Driving Business Growth with DEIB: The Ultimate Advantage?
In today's rapidly evolving cultural and political landscape, the importance of Diversity, Equity, Inclusion, and Belonging (DEIB) cannot be overstated. The significant benefits of DEIB for businesses lie in how DEIB strategy can drive both business and cultural success, positioning organizations for long-term growth and resilience.
Research consistently demonstrates the tangible benefits of DEIB. McKinsey's findings, reveal that companies in the top quartile for board-gender diversity are 27% more likely to outperform financially than those in the bottom quartile. Additionally, Harvard Business Review found that diverse teams have been shown to be 70% more likely to capture new markets and 87% better at making decisions than homogenous teams.
Inclusive leadership plays a pivotal role in fostering a thriving DEIB environment. According to a 2023 study by Deloitte, inclusive leadership can increase employees' feelings of belonging by an impressive 70%. Inclusive leadership also helps organizations adapt to diverse customers, markets, ideas, and talent, which is crucial for staying competitive in a global market.
These indicators underscore the substantial benefits that diverse teams and inclusive leadership bring to businesses, driving both financial success and a positive organizational culture. This accentuates the tangible impact that these teams and leaders can have on business outcomes.
The current DEIB landscape
The US Supreme Court decision to end affirmative action in higher education triggered considerable controversy with social and political disagreement about the role of diversity initiatives in the corporate world. While the requirements for US federal contractors to conduct diverse outreach and employers with 100 or more employees to file EEO-1 reports remains in place, the politicization of DEIB has led to increased scrutiny and has sparked debate about the role of diversity initiatives in the corporate world.
Concerns about the perception that diversity initiatives unfairly prioritize certain candidates over others have become more prevalent. Some might suggest this controversy is based in the lack of awareness that the purpose of affirmative action, as stated by the US Department of Labor’s Office of Federal Contract Compliance Programs, is “to ensure equal employment opportunities for applicants and employees” which highlights that these efforts do not equate to the candidate selected but rather creating a level playing field that results in the most qualified candidate being hired. “It is based on the premise that, absent discrimination, over time a contractor’s workforce generally will reflect the demographics of the qualified available workforce in the relevant job market.”
In July 2024, SHRM announced it would be dropping ‘Equity’ from its terminology, opting to lead with ‘Inclusion’ instead. This decision has attracted criticism from DEIB and HR professionals who believe it shifts the focus away from addressing systemic inequalities and individual barriers.
Despite these challenges, DEIB remains a steadfast priority for most Fortune 500 organizations.
As Kathi Enderes, Senior Vice President of Research at the Josh Bersin Company, notes, “From research that we conducted earlier this year, we identified that 92% of companies haven’t reduced their DEIB spend, even though hiring for DEIB roles went down.”
While the need for dedicated DEIB roles remains, organizations may be shifting their focus towards integrating DEIB principles into all aspects of their operations, rather than relying solely on specialized positions. This indicates a continued commitment to DEIB, even if the approach is evolving, highlighting its enduring importance in the corporate world.
Compliant Diversity Sourcing and Outreach
To continue prioritizing DEIB while mitigating compliance risks, businesses can take several practical steps:
- Inclusive Recruitment: Ensure job adverts emphasize that everyone is welcome to apply, while encouraging individuals with underrepresented protected characteristics via strategic and effective outreach and recruitment strategies.
- Communicate Commitment: Clearly communicate the organization’s commitment to DEIB and promote transparency on progress.
- Engage Partnerships: Collaborate with Employee Resource Groups (ERGs), educational institutions (including Historically Black Colleges and Universities and Hispanic-Serving Institutions), and DEIB-focused community organizations to tap into diverse talent pools.
Client success stories where these strategies have positively impacted DEIB efforts can serve as powerful examples of progress. For instance, organizations that have partnered with community-based organizations and educational institutions have seen significant improvements in their diversity metrics and overall business performance.
DEIB remains a priority
Celine Raffray, VP, Talent Acquisition at Bristol Myers Squibb (BMS), emphasizes that DEIB is crucial to business success. She reaffirmed the company’s strong commitment to inclusion and diversity, underscoring its strategic importance in achieving meaningful outcomes for stakeholders. By integrating DEIB into the broader business strategy, organizations can demonstrate a genuine commitment to creating a more equitable and inclusive workplace while also advancing business objectives.
As Raffray noted, “At BMS, we are guided by a single vision — transforming patients’ lives through science. To fully realize this vision, we truly rely on the strength of our rich history and long-standing commitment to inclusion and diversity to ensure that we can drive meaningful impact and outcomes for our patients and communities, our colleagues, and our business and industry. Understanding and addressing the needs of patients from diverse communities is central to our strategic business priorities, ensuring we can achieve meaningful outcomes for all. Our evolved Global Inclusion & Diversity strategy and priorities are the first steps on that path forward and remains key now, more than ever.”
Raffray’s insights highlight the critical role of DEIB in driving business results. The following benefits further illustrate how DEIB positively impacts organizations:
- Business Performance: Diverse teams consistently outperform homogenous teams in various areas, including innovation, decision-making, and market expansion.
- Talent Acquisition: A strong DEIB reputation can attract and retain top talent, especially in a competitive job market.
- Customer Engagement: Diverse teams are better positioned to understand and meet the needs of diverse customer bases, enhancing satisfaction and loyalty.
- Alignment with Customer Base: A diverse workforce mirrors the customers companies serve, improving the ability to meet their needs and driving better customer outcomes.
- Employee Engagement and Retention: Inclusive workplaces where employees feel valued and respected see higher engagement and lower attrition, reducing recruitment costs and fostering long-term loyalty.
- Risk Mitigation and Reputation: Prioritizing DEIB enhances a company’s reputation for social responsibility and helps mitigate risks associated with bias and discrimination.
- Competitive Advantage: By fostering inclusivity, companies can enhance workplace culture and improve business performance, driving long-term success.
Conclusion
DEIB remains a steadfast priority, as evidenced by consistent strategic focus among our clients. Insights from the Josh Bersin Company further validate this commitment. While certain aspects of diversity may attract heightened scrutiny or debate, companies that recognize DEIB’s strategic value understand the importance of maintaining a comprehensive approach that champions all dimensions of diversity. This focus ensures organizations continue to foster inclusive environments that drive innovation and business success.
Jacqui Welch, CHRO of The New York Times and Non-Executive Director at AMS, emphasizes the critical role of DEIB: “I believe we have an opportunity to re-familiarize ourselves with why so very many years ago we began the work of diversifying our workplaces. The case has long been made that a diverse workforce fosters innovation, enhances decision-making and strengthens the relationship between business and consumers. Creating workplaces where all people can do their best work is a matter of good business sense. This is a moment to reframe DEIB as part and parcel of any high functioning, values driven enterprise. It is an operating principle and a value.”
written by the Catalyst Editorial Board
with contribution from:
Judy Ellis
Head of Diversity, Equity, Inclusion and Belonging Advisory, AMS
Michael Caley-Cook
Senior Manager, Diversity, Equity, Inclusion & Belonging (DEIB) Centre of Excellence, AMS
Kathi Enderes
Senior Vice President of Research, Josh Bersin Company
Paul Modley
Managing Director, Diversity, Equity, Inclusion & Belonging (DEIB) Centre of Excellence, AMS
Jacqui Welsh
CHRO at the New York Times and Non-Executive Director, AMS
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