The last few years have seen important conversations about discrimination brought to the fore - and the workplace is no exception.
A diverse, inclusive workplace is something that every employer should be working towards. But leveling the playing field and creating a more equal work environment should not just be seen as a box ticking exercise.
Multiple studies have proven more diverse workplaces achieve better results and have happier employees. As a result, 96% of business leaders agree that workforce education programs centering on diversity and inclusion can help drive business growth and deliver a long-term competitive advantage.
Read on to find out how working to improve diversity and inclusion can benefit your employees, and your business.
Key workplace diversity and inclusion statistics
- Inclusive companies are 1.7 times more likely to be innovation leaders
- Sales revenue increases 15-fold among companies with high racial diversity
- Inclusive teams make better business decisions twice as fast
- Diverse companies are 70% more likely to capture new markets
- More than 3 in 4 job seekers are looking at diversity when deciding whether to accept a job offer
Diversity vs. Inclusion
Before we delve in, it’s important to understand the key difference between diversity and inclusion, and why workplaces need to have both.
While having a diverse team is a crucial first step, inclusivity is the key to curating an engaged and productive workforce. Creating a company culture in which all employees feel included and valued ensures that you are also maintaining diversity, and not just ticking a box during hiring.
As explained by diversity and social responsibility officer at ADP, Rita Mitjans - diversity is the “what”, inclusion is the “how”. That is, diversity reflects the makeup of your workforce - whether it’s gender, race, religion, ability or sexuality - while inclusion is the day-to-day workplace culture that empowers employees to thrive.
“Hiring diverse talent isn’t enough—it’s the workplace experience that shapes whether people remain and thrive.” - McKinsey
Why is diversity and inclusion important?
There are many benefits to fostering a diverse and inclusive working environment for your business - from increased employee engagement to a wider range of ideas and perspectives. In the next section you’ll find a long list of statistics and research proving the impact of diversity and inclusion in the workplace.
But why is this so important? Apart from simply being the right thing to do, researchers from the Harvard Business Review have also found scientific evidence to back diversity and inclusion. Improved decision-making, higher productivity and better innovation among diverse teams all stems from increased cognitive diversity, which enables teams to solve problems faster and more effectively.
What is cognitive diversity? Simply put, it’s the inclusion of team members who have different ways of thinking, whether it’s due to education, class, cultural background, race or many other factors.
Improving cognitive diversity among your workforce helps to prevent ‘groupthink’: the echo chamber that arises when team members all think the same way and try to apply the same set of tools, resulting in limited solutions.
Welcoming a wide range of backgrounds, experiences and perspectives into your business opens up the floor for more innovative ideas, and better business results.
Statistics showing the business impact of diversity and inclusion
Now, let’s take a look at some of the statistics proving the business impact of strengthening your diversity and inclusion strategies.
1. Inclusive companies are 1.7 times more likely to be innovation leaders
More diversity equals more innovation according to research by Josh Bersin. In fact, companies that ranked as more inclusive were 1.7 times more likely to be innovation leaders in their market, and 1.8 times more likely to be change-ready.
2. Companies with diverse management teams report greater innovation revenue
A report by BCG also found that this extends to leadership, as companies with above average diversity on their management teams reported greater innovation revenue.
“This finding is huge for tech companies, start-ups, and industries where innovation is the key to growth. It shows that diversity is not just a metric to be strived for, it is actually an integral part of a successful revenue generating business.” Anna Powers, Forbes
3. Companies with diverse executive teams are more likely to have above-average profitability
Gender diversity among executive teams has proven to be particularly beneficial, as research by McKinsey found that companies in the top quartile for executive gender diversity were 25% more likely to generate greater profits.
4. Companies with diverse boards see higher profits
This trend doesn’t stop at employees and management - studies have shown that companies with ethnically and culturally diverse boards are 43% more likely to experience higher profits.
5. Racially and ethically diverse companies perform better financially
Racially and ethnically diverse companies are 35% more likely to outperform their respective national industry medians’ financial returns, according to reports.
6. Sales revenue increases 15-fold among companies with high racial diversity
Scientists at the University of Illinois found that companies reporting the highest levels of racial diversity brought in nearly 15 times more sales revenue on average than those with the lowest levels of racial diversity.
7. Companies with more women executives are more likely to outperform competitors
McKinsey found that companies with more than 30% women executives are more likely to outperform those with fewer or none at all. Researchers at the Harvard Business Review suggest that this is due to the fact that diverse teams are more equipped to deal with adversity and difficult work environments, and can perform better as a result.
“Thriving in a highly uncertain competitive environment requires creative thinking in those areas, and the diverse collaborators were better equipped to deliver it.” - Harvard Business Review
8. Inclusive teams make better business decisions twice as fast
A white paper by Cloverpop has found that inclusive teams actually make better business decisions up to 87% of the time, and they make those decisions twice as fast within half as many meetings. Decisions made and executed by diverse teams also delivered 60% better results, maximizing business performance substantially.
9. Gender-diverse companies note improved value creation
McKinsey researchers found a positive correlation between ethnic/cultural diversity and value creation, with highly gender-diverse companies being 27% more likely to have superior value creation.
10. Diverse companies are 70% more likely to capture new markets
In a study by the Harvard Business Review, employees at diverse companies were 45% more likely to report that their firm’s market share grew over the previous year and 70% more likely to report that the firm captured a new market.
11. Improving racial diversity boosts company efficiency
According to reports, a 1% improvement in racial diversity similarities between upper and lower management boosts company efficiency by $729 to $1590 per year per employee.
Statistics showing the importance of diversity and inclusion for job seekers
Investing in better diversity and inclusion isn’t just a driver of business success, it’s also essential to maintaining employee engagement and attracting talent. Here’s what the research tells us.
12. More than 3 in 4 job seekers are looking at diversity when deciding whether to accept a job offer
According to a survey from Glassdoor, 76% of respondents say that a diverse workforce is an important factor when evaluating companies and job offers, and nearly a third would not apply to a job at a company where diversity is lacking.
13. Inclusive workplaces boost employee engagement
83% of Millennials are actively engaged in their work when their companies foster a more inclusive work environment, according to Deloitte research.
14. Nearly half of employees think their companies should improve diversity
It’s not enough to look at just one facet of diversity - nearly half of respondents in an Atlassian survey say their companies could do more to improve diversity of gender, race and ethnicity.
15. Nearly one fourth of employees have experienced discrimination at work
24% of employees say they have experienced workplace discrimination in their current role, and 25% say their company is not taking meaningful action to combat it.
“Employers need to pay attention to how ideas about diversity are evolving, especially now that Millennials make up the majority of the workforce. These younger workers expect to work in an environment that encourages all types of voices and experiences, including their own.” ELI
16. Women want diversity and inclusion strategies from their potential employers
Research by PwC shows that 86% of women are seeking employers with diversity and inclusion strategies, compared to 74% of men.
17. Millennial employees think inclusive companies are more innovative
74% of millennial employees believe their organization is more innovative when it has a culture of inclusion, and 47% actively look for diversity and inclusion when sizing up potential employers.
How to promote diversity and inclusion in the workplace
It’s one thing to talk about the benefits of diversity and inclusion, but how can you ensure it becomes embedded in your culture to the benefit of your business - and workforce - long-term?
The first step is to review the policies and measures currently in place to promote diversity, and how they can be improved. Evaluate your hiring practices in addition to things like the current diversity among your management teams, anti-discrimination policies and pay gaps. Where are the weaknesses in your diversity and inclusion efforts, and how can they be strengthened?
But ensuring diversity inclusion and equity long-term requires ongoing education. Once you have a clear understanding of changes that need to be implemented, it’s all about training.
Mobile training tools such as eduMe allow companies to roll out diversity, equity and inclusion training seamlessly and effectively to anyone, wherever they are, enabling companies of any size or kind to raise awareness, highlight and upskill individuals on new policies and ensure a company-wide commitment to creating an inclusive work environment..
Ride-sharing platform Uber recently partnered with eduMe to deliver anti-racism education to 23 million customers, drivers and delivery partners as part of their company-wide pledge to combat discrimination.
Get in touch now to find out how we can help improve diversity and inclusion in your workforce👇
