The business case for diversity is strong
Companies who are implementing diversity management strategies are sometimes accused of doing it just because it is perceived to be the right thing to do or that such a soft and fluffy thing is costly . Now research show that the latter is certainly not true.
A vast amount of research show that companies which creates a diverse workplace through best practice diversity management processes significantly outperforms in financial and performance terms. In other words, it makes sense from a bottom line perspective.
A few examples:
- A US study found that the average annualised return for the 100 companies that rated highest in diversity management was 18,3% compared to 7,9% for the 100 lowest companies among Fortune 1000 companies
- A study among 700 of US’ Fortune 1000 companies showed a high correlation between number of female top management members and (financial) performance .
- A European meta-study documented that minority groups in general have lower absenteeism and lower employee turnover.
The benefits of diversity to an organisation can be divided into three categories;
- Improved performance due to a better talent pool and improved skill base.
- Cost reduction from lower recruitment costs, lower employee turnover and fewer absenteeism days.
- Various ‘soft’ outcomes such as increased learning and innovation, the avoidance of groupthink, higher job satisfaction and an overall better work environment.
Diversity management strategies are difficult to implement and it takes time and effort. But it makes sense from a business point of view.