workplace diversity leads to stronger financial performance

The benefits of diversity, equity and inclusion go beyond just the bottom line, but it’s a fact that having a more diverse group of employees leads to stronger business performance. That’s not so surprising when you consider that groups of people with different backgrounds, experiences and insights may be better at finding innovative solutions to challenges than a more homogenous group.

A number of institutions and consulting organisations have been investigating the business case for diversity for years, and the results speak for themselves. A 2021 study conducted by SQW and commissioned by the UK’s Financial Reporting Council found a positive relationship between the proportion of women on company boards and the company’s financial results.

The consulting firm McKinsey has conducted research in this area for a number of years, and in their most recent 2023 report, where they analysed thousands of companies worldwide, they found that companies in the top quarter for ethnic diversity were 39% more likely to outperform the competition than those in the bottom quarter.

a diverse and inclusive workforce attracts top candidates

Hiring top talent is a major challenge in almost all industries at the moment. Companies are facing tougher competition than ever to attract and hire staff with the skills and background they need.

If your organisation is also facing this problem, you really can’t afford to ignore diversity and inclusion. For example, if you haven’t made your office environment fully accessible to include colleagues with disabilities, you’ll exclude these individuals — and potentially miss out on an important pool of top talent in the process.

Additionally, multiple surveys show that it’s among the top qualities job seekers look for in an employer. Our own 2024 Workmonitor report, which surveyed 27,000 employees in 34 markets, found that 32% of UK workers wouldn’t accept a job if the company wasn’t making a proactive effort to improve its diversity and equity. Similar, 31% would decline if the company didn’t align with their environmental and social values – with this figure rising to 47% among respondents in Generation Z.

Don’t underestimate the impact that a feeling of belonging in the workplace can have. When potential candidates see people with similar backgrounds succeeding at your company, there’s a strong chance they’ll accept your job offer instead of a competitor’s.

succeeding with diversity, equity and inclusion gives you a competitive edge

Companies that invest in DEI experience a range of benefits – both financial and cultural. So, when more and more companies are starting to actively work on boosting their diversity, organisations that continue to ignore it risk getting left behind.

For a lot of companies, time is of the essence — more and more surveys and studies are showing that DEI is climbing up the agenda for companies of all sizes. According to McKinsey, companies globally will spend $15.4 billion on DEI by 2026, more than double the $7.5 billion spent in 2020.

Soon, it may be just as important to match your competitor’s DEI efforts as it is to match their level of pricing, innovation or customer service. All companies need to remain competitive to succeed, and with DEI, it’s time to get started now.

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