Are you struggling to achieve your company’s diversity and inclusion goals?
That’s a sure sign you’re taking the right approach.
Successful diversity initiatives—the kind that truly make a meaningful, measurable difference—don’t come easy. But while the process may sometimes seem arduous, the rewards you stand to earn definitely outweigh the challenges.
If you’re in the thick of determining how best to support your company’s growth through diversity and inclusion, the following findings will keep you inspired to carry on.
Gender diversity means higher profits.
You’ve probably heard that companies with female CEOs at the helm tend to perform well. But did you know that women-led companies reap three times the returns of Standard & Poor 500 enterprises run predominantly by men? That’s what Quantopian, a research platform based on crowdsourced algorithms, discovered when it analyzed 12 years’ worth of data on Fortune 1000 companies. The 80 women executives studied were shown to produce equity returns 226 percent better than the S&P 500.
The importance of gender diversity for profits has been borne out in additional studies, such as one from global nonprofit Catalyst, which showed how Fortune 500 companies with more female board directors experience higher financial performance. Those with the highest percentages of women were found to outperform those with the least by 53 percent.
Racial and ethnic diversity leads to greater returns.
Of course, closing the gender gap is just one component. Equally important are inclusion measures for employees representing diverse cultural and ethnic backgrounds.
To understand the link between racial diversity in the workplace and company financial performance, consider McKinsey & Company’s latest report on the issue. In reviewing information from more than 1,000 companies, researchers discovered that executive teams ranking in the top 25 percent for racial and ethnic diversity were 33 percent more likely to reap financial returns above the national median for their industries.
In another five-year research project involving more than 2,000 teams, the presence of multicultural members significantly enhanced creative performance.
Diversity and inclusion improve recruiting and retention…
From sexual orientation to gender to ethnicity, there’s little doubt that employers who make diversity and inclusion core components of their culture are best positioned to recruit and retain a diverse employee base.
According to a Glassdoor survey, two-thirds of job applicants consider diversity to be an important factor in deciding where they want to work.
…But gaps remain
However, progress on diversification initiatives remains slow. For example, a new study of 4,600 employees counters a commonly-held belief that women are less likely to negotiate their salaries—a factor often said to account for the 10 to 20 percent wage difference between men and women. In fact, women ask for pay raises as often as their male contemporaries, but receive them five percent less often.
Gender equality is far from the only area where diversity and inclusion efforts often fall short. In Atlassian’s State of Diversity and Inclusion in Tech report, close to half of the 1,500 employees surveyed felt their companies needed to make improvements in diversity for age, gender, race, and ethnicity…and close to 40 percent felt the same about diversity in sexual orientation.
A separate tech industry survey found that 24 percent of employees have personally felt discriminated against at their current companies.
Perhaps most alarming of all: Some 40 percent of employees have cited unfairness in the forms of harassment, bullying, or stereotyping as a major reason they chose to leave a company.
In other words…
It’s not enough to simply say your business prioritizes diversity and inclusion. You have to create a culture of engagement that extends far beyond stated practices and policies. That means taking a top-down approach designed to engage all employees in the process.
While most leaders are aware of this—38 percent of executives report that the primary sponsor of an organization’s diversity and inclusion efforts is the CEO—just 12 percent of companies studied by Deloitte have reached the most “mature level” in the consulting firm’s model.