Approaching Diversity & Inclusion in the Workplace

Artboard 1@d&i.png

Diversity and Inclusion (D&I) are very hot topics in 2019 and are only going to get more relevant.  But to understand how to improve diversity and inclusion in the workplace, it’s best to have a firm idea of what it is - and what it isn’t - for companies to successfully deploy and manage a D&I strategy.  That only 30% of companies say they have a definition of diversity is a key challenge.

Diversity in business means that companies have a workforce that reflects the makeup of today’s society, including dimensions like gender, race, religion, sexual orientation, culture, disability, and others.  What diversity is not is a catchall, “check the box” feel-good initiative that is approached in the same clinical manner as a compliance program. To be truly diverse, a company must not only have a diverse workforce that includes many, if not most, of those categories, but it must also use the talents, ideas and unique point of view that these groups bring to the table for the benefit of the business.

But it is the latter part of the above where many companies stumble.  Having built a diverse workplace, the lack of an inclusion strategy or a lack of understanding over the connection between diversity and inclusion can mean that some companies never progress beyond the employee makeup phase.  The Society for Human Resource Management (SHRM) defines inclusion as “the achievement of a work environment in which all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization's success”.  But it turns out that inclusion is the secret sauce that allows diversity to work. By realizing this, and focusing on integrating the two, diversity’s value is truly unlocked through inclusion.


While improving, today’s business landscape still has many obstacles to overcome to realize a truly diverse and inclusive workplace.  Some of the key challenges facing D&I in business today include:

  • Gender – Recent UN data has shown that women in executive positions make up only 24% of such leadership positions.  Women also make up less than 16% of board members of S&P 500 companies.  And to put in an even more relatable perspective, there are more men with the first name of “John” who are CEOs than there are women CEOs combined!

  • Balance – Even in companies that have begun to address diversity overall, there are still major discrepancies.  Still today, 97% of US companies do not have a senior leadership team that reflects the current ethnic labor force.

  • Culture –  Culture issues still impact business hiring decisions.  Studies indicate that people with “foreign-sounding” names may have between 14% and 28% less likely chance to receive an interview.  The impact of culture on inclusion and beyond just diversity is complex and even as minorities and gender barriers are broken in leadership positions, many of those leaders feel constrained by difficult conversations and issues.

  • Data – While diversity is easy to determine through counting and measuring, inclusion is whole other matter. Inclusion requires deeper communication and understanding that is often difficult to quantify.  And while diversity can be measured and tracked through headcount, inclusion requires focus groups, frank one-on-one discussions, survey results, a large investment in mid-level, senior level and HR resources and a commitment to not just counting the staff but talking to them and understanding what is needed to break through culture barriers and achieve true inclusion.

D&I as a Competitive Advantage

Despite these challenges, businesses today are faced with the reality that a truly diverse and inclusive workforce can give them a significant competitive advantage.  One reason is that people with greater cultural exposure are more creative. Additionally, inclusive teams have been shown to be 24% more effective at creativity and decision making compared to less diverse groups.

Secondly, studies have shown that racially diverse companies in the top quartile financially outperform non-diverse companies by an astounding 35%.  And that performance is reflected in gender statistics as well with top companies 15% more likely to financially outperform their industry’s median.  These levels of inclusion impact the bottom line directly as well. Company earnings before interest and taxes (EBIT) rises 0.8% for every 10% increase in racial and ethnic diversity and 3.5% for every 10% increase in gender diversity.

The importance of inclusion also adds to the bottom line.  A study by Gartner found that in highly inclusive enterprises, these companies can generate 2.3 times more cash flow and 1.4 times more revenue. The study further found that truly inclusive organizations are 120% more capable of meeting their financial estimates.

Diversity and Inclusion Trends in 2019

As companies begin to understand and leverage diversity and inclusion in the workplace, there are several trends to watch for in 2019:

  • D&I as a business strategy – Many companies approach D&I as an HR initiative or in the same way they approach compliance. But the competitive advantages and strong results from companies who have successfully deployed a truly integrated D&I strategy suggest that it should be pursued less as an HR initiative and more as a business strategy.  One successful example is that of a European company that moved from a single headquarters to a multi-hub approach to tap into local economies by becoming part of those economies.  By embracing diversity in leadership and inclusion into local cultures, they were able to increase sales within those regions by 14%.  Look for more companies to pull their D&I strategies into their business planning sessions and steer them away from being strictly HR initiatives.

  • Customer experience and brand reputation – Many global companies rely on brand reputation and customer experience for growth. But today’s consumers often look not only at price but at a company’s environmental, labor, ethical and sustainability footprint as well.  Building diverse and inclusive workforces and integrating these programs into the brand both provide unique insights into customer preferences (and therefore product offering) as well as enhances brand perception among a global or local consumer base.

  • Deep analytics – As inclusion programs are more reliant upon discussion and direct communication between leadership and individuals as well as groups, there can remain an unintended bias in recruiting and evaluating new hires. With the advent of AI and big data, much of the subjectivity can be removed and real-time insights and measurements can be taken that allow a company to focus on problem areas.

  • Increase in diverse executive leadership – As seen in the financial statistics, strong financial gains are possible. As leadership becomes more diverse and inclusive, perception and culture can shift so that the company is dedicated to D&I at all levels. In the coming year, look for companies to improve leadership initiatives to leverage that power.

As financial gains become more evident in companies with a strong D&I program, many are realizing that the journey requires as much a change in corporate culture as in numbers.  And any diversity program is only as strong as the effort and success of inclusion initiatives. Or, as one author in Forbes put it, “Inclusion is the only scalable way to build diversity within an organization”. For leaders who are willing to embrace full inclusion and change their culture to accommodate new and creative ways of thinking, the dividends are high.  And it is this top-down buy-in, combined with the view of diversity and inclusion as a business decision that will unlock the true value of diversity and build an environment where both business and employees can thrive.

Looking to leverage tech to better manage your diversity & inclusion initiatives? Schedule a demo with Five to Nine to get the most of your D&I programs.