creative ideas and problem-solving methods. “The more your network includes individuals from different cultural backgrounds, the more you will be creatively stimulated by different ideas and perspectives,” according to research by Harvard Business School professor Roy Y.J. Chua.
When you identify diversity as a business tactic, it’s recognized as a win for everyone, not just the people who are potentially feeling excluded. Emphasizing diversity’s business benefits helps employees understand that it’s critical to the performance of the company, and is therefore an important part of their jobs.
By contrast, when diversity and inclusion efforts are approached with no business context, they’re seen as completely separate from the “real” goals of the business. This type of separation makes diversity efforts seem optional. It also makes it much more difficult to integrate diversity initiatives into the rest of the company’s processes, operations, and values.
Unfortunately, this separation is exactly what happens at most companies. It’s common for company leaders to turn to diversity training only when they finally recognize a problem that has the potential for legal trouble. They hope that diversity training will be the quick deliverable that will clear things up.
This reactive approach comes nowhere close to fixing the complex cultural problems that allow discriminatory behavior to thrive. In fact, it might just irritate and distract your employees – which will hurt your productivity even more.
Ironically, the best way to protect your company from lawsuits isn’t lawsuit-avoidance tactics. The best legal protections come from putting in the time and effort to change company culture permanently and for the better.
Cultural changes don’t happen overnight. It requires serious, engaged leadership as well as guidance from experts. But change can and does happen; we’ve this transformation firsthand and you can achieve it.

  • I agree with all you have shared in this article. I’ve seen this kind of results first hand. However, it still seems like we are answering the, “what do I get out of it question”? I’d like to know when in the process of culture change do we finally get to the point where we are treating others with respect and civility because it is the right thing to do?

  • Peggy S Bud says:

    The best way to change company culture is build awareness and encourage meaningful conversations. Communication differences are an underlying cause of unconscious bias. I provide training to businesses; beginning with developing an understanding of communication behaviors; which ones are hardwired and which ones are linked to socialization. I would like the opportunity to speak with you and discuss ways I might be of help to you, your organization or your clients.
    Best, Peggy Bud

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