Diversity and Inclusion: What it Means and Why it Matters
Diversity and inclusion in the workplace has become a hot button topic. It is catalyzed by the growing awareness of continued inequities in our society. Motivated by both moral and sound business reasons, Corporate America has become a leader in effecting real change.
Despite the growing discussion, there remains some ambiguity about what it means and why it makes good business sense to pursue.
What is Diversity and Inclusion?
- Diversity is defined by how an organization accepts and values people of different races, ethnicities, genders, ages, religions, disabilities and sexual orientation, as well as differences in education, personalities, skill sets, experiences and knowledge base.
- Inclusion refers to the degree to which an organization is supportive and respectful of all its employees and encourages a collaborative spirit to increase their contribution.
Why Does It Matter?
Fair and respectful treatment of all people is fundamental to a better society. Prosperity has always followed greater inclusion, from women’s suffrage to the Civil Rights Act. We all benefit from continuing progress.
For businesses, it bestows a number of very valuable benefits, including:
- More diverse companies enjoy better financial results. According to a study by McKinsey, gender-diverse companies are 25% more likely to outperform their peers, while ethnically-diverse companies are 36% more likely to outperform their peers.1
- The pool of human talent is expanded. Focusing on narrow groups results in missing out on the talent that exists within the groups that are overlooked. Diversity and inclusion also help drive broader talent recruitment since 67% of job candidates say that a diverse workplace is an important factor when considering a job offer or evaluating a company to work for.2
- Diversity improves the brand. Customers want to deal with companies that have a record of diversity and inclusion.
How Companies Can Drive Diversity and Inclusion
This can only happen through commitment and concerted effort. It is generally marked by these common attributes:
- The commitment begins with the CEO or COO.
- A top executive must be assigned the responsibility of execution and held accountable.
- Behavioral standards are created and leaders need to set the example.
- A comprehensive and ongoing employee training is implemented.
- Diversity and inclusion is integrated into hiring goals, performance measurement, leadership assessment and bonus awards.
- Broad employee involvement is encouraged through networks, employee recognition and surveys.
- Establish goals, measure results and report to employees, including a breakdown on hiring, promotion, organizational rank, etc.
- Success is measured by employee productivity, morale and turnover.
Diversity and inclusion for an advisory practice may also be a valuable pathway to tapping into new markets, whether they are sliced by generation, ethnicity or sexual orientation.
Please reference disclosures: https://blog.americanportfolios.com/disclosures/