Whether it’s within an ecosystem, a social system or an organization, the idea that diversity matters is a given, but there is now compelling evidence that diversity makes sound financial sense.
A recent study by McKinsey’s revealed that companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.
The same research revealed that in the United States, ‘there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.’
A virtuous cycle of increasing returns
While the study’s authors are quick to point out that correlation does not equal causation, the findings do suggest that more diverse companies are better able to ‘win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns.’
It’s a theory that makes sense to Candace Labelle, who leads CSC’s global diversity program, “Organizations need to reflect the diversity of their customers if they’re to thrive which is why companies need to focus on diversity and inclusion at a strategic level.”
Why diversity doesn’t work without inclusion
Understanding the difference between diversity and inclusion is an important concept and one that can sometimes get overlooked. As Candace explains, “Most people are comfortable with the concept of diversity, especially the visible traits like gender, skin color and age. However we need to remember that the invisible traits – people’s sexual orientation, religion, values, and background etc. are equally important.”
That’s half the battle, but as Candace points out, organizational diversity only works if you also have a culture of inclusion. Inclusion is often described as the proactive behaviors that create a welcoming environment where everyone has an opportunity to contribute – and is valued for their distinctive skills, experiences and perspectives.
Candace said, “When I started my career I was the only female in a team of 24 men, but it worked because I was made to feel welcome and I knew that my views were respected. Creating that culture of respect for difference is essential if you’re to foster a sense of belonging and engagement. We want people to feel that they can bring their authentic selves into work.”
Employee Resource Groups
CSC has long recognized that diversity brings with it strength, agility, innovation and resilience and its Employee Resource Groups (ERGs) play a key role in supporting the diversity and inclusion agenda. Created by employees, for employees, they foster diversity and provide regional and global forums where employees can advance best practices, share ideas, form professional and mentoring relationships and achieve business goals.
“There are seven ERGs globally, including the Young Professionals Resource Group, Abilities First, Women in Leadership and PRIDE, which promotes awareness about lesbian, gay, bisexual and transgender issues to name just a few,” said Candace.
The groups play a key role in attracting and retaining talent. “When people see that others like them succeed, grow and thrive within the business, then the decision of whether or not to apply becomes that little bit easier. And it’s the same with retaining talent – if people feel they belong then they’re more likely to stay,” Candace added.
Aside from the identification with like-minded people, what are the tangible benefits for members? “Group members benefit in numerous ways,’ said Candace, “people tell me how the networking opportunities help broaden their perspectives and give them exposure to parts of the business they may otherwise not have had access to. They often get to meet leaders and get involved with business challenges that the group take on. Others have used the group to find mentors or new roles,” she said.
A new chapter for ERGs
This spring, the ERG model will evolve and enter an exciting new phase that will extend the reach of the groups globally. Candace explains, “The groups have proved so successful that it’s now time to make sure that they have a truly global reach. To do this we’re creating regional chapters and engaging with local leadership to sponsor and support them.”
It’s clear that diversity and inclusion play a key role in creating a strong, successful and resilient business, but it’s also clear that like any other part of organizational culture, diversity and inclusion need to be proactively and strategically managed and supported.