March 31st, 2022

Benefits of Diversity, Equity, and Inclusion

Diversity, equity, and inclusion (DEI)—three simple words with huge meaning and ramifications for business. When organizations dedicate effort toward DEI, the value is never-ending. But at the very least, organizations that make a commitment to diversity, equity, and inclusion can expect these benefits. 

5 Benefits of Diversity, Equity, and Inclusion  

1. Increased likelihood of innovation

The best way to stifle innovation is to make sure everyone is thinking the same way. A diverse workforce creates creativity and innovation through differing opinions and perspectives. When employees come from diverse backgrounds, they think differently—which makes it easier to problem-solve, formulate plans, and innovate. 

Though not every innovation will be worthwhile, companies that do innovate are more likely to gain a competitive advantage over their competitors. 

2. Enhanced employee engagement and productivity 

According to LinkedIn, Gen Z and Millennials say the number one reason they’d leave their job is if they did not have the opportunity to learn and grow. Luckily, diverse teams result in exposure to different skills, ideas, and knowledge sharing. For businesses, diversity is an unintended tool to educate and train employees. And workers that are constantly learning and growing are more engaged and satisfied with their jobs. 

More importantly, research shows employees who are more satisfied and engaged at work, are more productive. So companies that are more diverse also see higher levels of productivity. Mckinsey reports that more diverse companies have a 35% increase in performance over companies relying on employees who are a “culture fit.” 

3. Better customer loyalty and brand reputation 

Ethnic minority and female worker populations are growing and making up a bigger share of spending power. So if our customers are becoming more diverse—so too should our workforce. Employees have to be close to and relate to customers to create products and services that resonate with them. The more divorce your workforce, the more likely your customer’s voice will be represented. 

Consumers also like to see diversity, equity, and inclusion initiatives from the brands they buy. Brands that do a good job of promoting DEI have an easier time building trust with consumers—which ultimately leads to customer loyalty. 

4. Improved hiring and retention

DEI has important implications for hiring and retaining employees. The number of workers who care about and understand the value of DEI is increasing. According to Glassdoor, 76% of job seekers feel a diverse workforce is an important factor when evaluating companies and job offers, and 32% of workers wouldn’t apply for a job at a company with a lack of diversity. 

Generation Z and Millennials also value DEI more than Generation X and Boomers—because they’re more diverse themselves. 48% of Generation Z is nonwhite—leading them to be the most diverse generation in American history. If you want to win with this generation, you have to know how to recruit for diversity and showcase your progress made towards DEI.  

5. Higher profitability

Companies that excel at diversity, equity, and inclusion initiatives see a 28% higher profitability than other companies. But there are literally hundreds of stats out there that highlight the impact of DEI on a company’s bottom line. 

Why? Because of all the benefits above.

Get Started With a DEI Plan

DEI brings many advantages to employee growth, product development, project management, and process improvement that are yet to be substantiated. Bottom-line—all businesses benefit from diversity, equity, and inclusion. Ultimately, better DEI in the workplace enables growth—both in people and profits. To reap these benefits, organizations must start with a DEI plan. Download our guide to learn how to get started crafting your diversity, equity, and inclusion plan. 

Download Our Guide: How to Promote Diversity, Equity & Inclusion In Small Businesses

Learn strategies and tips for improving diversity, equity, and inclusion (DEI) practices in your small business—and how to craft a DEI plan.

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