In the past 10 years, hundreds of studies have cropped up showing how important it is to build teams that don't look or think the same way. And executive leadership is taking note - according to the latest research from PwC, 87% of global businesses say diversity and inclusion is an organizational priority.
And yet, there's still a lot of work to do.
Only 37% of the businesses surveyed task their leaders with specific diversity and inclusion goals, and 42% admit that diversity is still a barrier to employee progression within the company.
As more organizations start to consider why and how they should build more diverse and inclusive workplaces, we want to make it easy for individual HR leaders and impassioned employees to support the cause. Here are several important studies that lay out the benefits of increased diversity and inclusion:
D&I for Profitability
Several studies have shown that companies with higher rates of diversity regularly out-perform companies with more homogenous demographics. Here are three that dig into the specifics:
- McKinsey's 2015 Why Diversity Matters report on public companies found that those in the top quartile for gender diversity and ethnic and racial diversity in management were respectively 15% and 35% more likely to have returns above the industry mean. The consulting company's 2018 Delivering Through Diversity update reaffirms these statistics at 21% and 33%, respectively.
- Credit Suisse's 2012 global analysis Gender Diversity and Corporate Performance found that organizations with at least one female board member yielded higher net income growth and higher return on equity than those without a woman on the board.
- Morgan Stanley released research in its 2016 study Putting Gender Diversity to Work: Better Fundamentals, Less Volatility that showed companies with high levels of gender diversity have lower volatility and a better return on equity (ROE) than companies ranked low in diversity
For further reading on how diversity and inclusion impact profitability, consider the following:
- "The Other Diversity Dividend" - Harvard Business Review
- "Companies With Diverse Executive Teams Posted Bigger Profit Margins, Study Shows"- Wall Street Journal
D&I for Productivity
As the business world explores the benefits of diversity and inclusion beyond financial performance, more studies are cropping up about how diversity affects important productivity influencers like decision-making, communication and problem-solving. Read more about diversity for productivity in the following studies:
- Enterprise decision platform Cloverpop released the study 2017 Hacking Diversity With Inclusive Decision-Making, which found that inclusive decision-making leads to better business decisions 87% of the time, reaching those decisions twice as fast in half the meeting times.
- The Scientific American article "How Diversity Makes Us Smarter" features research from several top universities that show how diversity provokes more thought, makes teams work harder, and delivers a higher quality of work.
- A 2016 academic paper from SpringerPlus makes the case that diversity facilitates trust and openness in workgroup communication, enhancing work outcomes by positively impacting job satisfaction, sense of inclusion, workgroup identification and knowledge sharing.
For further reading on how diversity and inclusion impact productivity, consider the following:
- "Charting the Course: Getting Women to the Top" - Bain & Co.
- " The diversity and inclusion revolution: Eight powerful truths" - Deloitte Insights
D&I for Creativity and Innovation
One of the most common benefits attributed to diverse and inclusive teams is enhanced levels of creativity and innovation. As it turns out,
- The 2016 Boston Consulting Group study Innovation Through Diversity found that companies surveyed that had higher levels of gender, geographical or industry diversity also had higher revenue from new products and services. The study also found that innovation jumps once the proportion of female managers within an organization rises above 20%.
- In a 2015 survey from Witten/Herdecke University titled Board of Directors' Diversity, Creativity, and Cognitive Conflict, researchers found that the higher the level of diversity of board members' backgrounds and personalities, the higher the degree of creativity and cognitive conflict during the decision-making process
For further reading on how diversity and inclusion impact creativity and innovation, consider the following:
- "The diversity and inclusion revolution: Eight powerful truths" - Deloitte Insights
- "Why Diverse Teams Are Smarter" - Harvard Business Review
While the statistics that make headlines may seem bleak at times, we've come a long way in studying and appreciating the impact of diversity and inclusion on important employee performance outcomes like profitability, productivity and creativity. Be sure to reference the studies listed here to make the case for a more proactive approach to diversity and inclusion within your organization.