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What is diversity?
Diversity and Inclusion are often used together in tandem but are both unique terms. Diversity means being composed of differing elements. In a workplace, diversity means that the workforce is made up of employees of different races, genders, career backgrounds, skills, etc. Diversity is proven to make communities and workplaces more productive, tolerant, and welcoming. Inclusion on the other hand is the practice of providing everyone with equal access to opportunities and resources. Inclusion efforts in the workplace help to give traditionally marginalized groups, like those based on gender, race, or even those with physical or mental disabilities, a means for them to feel equal in the workplace. Inclusive actions, like creating employee resource groups or hosting information sessions, make the workplace a safer, more respectful environment for all employees.
Or simply speaking diversity is the presence of differences within a given setting. In the workplace that can mean differences in race, ethnicity, gender, or any other number of things. Inclusion is the practice of ensuring that people feel a sense of belonging and support from the organization.
Advantages of Diversity and Inclusion:
While we all speak of diversity and inclusion, is it advantageous? Today, most of the big companies are marketing themselves as equal opportunity recruiters; they are all branding themselves to have a diverse and inclusive workforce but does it matter? Do diversity and inclusion have any real advantages? The answer to that is yes. A company that has a theme of diversity and inclusion built into its ideology attracts more investors; it induces a sense of trust among its shareholders.
Practicing Diversity and Inclusion provides the following benefits:
- Highly motivated workforce
The first and foremost advantage of having a diverse and inclusive workforce is high morale. A diverse and inclusive environment establishes a sense of belonging among employees. When employees feel more connected at work, they tend to work harder and smarter, producing higher-quality work.
2. Help in achieving ESG targets
Today, ESG has been garnering a lot of interest from investors, organizations, consumers, etc. Having a diverse and inclusive workforce will help the company to perform better on the ‘S’ aspect of its ESG targets.
3. Access to a bigger talent pool
An employee today seeks diversity and inclusion in their workplace. According to a Glassdoor survey, it was found that 57% of employees and 67% of job seekers consider diversity an important element of their workplace, which affects recruitment and retention. Also, by recruiting a diverse workforce you expand your talent pool.
4. Increases trust amongst shareholders
Having an inclusive work environment instills a sense of belonging among the workers. It not only helps develop trust among the shareholders of a company but also among the employees and leadership.
5. Better decision making
Diverse teams make better decisions. A diverse and inclusive team is more likely to represent all aspects of the consumer base and shareholders which results in better decision-making. As per a survey by Cloverpop, diverse teams are found to have a 60 percent improvement in decision-making. In particular, gender-diverse teams outperformed individual decision-makers 73 percent of the time, and teams diverse in geography, gender, and age made better business decisions than individuals 87 percent of the time.
6. Stronger business performance
Greater diversity across genders and ethnicity was strongly correlated to higher profitability and value creation. Ethnically diverse companies are 35% more likely to yield higher revenue, while gender-diverse companies are 15% more likely to yield higher revenue. A Harvard Business Review found that diverse companies have reported 19 percent higher revenue, while as per a report by Mckinsey, every 10 percent increase in the racial and ethnic diversity of a business’ senior-executive team leads to a 0.8 percent increase in earnings.
A study published in the American Sociological Review found that companies with the highest percentage of racial or gender diversity have higher sales revenue, more customers, higher than average market share, and profitability. Overall it is safe to say that a diverse and inclusive company has stronger business performance.
7. Better connection with customers
As per Harvard Business Review, Diverse companies are 70% more likely to capture a new market audience. A diverse workforce is more likely to understand their customer pool better; they are more likely to understand the market need. This simply translates to the fact that they are more effective in forming a bond with consumers and capturing the market better.
8. New perspective and innovations
A diverse group is more likely to come up with an innovative idea as compared to a less diverse group. A recent study by Boston Consultancy Group found a strong, statistically significant positive relationship between diversity and corporate innovation. They found that diversity has an especially positive impact on complex companies. This can be the result of the fact that a diverse and inclusive group sees the representation of a wide spectrum of culture and ideology, which means that they tend to have a much wider field of thinking.
Diversity and inclusion are not only a move in the right direction socially and morally but it is also smart from a recruiting and company growth standpoint. But the thing to remember here is that both Diversity and Inclusion need to go hand in hand. A company that promotes diversity but doesn’t promote inclusion in its strategy can never fully reap the benefits of that diverse workforce.