What is diversity in the workplace? It means thinking about representation in your company by people of different genders, races, ethnicities, nationalities, faiths and political opinions. It includes those with disabilities (physical or mental, hidden or otherwise), and people who identify as LGBTQ+. There is also a social mobility element, including people from non-traditional or non-academic backgrounds: for example, would you consider job applications from people who left school early or don't have a college degree? Could you make allowances for a single mom who needed flexible hours and remote working? What about someone close to retirement age who could bring a lot of experience to your firm but only wanted to work part-time?
But inclusivity is not just about who you hire, it's also about who your customers are. Having an inclusive company culture can enhance your reputation in the eyes of younger consumers who want to spend money with socially responsible 'human' brands that share their values.
What are the benefits of diversity and inclusion in the workplace, and why is it important? It can foster creativity and innovation in a business, as a broader range of employees bring their own unique skills and perspectives to the table. A 2018 study from Boston Consulting Group found that companies with above-average diversity scores reported innovation revenues that were 19 percentage points higher than those with below-average diversity. (The study surveyed employees at more than 1,700 companies in eight countries across a variety of industries and company sizes.)
An inclusive culture creates a sense of belonging in a company where people feel free to be themselves (the buzzword is 'authenticity'), and this could mean better staff retention rates. There is also a growing stack of evidence that it actually improves profitability and long-term value creation.
In "Delivering Through Diversity," a 2018 report from consultancy group McKinsey, the links between embracing diversity, enabling growth and gaining a competitive advantage were examined. (The report was based on publicly available data from 1,007 companies across 12 countries globally.) The study flagged up a correlation between diversity and company financial outperformance. It found that companies in the top quartile for gender diversity on their executive teams were 21% more likely to have above-average profitability than companies in the fourth quartile, while those in the top quartile for ethnic and cultural diversity were 33% more likely to outperform. McKinsey suggested that more diverse companies are better able to attract top talent and to improve their customer orientation, employee satisfaction and decision-making.
So how can small businesses foster a culture which attracts a broader customer base and a diverse range of talented people into leadership roles? Firms can make progress on inclusion very rapidly with the right set of initiatives, suggests the report from McKinsey, although it notes that embedding inclusion in an organization can take years. An inclusive culture comes from the top, so the C-suite needs to be on board and understand the importance of building a diverse business for the long term. Here are a few ways you could try to boost diversity in your firm:
- Appoint a diversity champion to organize events which celebrate diversity, arrange talks from inspirational people from minority communities and monitor workplace culture to create inclusive policies and prevent discrimination.
- Use different channels including social media to advertise your job vacancies to a wider pool of potential candidates.
- Make sure you have a good range of resumes before you start the interview process.
- Ask your staff for regular feedback on workplace culture and how happy and secure they feel.
- Think about ways to link up with other businesses running diversity initiatives you admire. You could learn practical lessons from those that are already walking the walk on diversity.
An inclusive culture comes from the top, so the C-suite needs to be on board and understand the importance of building a diverse business for the long term.
Creating a culture of openness and inclusivity in the corporate world can help transform society and the values people hold. This is why diversity is good for the world, as well as your company's bottom line.
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