This edition of The Oswald Letter is a guest post from Elizabeth Petersen, Project Director for Simplify Compliance.
While few American businesses self-report on diversity data, workplace discrimination and inclusion are near-daily topics in the media.
In the real world, diversity and inclusion may feel nebulous—nice-to-have goals—but they can easily become deprioritized when weighed against the many other pressing demands of day-to-day organizational operations. However, the call for diversity is becoming louder (especially with younger generations), and the evidence that diversity plays a critical role in business success is mounting.
To underscore the criticality of workplace diversity, let’s take a look at how inclusion and diversity are tied to corporate performance.
- Employee engagement. A study by Deloitte found that 83% of Millennials are actively engaged when they feel their organization is dedicated to inclusion. (And don’t be so quick to dismiss the opinions of Millennials—they will account for 75% of the workforce by 2025.)
- Recruitment and corporate reputation. Sixty-seven percent of respondents in a Glassdoor survey indicated that an organization’s commitment to diversity plays a factor in evaluating companies and job offers. And not only are companies with a commitment to inclusion more attractive to diverse candidates, but they also offer a compelling story to nonminority candidates who want to work for progressive organizations (one researcher calls this the “halo effect”).
- Improved problem solving. A study published in Economic Geography found that organizations with diverse management teams were more likely than less diverse companies to introduce new product innovation. A paper coauthored by an MIT economist found that social diversity expanded the skills of a group and led to more robust innovation practices. The author used a baseball analogy to underscore her point: “A baseball team entirely composed of catchers could have high esprit de corps. But it would not perform very well on the field.”
- The bottom line. There’s a compelling “money talks” argument for diversity: A McKinsey study found that companies with diverse executive boards had 58% higher earnings before interest and taxes and a 95% higher return on equity than businesses with nondiverse boards.
While I’ve thrown a bunch of statistics and studies at you, qualitative and emotional statements on the importance of diversity and inclusion are equally as compelling. One of the most effective testimonies to diversity I’ve ever heard was given by a wildly successful entrepreneur. She recounted that she ultimately ended up leaving an organization because she grew tired of the homogenous corporate culture—especially at the leadership levels. That company ended up losing a passionate, talented employee (and ultimately her million-dollar ideas) because of its head-in-the-sand approach to corporate diversity.
As always, I want to hear from you: What does diversity and inclusion mean to you? Why is it important in the workplace? And most critically, what should companies be doing to demonstrate their commitment to diversity and inclusion?
Elizabeth Petersen is a project director at Simplify Compliance. Before her current role, Elizabeth oversaw Simplify Compliance’s healthcare division, HCPro. She also has held roles in HCPro’s sales, product management, and content development departments. Before joining HCPro, she held editorial positions at JBLearning and CCI Communications. Elizabeth lives in the North Shore of Massachusetts with her husband and son and is passionately interested in corporate culture, innovation, women’s leadership, and caffeine.