Do you want larger profit margins in your business?
Recent studies have shown that companies with diverse executive teams actually have larger profit margins than companies with relatively little diversity in their upper positions. If you’re sitting there raising your eyebrow and tilting your head, we encourage you to keep reading for some proof:
- Companies that ranked in the top quartile for ethnic diversity among their executives were 33% more likely to outperform competitors on profits than those in the bottom 25%
- Companies with the highest number of women in managerial positions were 21% more likely to achieve the above-average profitability than those with relatively few women in senior decision-making roles
- Companies with at least three women on their boards achieved a higher return on equity and earnings per share over the next five years than those with no women on their boards.
There’s a clear advantage to team inclusion, however, there’s a difference between what companies think diversity, equity and inclusion is in your culture and what it actually is.
While the awareness and intention may be there, the path towards achieving diversity and inclusion may seem unclear. To help your business develop a blueprint for your DEI program, our MCDA CCG team developed the guide below. Keep reading to understand how and why business leaders should play key roles in DEI program development.
How Diversity, Equity and Inclusion Can Drive the Value of Your Business
Workplace diversity refers to the differences between employees with regard to race, ethnic groups, gender, age, skill sets, and more. However, just because your company carries a diverse workforce doesn’t mean that you’re guaranteed to reap the benefits of having one.
If your employees don’t feel comfortable enough to express their unique thoughts, opinions, ideas or views out of fear of judgment and/or negative consequences, you won’t see improvement. Inclusive workplaces empower employees and assure them that their differences are welcomed and integrated into the environment.
Creating equity within your organization takes your commitment even further by providing your employees with the proper processes and programs aimed at their growth and development.
Invites New Perspectives and Fresh ideas
Each of your employees brings different backgrounds, experiences and skills to their job, and their insights allows your company to make better decisions based on a broader range of considerations. When solutions emerge from a process like this, they tend to be more concrete, thoughtful and sensible. However, in order to achieve this, you must make sure your leadership team is committed to developing an effective diversity equity and inclusion strategy.
As your customer base grows and becomes more diverse, your business workforce should reflect this. Studies have shown that businesses that actively recruit for a more diverse workforce are able to better understand and serve their growing customer base. In fact, a majority of businesses report that their customer base has become more diverse in the past decade.
Connects with Your Growing Customer Base
Employees from different backgrounds can represent the interests of more exclusive customer segments, thus broadening your overall reach. As you continue to grow and mirror your customer base within your workforce, you can better understand your target audience and make better divisions based on these key insights -such as product development or market expansion to reach more consumers.
Increases Your Position in the Marketplace
Diversity, equity and inclusion can help you establish stronger brand preferences in the market that your company serves in addition to the job market. More and more consumers – especially those in the younger generations – increasingly seek to align themselves with brands and businesses that share the same values of their own. If you choose to embrace diversity and inclusion in your business, consumers may feel more aligned with your brand and its values.
In turn, this may encourage them to choose your brand over a competition as they seek to support businesses that stand for values they care about. Additionally, it isn’t just consumers who care about companies being diverse and inclusive. A majority of job seekers and employees today admit that a diverse workforce is an important factor when it comes to job offers. As the war for talent continues post pandemic, the case for diversity and inclusion can’t be overstated.
DEI Audit of Your Business
In order to develop an effective DEI program, you must first be aware of your current diversity profile and how it affects your company. This is where a DEI audit is critical to your overall success.
A DEI audit can present a valuable framework for analyzing and measuring diversity within your company while also identifying key areas of opportunity. By properly evaluating your people, processes and strategies, you’ll gain valuable insights into the cultural and/or systemic barriers impeding your ability to carry a diverse workforce. Once you uncover these insights, you can use them to set your business up for success.
Step 1: Ask questions
When you want to promote diversity, equity and inclusion in your company, you must first identify the needs of underrepresented groups in order to provide them with the right support. By asking yourself specific questions pertaining to different employee groups – for example, any existing disadvantages or advantages within the company – you can have a better conversation with your employees.
Once you pinpoint these areas, consider inviting your employees to share their thoughts or concerns by creating a safe environment for discussion.
Step 2: Re Evaluate your Business Processes
Once you’ve asked questions and gathered feedback from your employees, shift your attention to the rules that guide your company and promote the culture within. Take stock of your business policies and procedures and identify the areas that hinder diversity, equity and inclusion efforts.
When reviewing your business practices, take it one step further and identify biases in your business processes, methods and strategies. For example, does your job posting language alienate certain groups of job seekers? You may be unintentionally driving away quality candidates.
Step 3: Collect and Analyze HR Information
Track and assess metrics relating to your talent recruitment and development, leadership demographics, employee engagement and retention, compensation and benefits to determine any discrepancies.
However, it’s important to remember that there is associated risk with the actions that may or not be taken as a result of analyzing this data. Because of this heightened risk, we advise employers to protect this information and work with outside HR professionals to gather this data and determine the next steps.
Step 4: Monitor Your Progress
Be sure to set a regular schedule to monitor your DEI efforts and measure your progress over time. Share the benefits of your progress with other leaders in your organization often to assess whether your company is heading in the right direction when it comes to diversity, equity and inclusion.
With so much to gain from fostering a diverse and inclusive environment, it’s imperative that you approach it in a manner that is brave enough to challenge the status quo yet careful enough to not upset individuals in the process. Just as with any significant remodel, it’s strongly advised that you don’t approach it until you have professional guidance and a solid plan in place. Our team of business experts at MCDA CCG can help you conduct a DEI audit, create a plan intended to effectively drive diversity, equity and inclusion in your workplace and guide you through the process.
Beyond the above scope of services, we can help you draft or revise your employee policies, procedures, and handbook to ensure that it doesn’t contain any discrepancies affecting different groups of current and/or future employees.
When your efforts are authentically embraced and implemented in your company, you can play a key part in shaping our changing society.
Call our office at (657) 258 – 0577 today!
Other Resources You May Like…
The Real Reasons That So Many Workers Quit in 2021
Dos and Don’ts: Employee Handbook Rules You Should Know
What are the Consequences of a Poorly Written Employee Handbook?
Why Every Business Needs an HR Compliance Audit
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