Why Diversity, Equity, and Inclusion Are a Key Factor in Business Success

Last Updated: 

November 23, 2023

Why Diversity, Equity, and Inclusion Are a Key Factor in Business

The diversity, equity, and inclusion quotient in a business are now one of the greatest predictors of its success. For those looking to delve deeper into the concepts and practical applications of diversity in the business environment, this diversity, equity and inclusion article offers a comprehensive overview. It provides valuable insights into how businesses can foster a more inclusive and equitable workplace, which is instrumental in driving business success.

Studies show that companies with sound DEI policies are now enjoying 2.5 times higher cash flow per worker. 

The fact is that groups once touted as “minorities” will reach majority status by 2044. For instance, people who identify as white and non-Hispanic in the US are steadily decreasing. In 2010, they made up 63.7 percent of the population. By 2020, this percentage has fallen to 57.8, and a downward trend is observable.

There is a second reason why DEI should be given due importance: three in four jobseekers prefer this type of company, refusing to work for organisations in which gender inequality, discrimination, and poor accessibility interfere with a worker’s comfort and ability to do their job.

If you have a business, and you are wondering how improving your DEI policies can make a difference to the achievement of your goals, read on.

Key Takeaways on Why Diveristy and Inclusion are Important for Business Success:

  1. Choosing where to incorporate: Select a city known for accessibility to reduce expenses associated with accommodating installations for diverse employees. Top cities for this include Pittsburgh, Overland Park, Denver, Minneapolis, Hunting Beach, St. Louis, Scottsdale, Columbia, Philadelphia, and Virginia Beach.
  2. Diverse management team: Companies with diverse management teams have higher revenue. Ensure your management team includes gender and ethnic diversity, people from various cultural and religious backgrounds, people with disabilities, and an equal percentage of men and women.
  3. Improving accessibility: Only 21.3% of persons with a disability were employed in 2022. To increase accessibility, organisations should identify and change processes that support unconscious bias, provide employee training, network with local community groups, develop disabled talent, include disability in standard KPIs, and explore the link between inclusive design and innovation.
  4. DEI benefits: Diversity, equity, and inclusion contribute to business success by fostering creativity, innovation, attracting top talent, improving decision-making, enhancing customer satisfaction, and building a positive brand image.
  5. Creating a diverse workplace: Implement inclusive hiring practices, provide diversity and inclusion training, establish employee resource groups, promote diverse leadership, and actively seek and address employee feedback.
  6. Measuring DEI success: Track KPIs such as workforce diversity metrics, employee engagement and retention rates, promotion and leadership representation rates, and feedback from employee surveys.
  7. Promoting DEI beyond the workplace: Support diverse suppliers, engage in community outreach, and advocate for policies promoting diversity, equity, and inclusion in the broader society.
  8. Overcoming DEI challenges: Prioritise education, communication, and buy-in from leadership. Be prepared to make ongoing adjustments based on feedback and performance metrics.
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Choosing Where to Incorporate

If you are launching an LLC that is characterised by its diversity and inclusivity, considering the best city to incorporate is key. This is especially true if you will be requiring offices, manufacturing plants, and other stations where employees will be carrying out their tasks. 

Opening your business in a city known for its accessibility features is an excellent way to reduce the expenses associated with accommodating your installations for all employees. 

A comprehensive study by Wallethub suggests that cities with the highest aggregate score in this sense are Pittsburgh (Pennsylvania), Overland Park (Kansas), Denver (Colorado), Minneapolis (Minnesota), Hunting Beach (California), St. Louis (Missouri), Scottsdale (Arizona), Columbia (Maryland), Philadelphia (Pennsylvania), and Virginia Beach (Virginia). 

Ensuring Your Management Team is Diverse

A Boston Consulting Group study has shown that companies with diverse management teams have a 19 percent higher revenue compared to less diverse organisations. Organisations should look at their top management team and ensure it includes gender and ethnic diversity, as well as people from various cultural and religious backgrounds, people with disabilities, an equal percentage of men and women, and more.

You only need to look at the gender gap to see how your organisation may be missing out on the vital input of some groups. As of 2022, for instance, women make up almost half of overall US employees, but their wages equal 83.1 percent of men’s wages and men are twice as likely to be hired, regardless of the hiring manager’s gender. DEI policies should be clearly defined and should tackle key aspects such as hiring, salaries, management percentage, frequency of pay raises, and more.

Accessibility Is in Dire Need of Improvement

In 2022, only 21.3 percent of persons with a disability were employed, as per the US Bureau of Labor Statistics. 

Across all age groups, these employees are far less likely to obtain work than those with no disability. Moreover, in 2022, some 30 percent of workers with a disability worked part-time, compared to 16 percent of those without a disability. 

Organisations need to identify and change processes that support unconscious bias. Employee training is also key, so that workers understand the challenges that their disabled colleagues may face. 

Companies can boost the numbers of disabled employees in their organisations by networking with local community groups, developing disabled talent beyond the hiring stage, including disability in standard key performance indicators, and exploring the vital link between inclusive design and innovation.

Conclusion

Building a diverse, inclusive organisation is no longer simply a way to increase revenue. It is also a way to attract top talent and mark your organisation as a standard-bearer. In order to ace their DEI strategies, companies need to analyse their procedures, make necessary changes, and consider improvements to everything from their key performance indicators to their office design.

Frequently Asked Questions: Diversity and Inclusion in Business

Diversity, equity, and inclusion (DEI) play a vital role in driving business success and fostering a healthy work environment. As more businesses recognise the importance of DEI, many questions arise about its implementation, impact, and best practices. To help you better understand the significance of DEI and how to integrate it into your organisation, we have compiled a list of frequently asked questions and provided insightful answers to guide you on your DEI journey.

What is diversity, equity, and inclusion (DEI)?

Diversity, equity, and inclusion refer to a set of principles and practices that promote a diverse workforce, ensure equal access to opportunities and resources, and create an inclusive environment where all individuals feel valued and respected.

How does DEI contribute to business success?

DEI contributes to business success by fostering creativity and innovation, attracting and retaining top talent, improving decision-making and problem-solving, and enhancing customer satisfaction and loyalty. It also helps in building a positive brand image and mitigating legal and reputational risks.

How can businesses create a more diverse and inclusive workplace?

Businesses can create a more diverse and inclusive workplace by implementing inclusive hiring practices, providing diversity and inclusion training, establishing employee resource groups, promoting diverse leadership, and actively seeking and addressing feedback from employees.

What are some examples of inclusive hiring practices?

A4: Inclusive hiring practices include using diverse job boards, implementing blind recruitment processes, offering flexible work arrangements, and standardising interview questions to ensure that candidates are assessed fairly and objectively.

How can businesses measure the success of their DEI initiatives?

Businesses can measure the success of their DEI initiatives by tracking key performance indicators (KPIs) such as workforce diversity metrics, employee engagement and retention rates, promotion and leadership representation rates, and feedback from employee surveys.

How can businesses promote diversity, equity, and inclusion beyond the workplace?

Businesses can promote DEI beyond the workplace by supporting diverse suppliers and vendors, engaging in community outreach and partnerships, and advocating for policies and legislation that promote diversity, equity, and inclusion in the broader society.

What are some common challenges businesses face when implementing DEI initiatives?

Common challenges include resistance to change, lack of understanding or awareness, limited resources or budget, and difficulty in measuring the impact of DEI initiatives. To overcome these challenges, businesses should prioritise education, communication, and buy-in from leadership, and be prepared to make ongoing adjustments based on feedback and performance metrics.

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