Topline, bottomline, legal compliance and retention—these were always considered growth enablers. In recent years, however, a new terminology has been added to growth consideration of corporates—diversity and inclusion.
A McKinsey report, Delivering through Diversity, states that business performance is related to diversity. Companies in the top quartile for gender diversity on executive teams were 21 per cent more likely to outperform on profitability and 27 per cent more likely to have superior value creation. The highest-performing companies on both profitability and diversity had more women in-line (i.e., typically revenue-generating) roles than in staff roles on their executive teams.
As per the report, it’s not just gender. Companies in the top quartile for ethnic/cultural diversity on executive teams were 33 per cent more likely to have industry-leading profitability. That this relationship continues to be strong suggests that inclusion of highly diverse individuals—and the myriad ways in which diversity exists beyond gender (for example, LGBTQ+, age/generation, international experience)—can be a key differentiator among companies.
For a company looking to develop a more varied and comprehensive workplace, it is essential to understand what represents workplace diversity. When we think about diversity, we usually think of cultural background, gender, race, religion, citizenship status, age and other distinct differences between people. In the coming years, organizations that realize how to handle multiplicity in the office successfully will hold a definite advantage when it comes to utilizing and hiring talent.
In today’s challenging business environment, workplace dynamics have evolved to embrace diversity as an intrinsic part of their functioning. As this evolution paces ahead, the need of the hour is for companies to adopt an organizational culture that prioritizes employee needs and encourages diversity and inclusion across its practices. At HCL, we believe that companies that encourage inclusion and diversity in the workplace are more innovative and perform better.
Irrespective of cultural or economic background, disability, age and gender identity or introverted and extroverted personality types, everyone needs something different to feel like they belong and are valued. When people are not in an inclusive environment, they often feel excluded and find it hard to fulfil their potential.
Originally posted on Entrepreneur