The Business Case for Diversity and Inclusion in the Workplace

For businesses to incorporate diversity and inclusion policies into their strategy, managers must cultivate a unique set of skills to develop a truly diverse and inclusive workplace with empowered employees. 

We’re not shy about addressing the tough topics around diversity and inclusion, as we believe they should be normalised to enable us to have open discussions with employees, managers and members of the c-suite to ultimately make better business decisions. 

Why diversity and inclusion in the workplace is more important than ever.

Even though the people of an organisation may have many interests and skills in common, our individual identities and varying perspectives make us different in many ways. This is why diversity and inclusion are such a pivotal part of our work lives. Diversity is the recognition of differences and the acknowledgment of the benefits of a range of perspectives, and inclusion is the practice of valuing these differences to enable everyone to thrive at work. 

70% of companies believe they are effective at attracting and retaining diverse employees, yet only 11% actually understand what true diversity means.

This disconnect is apparent when looking at the Fortune 500 companies, of which just 24 (5%) have a female CEO. Among the 500 CEOs, only three are black, another three are openly gay, and one identifies as a lesbian. 48% of African American women and 47% of Latina women have reported being mistaken for administrative or custodial staff, and job applications with African American, Asian, and Hispanic names are statistically less likely to get callbacks for interviews. In Western society, many of these discriminatory behaviours stem from the systemic, institutionalised centering of whiteness. This bias is so deep-rooted that any deviation from Western standards of dress, vocabulary, or names, is seen as ‘unprofessional’.

Diverse teams bring the collection of their experiences to the table, which is especially valuable for customer-facing companies who need their team to represent the people they serve.

Companies that are gender, age, and ethnically diverse make better decisions up to 87% of the time, and inclusive workplaces foster enhanced employee wellbeing, showing that the commercial benefits of diversity are irrefutable.

The impact of poor diversity and inclusion on employee wellbeing 

It’s undeniable that a lack of diversity and inclusion policies and beliefs in the workplace can have a detrimental effect on employees’ mental health and wellbeing. When individuals feel they have to hide or mask core parts of their identity at work, it can take a toll on their motivation and performance at work, their self-worth, and their potential.

This can also adversely affect future employment opportunities due to lack of confidence, and may result in failure to recognise their abilities, as well as feelings of invisibility and isolation. Over time, these feelings of alienation and withholding can take their toll on an employee's mental health.

For the organisation, a lack of diversity and inclusion initiatives can lead to poor employee retention and high turnover rates, along with serious reputational damage. A study of individuals who have experienced workplace bias revealed that 33% feel alienated, 34% withhold ideas and solutions, and 80% would not refer people to their employer.

‍The positive impact of diversity and inclusion on wellbeing

Diversity and inclusion practices and employee wellbeing are intrinsically linked and have a number of positive effects on each other. Inclusive workplaces support a positive self-concept, and when employers celebrate and value each of their team’s unique identities, the employee’s self-esteem is boosted. Workplaces that value diversity also support professional achievement and experience an increase in job satisfaction, with workers in inclusive teams being twice as likely to receive regular career development opportunities and ten times more likely to be successful in these opportunities than workers in non-inclusive teams.

If employees are able to feel a greater sense of belonging and community in their workplace due to inclusive practices, they benefit from better connections with other members of their workforce, meaning they’re more comfortable asking for help and providing emotional support to each other. This, in turn, reduces workplace stress levels and enhances shared employee culture.

While inclusion and diversity drives wellbeing, the reverse is also true. A self-affirming, happy workplace will see a decrease in prejudice, discrimination, and harassment, and employees with lower levels of stress are less likely to rely on stereotypes or ‘us and them’ social biases to formulate their responses. Having a diverse and inclusive workplace can significantly improve business performance and help the organisation succeed in the global marketplace. According to the McGregor-Smith Review,

£24 billion could be added to the British economy by realising the full potential of black and minority ethnic individuals.

Cultivating a D&I culture, what skills and systems are needed?

To reinforce diversity and inclusion within a business, management has to be equipped with the correct skills training. One of the first steps is to recognise systematic bias and address the discrimination that exists in our culture.

Managers can do this by listening to their teams and maintaining open and proactive communication. This process requires empathetic leadership; by tuning into empathy, they can relate to feeling excluded, shamed, or interrupted and identify these same feelings and behaviours within their workplace. For change to happen throughout an organisation, every individual leader has to buy into the value of belonging and be able to explain why diversity and inclusion matters.

When embarking on the recruitment process, businesses should avoid promoting ‘cultural fit’. Despite this theory being popular with employer brands, it can result in exacerbating subconscious biases. A cultural fit assimilates employees to a dominant norm by rewarding desired characteristics and penalising any deviance from them.

‍ Research has found that 75% of employees mask or downplay their differences at work, with 60-67% stating it is detrimental to their sense of self.

There are technology solutions that aim to eliminate workplace biases within the recruitment process, such as pymetrics and Applied. These platforms help build diverse workplaces by using AI and data to drive fair recruitment, removing any opportunities for bias. 

Extensive training and coaching should address not only conscious prejudice but also unconscious bias, which is far more prevalent. Unconscious biases can be disguised as a ‘gut feeling’, and are often based on embedded prejudice resulting in predetermined judgements. Training to identify and eliminate these biases involves exposing stereotypes and proving them untrustworthy or unreliable, and working on taking the perspective of others. However, bias training is not a silver bullet, and these practices need to become second nature; part of your company’s values from the top-down and bottom-up.

‘One size fits all’ policies don’t work. Design a D&I pathway that’s as unique as you are.

Pointing the finger at individual employees for their biases reflects a lack of accountability by organisations. Business leaders must think harder about shaping their own company culture to create truly ethical, fair, and inclusive environments, and act as real-life examples of the moral values they want to promote, rather than rushing to implement half-baked policies. A Harvard Business Review survey found that 75% of respondents saw superficial policies and language as insufficient to truly institute real change. They believed that leadership commitment and strengthening anti-discriminatory policies were critical.

As Lori Nishiura Mackenzie and Joanne Wehner, both at Stanford VMWare Women’s Leadership Innovation Lab, explained,

all organizations and the employees within them have different personal needs, values and beliefs, so a ‘one-size-fits-all’ approach does not make sense. Diversity and inclusion should be not only fair, but flexible and inclusive as well.

It’s important to consider that achieving true diversity and inclusion is a journey for all businesses. Unconscious bias and overt discrimination are often deep-rooted in behaviours and cultures that require time and expertise in unpacking and re-strategising. Keeping communication open and engaging employees with the right training allows businesses to address harmful attitudes and embed diversity and inclusion at the heart of the business.

HappyMaven specialises in working with companies to design sustainable D&I business strategies, bespoke to each organisation's unique needs and skillsets. Get in touch to arrange a consultation to begin your D&I journey.