It is commonly accepted that businesses who strive to increase workplace diversity and inclusion (D&I) are doing something that is morally praiseworthy or even obligatory. What often goes unrecognized, however, is that workplace D&I is also good for business. For example, McKinsey & Company stated in their most recent analysis of the value of diversity in the workplace that “companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. Similar results were found for cultural and ethnic diversity with the “top-quartile companies outperform[ing] those in the fourth one by 36% in profitability.”
So, what is it about diversity that leads to profitability? While there may be no single feature that makes D&I good for business, there is considerable agreement among scholars that it has something to do with the effect of diversity on the ability of groups to problem solve. For example, in a study led by Professor Stefan Krause from Lübeck University on the effect of group diversity on “swarm intelligence,” it was found that adding diversity to a group can be more beneficial than adding expertise. The upshot of this is that, in addition to being supported by the field experiments examined by McKinsey & Company, the business value of workplace D&I is bolstered by underlying theories about the connection between diversity and profitability, which emphasize the effect that diversity has on the ability of groups to problem solve.
Four Tips For Creating A More Diverse And Inclusive Workplace
Some plans for cultivating a diverse and inclusive workplace are better than others. Below are four suggestions for ensuring that your company’s workplace inclusion plan is successful.
- Diversify your applicant pool: Ultimately, a more diverse workplace cannot be created without more diverse hires. However, many employers may feel that there is no obviously effective and acceptable method for ensuring that more diverse hires are made over time. For example, some companies might not want to include diversity in their “hireability calculations.” Hiring committees can get around this by expanding their hiring pool, thereby increasing the chances that they receive more diverse applications. With a more diverse set of candidates in hand, companies can produce a more diverse workforce by evaluating applicants “objectively” and without having to include diversity as a measure of a job seekers value.
- Pay close attention to under-represented voices: In addition to emphasizing the business value of having a diverse workforce, McKinsey & Company argue that it is unreasonable to expect increased diversity to lead to increased profits without adequate concern being given to the unique experiences, beliefs, and desires of those employees who belong to under-represented groups and who have been hired in the name of diversity and inclusion. While there are far too many areas to cover here, one topic that is particularly important is mentioned by benefits leader Andrea Trudelle in her interview with Human Resources Executive. Trudelle discusses the risks that come with creating benefits plans that fail to take into account the fact that people of color are disproportionately affected by certain illness, like lupus and sickle cell anemia. In particular, she states that “when conversations around benefits design are primarily led by and focused on majority populations—white men and women—employers run the risk of deepening inequities.” To combat this, employers should devote time and attention to listening to what under-represented voices in their companies have to say about their health care needs.
- Focus on the ethical case for D&I: Just because it has become clear that there is a strong business case to be made for creating or increasing workplace D&I doesn’t mean that the ethical case can be set aside when formulating your company’s workplace D&I program. This is, at least in part, because employees want their employers to care about the moral reasons that support D&I initiatives. For example, The Washington Post reported that many millennials and Gen Z professionals won’t work at companies that are not “committed to confronting systemic racism […] sexism […] and other-isms.” This suggests that in order to reap all of the monetary benefits of a diverse and inclusive workplace, a company’s fight for D&I cannot be wholly motivated by a desire to obtain these benefits. Instead, their efforts must, to some degree, be the result of a recognition that by creating a more diverse and inclusive workplace, they can combat racism and discrimination. When not motivated by these distinctly moral concerns, D&I initiatives may come off as insincere and even exploitative, causing many job seekers to look elsewhere. As a result, employers should always bear in mind the ethical case for workplace D&I.
- Hire a diversity advocate: As has likely become apparent by now, there is a lot to do and to think about when creating and overseeing a successful D&I initiative. This is why many large organizations hire a diversity advocate whose only job is to manage their D&I programs. If this is an option for your company, be sure to look for someone who is committed to addressing systemic inequities through workplace diversity and who will ensure accountability on diversity goals.