Career

How (and why) to strengthen your workforce with diversity and inclusion

different colored pencils

Ask any management-level worker how they feel about diversity, and they’ll likely tell you they’re all for it. But if you were to ask that same person to help develop a successful diversity initiative at their company, they (at best) would not know where to begin, or (at worst) would be resistant to it—perhaps because of unconscious biases, or they want to operate the way they always have, or they believe all the resources and effort it takes isn’t worth it in the long run.

Kelly Pope, Becker instructor and accounting professor at DePaul University in Chicago, recently tackled this complex subject via webinar. As it turns out, increasing diversity in a corporate environment is much more than just the right thing to do. Studies show that diversity actually improves a company’s bottom line, for many reasons.

We’ll get into those reasons as you read on. But to start, let’s talk about diversity and inclusion.

Diversity and Inclusion: What’s the Difference?

Simply put, diversity is the qualities we have that distinguish us from others. There can be primary dimensions of diversity (race, ethnicity, sex, age, disability) as well as secondary ones that are much easier to change (religion, culture, political orientation, family status, lifestyle, education, nationality).

If diversity is composed of qualities, inclusion is the environment. A place that encourages and promotes diverse talents, connections and ideas by welcoming people who were historically excluded is an inclusive environment.

As Verna Myers put it, you can think of diversity as an invitation to a party, and inclusion as being asked to dance.

The case for diversity: It matters now more than ever

Younger generations like Millennials and Generation Z can broaden the definition of diversity to include tolerance and inclusiveness, respect for individuality, open-mindedness and different ways of thinking. You might be able to hire them by talking about how much you value diversity, but you very likely won’t retain them unless your words are backed up by actions.

Simply talking about diversity as a core value of your organization is not effective. You need to walk the walk. You must actively work to improve the diversity of decision makers stakeholders. Real change and real evidence is what Generation Z and Millennials are looking for.

The case for diversity: Business benefits

Achieving workplace diversity often requires a significant investment of effort and resources, and many companies halt diversity initiatives because of that investment. They believe there’s not enough value in it. Well, not only is there value, but diversity actually helps companies thrive. Here’s how.

  • First, companies can recruit from a broader pool of applicants. This increases the odds of finding high performers who might be overlooked by other companies.
  • A diverse workforce is also tied to better employee retention rates. Studies show that turnover is reduced when employees perceive equal access to opportunities and fair treatment.
  • A diverse workforce produces more innovative and creative solutions. Boston Consulting Group found that companies with above-average diversity on their management teams reported 45% of their total revenue as coming from new products and services launched in the past 3 years, versus only 26% from companies with below-average diversity in management.
  • Studies have also shown that heterogeneous teams are more creative than homogeneous teams. Homogeneous tends towards group-think and encourages cohesiveness over creative results. Diverse teams, meanwhile, encourage an active exchange of ideas, which leads to creative problem solving.
  • Finally—and this is a big one—a diverse workforce is more productive than a homogeneous one. A study by McKinsey & Company looked at companies in the top quartile for various dimensions of diversity on their executive teams. They found companies with gender diversity were 21% more likely to experience above-average profitability than companies in the 4th quartile for gender diversity.
  • For ethnic and cultural diversity, this difference jumped to a 35% likelihood of outperformance. Other studies have suggested that a 1% increase in diversity in the workforce can lead to as much as a 9% increase in performance (as measured by sales revenue, market share, etc.). Diversity can be an explosive, exponential catalyst for growth.

The challenges

A new diversity initiative should plan to deal with bias within the company before implementation. Creating a more diverse company involves a top-to-bottom change in company culture, which existing employees don’t always appreciate.

  • An unconscious bias is a stereotype someone can form about a group of people without even being aware of its existence. They’re far more common than conscious biases, and because they are far more common than conscious ones, they will present a greater challenge to forming a diverse workforce.
  • Unconscious biases often manifest in the hiring process. For example, research has demonstrated that hiring managers are 14% less likely to call back applications who have names that sound African American. A similar bias exists against women, both in hiring and advancement within a company.
  • Some employees might resist cultural changes because of explicit bias, or because they want to keep things the way they were.
  • Diversity programs that incorporate mandatory diversity training can lead to pressure or negative messages, leading to retaliation
  • Employees may also begin to believe that rewards and favor within the company are based on dimensions like race or gender rather than ability. This can create an overall loss of morale.
  • Managers may resent intrusive diversity requirements or quotas for their teams.
  • As a workforce becomes more diverse, it’s possible that conflicts arise from time to time. This might be due to differing cultural norms or differences in values, opinions or perspectives. While many disagreements resolve themselves without substantial issues or intervention, you should nevertheless have a standard policy in place to address more significant disputes.

Diversity initiatives can be sabotaged by unconscious bias from people involved in the hiring process. Management should consider this and address it when developing an action plan.

Also, be sure to appropriately structure diversity initiatives, training programs and metrics to ensure employees understand that rewards and promotions are based solely on performance rather than diversity characteristics.

Know the benefits, preach the benefits

It’s not easy for people to change, and adapting to a diversity program that previously did not exist is no exception. It takes plenty of time and money to successfully implement and maintain a diversity program, and all those resources are an easy thing for naysayers to point fingers at.

So, be ready to do more than promote the initiatives. Make sure you consistently educate staff on the benefits of having a more diverse workforce. Increases to productivity, profitability, innovation and marketability are all likely outcomes, which in turn improve opportunities and compensation for all workers.

Learn more about strengthening your workforce through diversity and inclusion with the Becker CPE webcast.