Three Ways D&I Makes Companies Better
Learn about how D&I makes companies better.
Statistics That Prove D&I Makes Companies Better
The world is changing. As new generations begin to take over the workforce, movements like Black Lives Matters and #metoo gather momentum, and the country grapples with a crippling pandemic, companies are waking up to the fact that diversity and inclusion (D&I) is critical to ensuring business sustainability and success.
D&I is more than policies, programs, or headcounts.
According to Gallup, millennials define diversity as everything from cultural, gender, and sexual differences, to thoughts and perspectives. This is an integral part of ESG not only for the real estate industry but for any company out there that wants to be on the edge of D&I.
While diversity and inclusion are two interconnected concepts, they are also uniquely different.
Diversity defines the representation or differences within a given setting, such as race, ethnicity, gender, etc....
Inclusion is a purposeful effort to ensure the presence, perspectives, and contributions of different people are valued and support a sense of belonging from the organization.
This means a workplace could potentially be diverse (different genders, races, nationalities, and sexual orientations) but may not be inclusive, or vice versa.
A diverse and inclusive workplace makes everyone feel equally involved and supported in all areas. These efforts are more than an attempt to make people feel good—they have tangible benefits for both employees and companies such as:
- Greater innovation
- Increased ability to recruit & retain a diverse talent pool
- Higher revenue growth
While these benefits are statistically proven, there’s still a wide diversity gap in today’s workplace.
The Diversity Gap
Leadership in the United States is still decidedly on the side of white males, that’s a fact.
According to McKinsey & Company, 68 percent of C-level executives are white men; 18 percent are white women, 10 percent are men of color and only four percent are women of color.
In fact, more than a third of companies don’t have a single woman on their executive teams.
But, the tides are turning as the U.S. population, and therefore the nation’s workforce is becoming increasingly diverse.
CNN Money reported that, in the 40 years between 1980 and 2020, the white working-age population will have declined from 83% of the nation’s total to 63% while the number of minority workers will have doubled.
In fact, the millennial and Gen Z generations are the most diverse in history.
Of the 87 million millennials in the country, only 56% are white (compared to 72% of the 76 million baby boomer generation members).
A Harvard Business Review study found 78% of respondents said they work at organizations that lack diversity in leadership positions.
According to the study, without diverse leadership, women, people of color, and those who identify as LGBTQ are 20% (or more) less likely than straight, white men to win endorsement for their ideas.
As members of the baby boomer generation reach retirement age and leave the workforce, younger Americans are taking their place and seeking out companies that are focused on and committed to D&I—a shift that brings dramatic benefits for the workplace.
D&I Creates Safe Spaces & Improves Innovation
According to Glassdoor—over three in five workers (more than 60%) in the United States have witnessed or experienced discrimination in the workplace based on age, race, gender, or LGBTQ identity.
For women specifically, only 60% feel they can voice a dissenting opinion without fear of repercussion (versus 80% of men), according to Culture Amp, and the majority of women in the workforce do not feel as though they can succeed.
Fear of discrimination in the workplace is extremely damaging to employee morale, lowers engagement, productivity, creativity, and teamwork. This fear also affects employee safety, wellbeing, and retention.
Equitable employers vastly outpace their competitors by respecting the unique needs, perspectives, and potential of all their team members.
As a result, diverse and inclusive workplaces that make employees feel safe earn deeper trust and more commitment from their employees.
A 2020 McKinsey report notes that “diverse teams are more innovative—stronger at anticipating shifts in consumer needs and consumption patterns that make new products and services possible, potentially generating a competitive edge.”
In a nutshell, when employees feel included, they’re more engaged which has a positive ripple effect on productivity, morale, and trust.
Companies can foster a greater sense of safety and innovation by embracing a learning environment and inclusive culture that ensures everyone in the organization is comfortable with change, reassured by failures or mistakes, and quick to identify new opportunities.
D&I Improves Employee Performance, Engagement & Retention
Inclusive workplace culture is critical for both attracting and retaining a diverse set of talent. The majority of today’s workers—67 percent overall—consider diversity when seeking employment.
According to a Glassdoor survey, 72 percent of women, 89 percent of Blacks, 80 percent of Asians, and 70 percent of Latino respondents said workforce diversity was important to them.
Companies that expand their recruitment searches to more diverse candidates widen the talent selection pool and increase the chances of finding the best hire.
Gartner found that inclusive teams improve team performance by up to 30 percent in high-diversity environments.
People working in inclusive workplaces also tend to have better physical and mental health and take less leave for health issues.
A significant piece of employee engagement boils down to trust.
In their research on company culture, Great Place To Work found that when employees trust that they, and their colleagues, will be treated fairly regardless of race, gender, sexual orientation, or age, they were:
- 9.8 times more likely to look forward to going to work
- 6.3 times more likely to have pride in their work
- 5.4 times more likely to want to stay a long time at their company
Teaching company leaders to recognize the individual talents of their team members and to reward employees for good work can help build trust and create a more inclusive, happier, and more productive workplace.
D&I Improves Company Revenue
While it’s not the be-all and end-all, the company’s bottom line is important.
A 2015 McKinsey report studied 366 companies in the United States and the United Kingdom and found a strong correlation between a company’s higher-than-average diversity (racial/ethnic and gender) and higher-than-average profits, as compared to similar organizations.
Fast forward to 2019, McKinsey found companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than their peers.
Just look at the Fortune 1000 list of companies and you’ll see how important female CEOs are for a company’s success. Of the (only) 5 percent of companies run by women, those organizations contribute 7 percent of the total revenue of the Fortune 1000 list.
Those companies also outperform the S&P 500 index.
In short, women in leadership are good for business.
Fast Company backed this up by reporting higher representation of women in C-suite level positions results in 34 percent greater returns to shareholders.
There’s no question that D&I initiatives are good for business. Creating an inclusive workplace and company culture where employees feel respected, valued, and safe isn’t just common sense—it’s good for your company’s bottom line.
Statistics like these provide why companies should make D&I a top priority. D&I initiatives make workplaces smarter and more successful and contribute to increased job satisfaction, employee retention, and revenue.
Companies that build strong D&I programming early and continue to build on their efforts will have a business advantage.
Elevating existing diverse talent, building an inclusive culture, enhancing recruitment efforts to engage diverse applicants, and creating dedicated D&I programs should become foundational business practices.
The more intentional a company can be the better. Fostering diversity and inclusivity is more than just the right moral decision—it’s one of the best decisions a business can make to ensure longevity and success.