Why Companies are Creating Diverse and Inclusive Cultures
We live in a complex, interconnected, and diverse world, shaped by globalization and technological advancements. With the recent events and rallies of the Black Lives Matter movement, many organisations are looking to take a stand in solidarity and focus on promoting a diverse and inclusive workforce. The Canadian population continues to become increasingly diverse, resulting in an ever- changing workforce. As such, many companies are now reflecting on their own culture with a goal to create an environment that is inclusive, where differences in race, gender, and sexual orientation are not only accepted but supported.
Research is showing that companies who foster a diverse and inclusive culture experience greater profitability among other benefits. A McKinsey study stated how “companies have increasingly begun to regard inclusion and diversity as a source of competitive advantage, and specifically as a key enabler of growth”. Specifically:
• Teams are as much as 158% more likely to understand target consumers when they have at least one member who represents their target’s gender, race, age, sexual orientation, or culture.
• Organisations with higher diversity in management earned 38% more of their revenues than companies with lower diversity
• Organizations in the top 25% of gender diversity among executive leadership teams were more likely to outperform on profitability (21%) and value creation (27%).
• Companies in which women represent half of senior managers produce 10% higher cash flow returns on investment than the MSCI ACWI.
• Teams that shared the same ethnicity experienced a lower success rate for investments: 26.4%, compared to 32.2% for diverse teams.
• For every percentage point increase in Black and Latinx representation across NASDAQ-listed tech companies, the industry could experience a three-percentage-point increase in revenue.
Furthermore, a 2019 survey by the Canadian Centre for Diversity & Inclusion observed that 95% of Senior Leaders believe that diversity is a business strategy, which positively contributes to innovation, creativity and problem solving. In fact, 100% of those Senior Leaders simply believe that diverse viewpoints add value to their organizations!
With so many things to benefit from, could organisations across the country be forgoing significant benefits from not having a diverse and inclusive workforce?