Diverse and inclusive companies drive innovative results. Yet the tech industry still struggles with diversity and inclusion, often failing to attract diverse talent due to inclusivity issues in the workplace. For organizations looking to shape up their diversity and inclusion programs and policies, the change can be challenging — and rewarding.
Most companies enact change to deliver business value, and many who launch diversity and inclusion initiatives cite research showing that companies with more diverse teams outperform those with a more homogeneous workforce, says Sabrina Clark, associate principal at SYPartners, a consultancy that specializes in organizational transformation.
“Research shows that even just the presence of physical diversity results in better performance and for companies that are data-driven, that extra performance boost can be extremely motivating,” Clark says. “It’s also the fact that companies that lack diversity are being called out publicly, and may even be losing business, not to mention falling behind when it comes to recruiting. Even Google is starting to show signs that their lack of diversity is affecting them.”
As 2018 research from McKinsey shows, greater diversity in the workforce results in greater profitability and value creation. The same holds true at the executive level, as McKinsey found a statistically significant correlation between diverse leadership and better financial performance. Companies in the top quartile for ethnic diversity at the executive level are 33 percent more likely to have above-average profitability than companies in the bottom quartile. When it comes to gender diversity, companies in the top quartile are 21 percent more likely to have above-average profitability than companies in the bottom quartile, according to McKinsey’s research.
While financial performance is a major driver of D&I strategies, some organizations launching diversity initiatives in the face of government compliance regulations or to address shareholder pressure, Clark says. “In the UK, for instance, companies are required to publish their diversity statistics; there’s also been increasing pressure from shareholders and boards,” she says.
Current employees and potential hires are also raising the stakes, says Jeff Weber, senior vice president of people and places at Instructure. “More and more, when we’re interviewing, candidates are asking what we’re doing about diversity and inclusion. And it’s not just diverse talent themselves, and it’s not just millennials or Generation Z — we’re hearing this from white, straight men in the Midwestern United States.”
Organizations are also realizing that make diversity and inclusion a business imperative will help them avoid tarnishing their reputation, Clark says. “They’re thinking ahead, which is great, about what kind of company they are, who they want to be, and what their legacy will be. It’s going to continue to be important, and the voices demanding it are only going to get louder,” she says.