Workplace diversity doesn’t just refer to age, race, nationality, gender, views or beliefs; it also refers to skill sets, literacy, language and other statuses and differences. Moreover, numerous studies support the idea that diversity and inclusion can deliver a high return on investment (ROI). What’s become apparent is that while initiating diversity projects may seem disruptive, time-consuming and possibly costly, the ROI is well worthwhile.
Research published by Deloitte Review reveals that high-performing teams are both cognitively and demographically diverse.
Both educational and functional in nature, cognitive diversity includes mental frameworks used to solve complex problems that typically require input from these six different mental frameworks:
Each of these frameworks brings its own set of challenges, and few are adept at working within all of them. A team with wide cognitive diversity can recognize which of these frameworks are present and individual team members can work within the framework that best suits their own.
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Knowledge and networks specific to particular demographic groups help elicit cognitive diversity through their indirect effects on personal behaviors and group dynamics. For example, racial diversity stimulates curiosity and gender balance facilitates conversational turn-taking. Both cognitive and demographic diversity impact project outcomes and ROI. For example, Deloitte findings show diversity increases innovation by 20% while decreasing risks by almost 30%.
ROI in diversity projects
If your company is considering initiating diversity projects, these Harvard Business Review statistics may be just what you need to take the plunge.
- Racially and ethnically diverse companies are 35% more likely to have higher performance levels
- Gender-diverse organizations achieve 15% better financial performance
- For every 10% increase in diversity on executive teams, organizations saw an 8% increase in profitability
- Companies with diverse workforces make 2.3 times higher cash flows per employee
- Almost 50% of companies that have diverse boards achieve higher profits
How is the increased ROI achieved?
When diversity and inclusion are part of the equation, team members can develop ideas and solutions that leverage authentic, true aspects of their workplace persona, rather than requiring them to suppress those talents that make them unique. Networking and visibility are possible through leadership sponsorship, and career paths that are more clearly defined, understood and facilitated.
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Diversity + Inclusion = Success
It’s important to know that diversity without inclusion isn’t enough to reach these goals. Studies have also shown that diversity without inclusion can’t fully achieve these results. While hiring a diverse team brings everyone to the table, inclusion must be embedded in the culture to make diversity work. Inclusion involves fairness, respect, value and belonging, along with a commitment from the highest levels of company leadership to provide a safe and open environment where all employees feel empowered to grow.
When employees are valued and feel their future is on an equal footing with that of their peers, their productivity and contributions increase. In addition, diversity and inclusion bring insight from varied experiences and backgrounds. This more diverse and inclusive workforce, makes the company better equipped to address areas of weakness to reduce risks and present opportunities through innovation that may not have previously been possible.