The Importance of Diversity and Inclusion in Business

Businesses worldwide are taking a long, hard look at their diversity and inclusion (D&I) policies and how to make them better. Creating an inclusive work environment, whether it’s face-to-face or work from home, is an important step to creating a more equitable and encouraging workplace.

A McKinsey & Company report states that “companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability. That this relationship continues to be strong suggests that inclusion of highly diverse individuals — and the myriad ways in which diversity exists beyond gender (LGBTQ+, age/generation, international experience) — can be a key differentiator among companies.” Diversity and inclusion are more than just policies and initiatives.

The Vice Provost for Equity and Inclusion, Chief Diversity Officer, and the Charles D. Moody Collegiate Professor of Psychology and Education at the University of Michigan, Dr. Robert Sellers, explains: “Diversity is where everyone is invited to the party, equity means that everyone gets to contribute to the playlist, and inclusion means that everyone has the opportunity to dance.”

Diversity is about hiring all people on a team — regardless of race, ethnicity, gender, age, disability, sexual orientation or religious practice. Equity guarantees that everyone has the same opportunities, and inclusion is welcoming and acknowledging each employee and giving them a voice to impact the institution.

How Does a Diverse Workforce Affect Business Outcomes?

Besides financial benefits, a diverse workforce inspires fresh and exciting ideas and stimulates innovation. When employees feel as though they are accepted and treated fairly, they are fulfilled by their work, more apt to stay at the company and look forward to working every day. Employees report less stress and better mental and physical health when they feel like they belong. One study has shown that improved diversity and reduced isolation in the workplace contributed to increased employee productivity.

Workplace diversity and inclusion promote employees from different backgrounds and experiences to share their unique skill sets and knowledge base. By having various viewpoints and perspectives, businesses can succeed in a competitive market. According to Deloitte, Millennial employees are inclined to stay longer at businesses that encourage and support a diverse workforce.

What Can Companies Do to Become More Inclusive?

Hiring a diverse and inclusive workforce is just the beginning. Companies must ensure that people from varied backgrounds, ethnicities, genders and races are found in executive positions and promoted into management. A few ways that businesses can incorporate diversity and inclusion initiatives are:

  • Provide an inclusive environment. Providing a sense of belonging to employees goes a long way. Having a workspace that hears and values opinions, suggestions and ideas from employees of differing backgrounds, experiences and perspectives creates a depth of expertise. When employees can be themselves, they will flourish.
  • Eliminate culture fit. Hiring employees based on cultural fit often results in rejecting prospective candidates due to unconscious bias. Blind interviews and a set list of questions for every interviewee will help eliminate any bias.
  • Create space. By creating space for underrepresented employees to gather, collaborate and connect, the business will benefit from their unique viewpoints.
  • Promote communication. By using communication software, companies can provide a way for employees to engage and communicate with one another by promoting inclusion.
  • Stay accountable. It may be slow going at first, but keeping everyone accountable for inclusivity is important. When employees are empowered to speak out against bias and are encouraged to respect each other, everyone benefits.

Learn more about Lamar University’s online Bachelor of Business Administration in General Business program


Sources:

Deloitte: A Call for Accountability and Action

Dissertation: Relationship of Organizational Celebrations to Employee Relationships in Creating a Culture of Community

McKinsey and Company: Delivering Through Diversity

Science Direct: Relationships at Work and Psychosocial Risk: The Feeling of Belonging as Indicator and Mediator

Workhuman: The Why Behind DEI: How Diversity, Equity, and Inclusion Initiatives Benefit Business

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