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Making the Business Case for Diversity, Equity & Inclusion (DEI)
By Bonnie Buol Ruszczyk
As I talk to firms around the country, many people are interested in working on making their culture more inclusive, intentionally hiring a more diverse team and looking for ways to create an environment that aims to be more equitable. It is exciting to see firms starting to have these conversations internally, and in some cases, with their clients.
On the flipside, I am commonly asked to make the business case for DEI. Yes, most of us know deep down that it is simply the right thing to do, but the skeptics need more to be convinced. And far be it from me to dissuade anyone from asking questions, particularly when making decisions about something as important as firm culture.
If you are asked for some concrete reasons yourself, here are a few that you can share.
Diverse firms perform better financially
Studies have repeatedly shown that businesses that are more diverse outperform their competitors. In fact, ethnically diverse companies are 35% more likely to have higher financial returns when compared to their respective national industry medians, and gender diverse companies are 15% more likely to outperform their national industry medians. Additionally, companies with diverse leadership teams reported 19% higher revenues. These are substantial numbers that nearly any business would like to see. [1]
Diverse firms attract more – and better – talent
When asked to list key factors that they use when evaluating companies or considering job offers, 67% of job seekers said that working in a diverse environment was important. Whether or not your leadership team is interested in increasing its diversity, your candidates are evaluating your firm on this factor when researching places to work and during the interview process. With many firms desperate to find people, you could be missing out if your team is too homogenous. [2]
Diverse firms are more creative, innovative and grow faster
It turns out that diverse firms are 70% likelier to capture a new market and 45% likelier to report increase market share year-over-year. If you’ve wondered why you seem to have difficulty coming up with new ideas or successfully adding new services or industry niches, a lack of diversity could be one of the reasons why. If most of your leadership team has walked a similar path through life, you are limited in the experience from which you can pull. Keep in mind that diversity is about more than race and gender. You should also be seeking people with different backgrounds, personalities, points of view and thought. Make sure you include these people in your brainstorming and planning meetings too. It is when you have a variety of perspectives in the room that true innovation, and ultimately growth, can happen. [3]
Inclusive firms have more engaged employees
Hiring diverse employees is not enough. If your firm isn’t one that cultivates an inclusive environment, you are only doing half of the work. This is why firms repeatedly see women and people of color leave after a few years; they don’t see a path for growth and don’t feel like they belong. 83% of millennials report being actively engaged when they believe their organization fosters an inclusive workplace culture. (And before you dismiss millennials, remember they are now in their 30s and starting to turn 40 this year.) Engaged employees work harder, are more collaborative and tend to stay where they are; they are exactly the type of employee most firms seek. [4]
Diverse and inclusive firms make better decisions
Teams that are more diverse and inclusive make better decisions up to 87% of the time. They also make those decisions twice as fast and with half the number of meetings and deliver 60% better results. This doesn’t mean you have to wait until you hire more people to take advantage of this. You can start by including more, or different, people in your strategy meetings. While they may not have the same level of experience as your leadership team, they will bring a new and refreshing perspective to the table, allowing you to have new options to consider. As you add new people to your firm, mix up who is included to continue getting fresh viewpoints. [5]
Keep in mind that changing firm culture is hard work and won’t happen overnight. But it is important and worth the effort. If you have questions or want assistance, I am happy to help.