If you’ve ever wondered what the business argument for doing Diversity, Equity and Inclusion work is, here are 15 study-backed results to consider. Obviously we shouldn’t need a financial argument for treating other humans with respect and dignity!

• Companies with more diverse teams outperform those with less diversity. According to research by McKinsey & Company, companies with the most gender-diverse executive teams were 25% more likely to have above-average profitability than companies with the least gender-diverse teams. Similarly, companies with the most ethnically diverse executive teams were 36% more likely to have above-average profitability than companies with the least ethnically diverse teams. (McKinsey & Company, 2020)

• Diverse teams are more innovative and creative. A study by the Harvard Business Review found that diverse teams were better at problem-solving and more likely to come up with innovative solutions than homogeneous teams. (Harvard Business Review, 2016)

• Companies with more diverse workforces are more attractive to job seekers. According to Glassdoor, 67% of job seekers said that a diverse workforce is an important factor when considering job offers. (Glassdoor, 2014)

• Companies that prioritise DEI see improved employee engagement and retention. Research by Deloitte found that inclusive organisations were twice as likely to meet or exceed financial targets, six times more likely to be innovative, and eight times more likely to achieve better business outcomes. In addition, employees at inclusive organisations were more engaged, more likely to stay with the company, and more likely to recommend it to others. (Deloitte, 2020)

• Companies with more diverse workforces have higher levels of employee satisfaction. According to research by Boston Consulting Group, employees at companies with above-average diversity scores were more likely to report feeling happy and satisfied at work. (Boston Consulting Group, 2018)

• Companies with more diverse workforces are better equipped to serve diverse customer bases. A study by the Center for Talent Innovation found that companies with more diverse workforces were better able to understand the needs of diverse customer segments and develop products and services that met those needs. (Center for Talent Innovation, 2013)

• Diversity and inclusion efforts can help reduce the risk of discrimination and harassment claims. According to research by the EEOC, companies that have robust diversity and inclusion programs are less likely to face discrimination and harassment claims from employees. (EEOC, 2016)

• Companies that prioritise DEI initiatives see improved financial performance. According to a study by the Peterson Institute for International Economics, companies with at least 30% women in leadership positions had a net profit margin that was 6 percentage points higher than companies with no women in leadership positions. (Peterson Institute for International Economics, 2016)

• Diverse teams are better at problem-solving. According to a study by the University of Michigan, diverse teams were better able to solve problems than homogenous teams. This was because members of diverse teams brought different perspectives, knowledge, and skills to the table. (University of Michigan, 2006)

• Companies with more diverse boards of directors are more profitable. According to research by Credit Suisse, companies with more women on their boards had higher return on equity (ROE) and higher net income growth than companies with fewer women on their boards. (Credit Suisse, 2016)

• Diversity and inclusion efforts can improve workplace culture and reduce turnover. According to a survey by PwC, 86% of millennials said that they would consider leaving a job if the company’s values did not align with their own. By prioritising diversity and inclusion, companies can create a more positive and supportive workplace culture that is more likely to retain employees. (PwC, 2019)

• Companies that prioritise DEI initiatives are more innovative. According to a study by McKinsey & Company, companies in the top quartile for ethnic and cultural diversity were 33% more likely to have above-average financial returns than companies in the bottom quartile. This suggests that a more diverse workforce can drive innovation and help companies stay ahead of the curve. (McKinsey & Company, 2018

• Diverse teams are more creative. According to a study by the University of Sydney, teams with more cognitive diversity – that is, diversity in thought processes and problem-solving approaches – were better able to generate creative ideas than teams with less cognitive diversity. (University of Sydney, 2014)

• Companies that prioritise DEI initiatives are more resilient. According to a study by Deloitte, companies that focus on building a culture of diversity and inclusion are better able to navigate challenges such as economic downturns and other disruptions. This is because diverse teams are better able to adapt to changing circumstances and find new solutions to problems. (Deloitte, 2020)

• Companies with more diverse workforces are more likely to attract and retain customers. According to a study by the Harvard Business Review, companies with more diverse workforces were better able to connect with diverse customer segments and build stronger customer relationships. This can lead to increased customer loyalty and repeat business. (Harvard Business Review, 2016)

How does your organisation measure up?

References:

1. McKinsey & Company. (2020). Diversity wins: How inclusion matters.
2. Harvard Business Review. (2016). Why diverse teams are smarter.
3. Glassdoor. (2014). Diversity in the workplace is critical to job seekers.
4. Deloitte. (2020). The diversity and inclusion revolution: Eight powerful truths.
5. Boston Consulting Group. (2018). How diverse leadership teams boost innovation.
6. Center for Talent Innovation. (2013). Innovation, diversity, and market growth.
7. EEOC. (2016). Select task force on the study of harassment in the workplace.
8. Peterson Institute for International Economics. (2016). Is gender diversity profitable? Evidence from a global survey.
9. University of Michigan. (2006). Diversity and work group performance.
10. Credit Suisse. (2016). The CS gender 3000: Women in senior management.
11. PwC. (2019). PwC’s nextGen: A global generational study.
12. McKinsey & Company. (2018). Delivering through diversity.
13. University of Sydney. (2014). The relationship between cognitive diversity and team creativity.
14. Deloitte. (2020). The diversity and inclusion revolution: Eight powerful truths.
15. Harvard Business Review. (2016). Why diversity programs fail.