How Better Diversity Training Benefits Your Bottom Line

In this day and age, diversity training has become largely commonplace in workplaces across the US, with more than 2 out of 3 companies reporting they provide diversity training in some capacity. In fact, about 15% of US companies have staff whose entire job function involves diversity and inclusivity.

‍

When ideas become conventional wisdom, however, one question that often gets overlooked is ‘why’? 

‍

As offices and worksites have been transforming into more diverse places for the last half a century, both as a result of specific actions like diversity training as well as changing population demographics and evolution toward greater diversity of people and ideas in society and culture in general, it’s easy to lose track of some of the very concrete ways that fostering a diverse environment is a direct benefit for employers - not to mention employees and just about everyone else, for that matter.

‍

How Does Promoting Diversity Benefit Employers? 

‍

According to a recent article in HR morning, increased productivity is one of the major benefits they can expect to reap as a result of establishing a diversity-optimized working environment, with employees collaborating much more frequently and freely when they feel less uncertain about how to properly and professionally interact with others who may have backgrounds, expectations, and sensitivities that are unfamiliar to them. 

‍

The frequent and free collaboration of people bringing together different skill sets and perspectives is positively correlated with innovation, as well. 

‍

Improved customer service is another area that can pay direct dividends as a result of developing a staff better equipped to meet customers or clients on a level that conveys a sense of understanding and consideration that can make the customer and the business they are bringing to your company feel all the more welcomed and appreciated.

‍

Recruiting and retaining top talent also benefits directly from a diversity-minded company culture. The size of the recruitment pool opens up significantly when you remove barriers that might have excluded otherwise competent and capable applicants, and employees who feel seen, included, and enabled to make their own meaningful contribution to that company culture are less likely to seek out other opportunities in the first place, reducing turnover.

‍

What’s the ROI?

‍

And what kind of returns can be expected on these investments of business hours, team focus, and company cash? Employers that are better than average in terms of filling their ranks with a diverse set of people with different ideas/skills/experiences can expect significantly augmented innovation returns and about 10% higher earnings across the board than their less diverse counterparts.

‍

The key understanding here is that there is proportionality to the amount of input and output - a minimally diversity-minded approach is better than nothing, but it will likely return minimal benefits relative to greater returns that can be expected from a more robust diversity-minded approach -and not all companies are investing equally, of course.

‍

While the two-thirds of companies that conduct some form of diversity training will certainly see greater dividends from their diversity-related efforts than the one-third of companies who made no such effort, not all companies that conduct diversity training take the next steps needed to optimize the positive impacts that diversity can bring to businesses. 

‍

As recently as this 2018 study from the Harvard Business Review, for example, only 40% of companies had undertaken any measures beyond diversity training to establish a more inclusive company culture. Such measures might include instituting equitable employment and wage allocation practices as well as developing company leadership that both actively supports the cause and nurtures open lines of communication, all of which can have a substantial amplification feedback effect on diversity-related company efforts. 

‍

Clearly there is still much room for improvement, but the evidence is clear that properly executed diversity-minded efforts can not only positively affect company culture as well as both the internal and external communications and interactions, but also that doing so can benefit your business's bottom line directly. At this point, any failure to execute on a comprehensive, diversity-optimizing plan is a missed opportunity to gain a valuable competitive advantage.

Looking for more exclusive content? Check out what’s new on the Mployer Advisor blog, and be sure to check out Mployer Advisor’s podcast “This Week in Benefits.”

‍