Appendix:
The Business Case for DEIB
Increasingly organizations are expanding their efforts to create a more inclusive and inviting culture: Investing in DEIB can positively impact recruiting, employee engagement, retention, the customer experience, the organizational culture, and as research has shown, organizations’ bottom line. The elements of the business case we discuss with all prospective and current clients includes the elements below and be tweaked to specific client needs. Elements including:
Improved financial performance
A study by McKinsey & Company (“Diversity wins: How inclusion matters,” May 2020) found that companies with diverse leadership teams are more
likely to have higher financial returns than companies with less diversity. The study found that companies in the top quartile for gender diversity on their executive teams were 25% more likely to have above-average profitability than companies in the bottom quartile. Similarly, companies in the top quartile for racial and ethnic diversity on their executive teams were 36% more likely to have above-average profitability than companies in the bottom quartile.
Increased Innovation
A diverse workforce brings a range of perspectives and experiences to the table, which can lead to more innovative ideas and better problem-solving.
According to a study by Boston Consulting Group (“How diverse leadership teams boost innovation,” January 2018), companies with above-average diversity in management teams reported higher innovation revenue than companies with below-average diversity.
Mitigation of legal and reputational risks
In today’s business climate, companies that do not prioritize DEIB run the risk of facing legal and reputational consequences. Discrimination lawsuits and negative media which took years to create and can take years to recover.
Increased employee engagement and retention
Employees who feel included and valued in the workplace are more likely to be engaged and committed to their work. A study by Deloitte found that inclusive teams are 17% more likely to report that they are high-performing,
and employees who feel included are 20% more likely to stay with their current employer. Moreover, companies who have a robust DEIB strategy are more effective with their recruiting efforts. According to Glassdoor’s 2020 “Diversity and Inclusion Study,” 76% of respondents stated that a diverse workforce is an important factor when evaluating companies and job offers with 58% who would not apply at a company lacking diversity in its workforce.
Many organizations, if not most, can claim that they have diversity, but generally that is at the lowest levels. Representation at the highest levels is critical to have champions and role models for any organizational initiative. Moreover, the work must go beyond expanding diversity, which is important, to assure that all stakeholders are treated fairly regardless of their backgrounds (equity), have an opportunity to participate in critical discussions that impact them differentially than the organization as a whole (inclusion), but ultimately feel that they belong and are valued as part of the organization’s family at large (belonging).
Good DEIB is good business!
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