The Business Case for Diversity and Inclusion
Next week, Gem is publishing the first of a three-part series we’re calling The Ultimate Guide to Sourcing and Nurturing Diverse Talent Pools. We wrote Part 1 (“Diversity Sourcing 101: The Talent Leader’s Handbook”) for everyone in talent acquisition… but we were thinking of TA leaders in particular, because they occupy a crucial space between sourcers and upper management.
As such, talent leaders are in a position to educate their teams on strategies for sourcing more diverse talent pools and best practices for outreach and nurture campaigns. But they’re also in a position to affect the kinds of organizational change necessary to inclusive environments: holding hiring teams accountable for checking their biases during interviews, for instance, or strategizing with managers to cultivate cultures of belonging on their respective teams. After all, if new hires don’t stick around, the burden is back on sourcers to uncover more talent for the company’s diversity initiatives. And so begins a vicious circle of getting more candidates in the door who walk out as quickly as they walked in—because there’s no structure to support them once they’re there.
We realized while writing Part 1 that talent leaders might find themselves in the position of having to argue for why their team’s resources should be allocated to diversity sourcing. Workplace diversity breaks cycles of discrimination and oppression, eases the struggle for representation, and increases respect among peers, yes—and those are powerful arguments in and of themselves. But there’s also a business case for hiring a diverse workforce, and it’s the one your C-levels might need to hear: Companies that embrace D&I strategies in all aspects of the business statistically outperform their peers. This likely isn’t news to you; but we’ve collected some of that data for you here. This way you can make your case based on the numbers if you need to.
D&I Drives Employee Productivity and Performance
- Diverse teams make decisions up to 87% more effectively than non-inclusive teams. (Cloverpop)
- Teams that follow inclusive processes make decisions 2x faster, in half as many meetings. (Cloverpop / Forbes)
- Employees in highly diverse and inclusive organizations show 26% more team collaboration and 18% more team commitment than those in non-inclusive organizations. (CEB / Gartner)
- Employees who feel their voice is heard at work are 4.6x more likely to feel empowered to perform their best work. (Salesforce)
D&I Fosters Creativity and Innovation
- Organizations with inclusive cultures are 6x more likely to be innovative and agile than those with non-inclusive cultures. (Bourke and Dillon / Deloitte)
- When employees believe their organization is committed to diversity and they feel included, innovation increases by 83%. (Deloitte)
- Companies with above-average diversity scores see 19% more “innovation revenue” (revenue generated from improved or entirely new products) than those with below-average diversity scores. (Boston Consulting Group)
- Companies that fulfilled a series of nine “positive diversity requirements”—including women and minority CEOs and positive policies on LGBTQIA+ employees—announced an average of two more products a year than their less-diverse competitors. (Mayer, Warr, and Zhao)
D&I Grows Your Talent Pool
- 67% of job seekers say a diverse workforce is a crucial factor when evaluating job offers. 72% of women, 89% of Black people, 80% of Asian people, and 70% of Latinos look at D&I when considering a company—and not just diversity on the whole, but diversity in leadership and upper management. (Glassdoor / PwC)
- 59% of companies surveyed in the UK believe that a lack of investment in diversity has been a barrier to attracting high-quality candidates. Those companies working on their D&I strategies felt they were 6x more likely to convert applicants to quality hires as a result of those new strategies. (Glassdoor)
D&I Reduces Employee Turnover
- Companies with more diverse and inclusive teams have 22% lower turnover rates than those without. (Gallup / Anita Borg Institute)
- Inclusive companies are 3.8x more likely to be able to coach people for improved performance, 3.6x better able to deal with personnel performance problems, and 2.9x more likely to identify and build leaders. (Bersin by Deloitte)
- Diverse and inclusive workforces demonstrate 1.12x more discretionary effort, 1.19x greater intent to stay, 1.42x greater team commitment, and 1.57x more collaboration among teams. (CEB / Gartner)
D&I Increases Profits and Grows Your Market
- Companies in the top quartile for ethnic diversity are 35% more likely to see financial returns above the industry median; companies in the top quartile for gender diversity are 15% more likely to do so. (McKinsey)
- Highly inclusive organizations generate 2.3x more cash flow per employee, 1.4x more revenue overall, and prove 120% more capable of meeting their financial targets. (Gartner)
- Companies in which women make up at least 15% of senior managers see 50% higher profitability than those in which female representation is less than 10%. (Credit Suisse)
- The 50 companies on the Best Workplaces for Diversity list average 24% higher year-over-year revenue growth than non-list winners. (Fortune)
- Employees of organizations with “2-D diversity” (diversity of both inherent and acquired traits) are 45% more likely to grow their market share over the previous year and 70% more likely to capture a new market. (Harvard Business Review)
We’ll let the numbers speak for themselves.
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