By 2025 the global population will reach over 8 billion people, increasing global diversity and demand for innovative solutions to declining natural resources. It’s no wonder then that 73% of executives believe DEI is a moral and business imperative that drives profit. (The Diversity Movement)
Recent disruptions in environmental, social, and economic areas emphasized the need for more agile systems. This is true on the operational, technical, managerial, and even leadership levels. That’s because diverse perspectives yield more creative approaches, and provide necessary insights to improve decision-making.
In fact, “highly inclusive companies are more likely to hit their financial target goals by up to 120%”. (Forbes) Which explains why a 2021 study by Driver Research indicated that 57% of employees want to see their companies increase diversity.
A well-defined and structured Diversity, Equity, and Inclusion (DEI) program can catalyze powerful changes. Below we highlighted four key reasons why organizations need to implement DEI, especially businesses that want to thrive, despite market uncertainties.
Businesses continue to look for new opportunities by expanding their services, products, and the communities they work with. Having team members that can relate to and understand the needs of the target audiences is crucial for delivering results that add value.
“Teams are 158% more likely to understand target customers when they have at least one member who represents their target’s gender, race, age, sexual orientation, or culture.” (15five) Such DEI benefits are visible across all organizational levels.
Companies with greater gender diversity among managers generate 34% of their revenue from innovative products and services when examined for a three-year period. (BCG) While organizations that rank in the top quartile for gender diversity in the executive team are 25% more profitable. (McKinsey)
Demonstrating that diversity is critical for teams and integral for financial performance.
It’s no surprise then that companies that are ethnically and culturally diverse are 43% more likely to experience higher profits. (Workplace Testing)
Diversity alone is not enough. Without instilling a sense of inclusion and belonging, the benefits of a multicultural and representative team might not be activated. Which can lead to a corporate culture that doesn’t support the full potential of employees.
In 2019, Catalyst conducted a survey that found how inclusion impacts overall work experiences. Results showed that experiences of inclusion explain 49% of team problem-solving, 35% of employee work engagement, 20% of the employees’ intention to stay, and 18% of employees’ ability to innovate and generate new approaches to reach work goals. (Catalyst)
Given the trend of ‘the great resignation’ or the ‘turnover tsunami’, knowing how to attract and retain the right talent will be of utmost importance for companies. It’s interesting to note that, even before the pandemic, Gallup estimated that voluntary turnover costs U.S. businesses nearly $1 trillion each year. (Gallup)
This is a fixable problem, as the Gallup study also showed that 52% of those who voluntarily left their positions said their managers could have changed their decision.
Since the start of the pandemic, over 40% of U.S. employees across seniority levels reported declines in their mental health.
Providing resources (deploying training, organizing support groups, launching employee networks) to strengthen connections, and building trust can help alleviate some of the stressors that could push individuals to quit their job.
Prior to the pandemic, underrepresented groups were already expressing sentiments implying that work factors cause a decline in their mental health.
A 2019 study found that millennials were 3.5 times more likely than Boomers to share that work environments contribute to their mental health symptoms. 80% of transgender employees shared the same belief compared to 37% of overall respondents.
Trends show that 50% of Millennials, 75% of Gen Z, 47% of Latinx and Black employees, and 90% of transgender employees have left previous roles due to, at least in part, to mental health reasons, compared to 34% of all respondents. (Forbes)
Demonstrating that the needs of underrepresented groups vary, and that blanket resources or training courses are not enough to adequately address stressors for minority groups.
Following the nationwide outrage over the death of George Floyd, 78% of Americans between the age of 18-34, and 48% of those over 55, want brands to speak out against systemic racism. (Sustainable Brands)
Companies that fully embrace anti-racism and inclusivity work can demonstrate to customers that decision-makers are not simply reacting to external changes, but are making system-level changes to adapt to new global realities.
In order for companies to fully understand the topics that matter most to their internal and external stakeholders, businesses need to conduct a materiality assessment (link to the other blog post). Which will outline the landscape of the top issues or areas that a business needs to consider and address through their short, mid, and long-term strategic approaches
It’s clear that DEI is not just a buzzword, but an integral part of an innovative, successful, and thriving business. Companies that know how to access the full potential of their employees will not only outperform their competitors but increase retention and experience financial success.
If your company wants to learn more about how to implement DEI in your organization, please contact Domoto. Let us share our extensive experience in helping you embark on this important and transformational journey. To learn more, please take a look at some of our past case studies.
