Diversity and Inclusion Prove Profitable

Workplace diversity has been in discussion for several decades, but the topic didn’t start to become trend worthy until someone figured out how to prove that having a broad range of employees in a company not only satisfies legal EEOC requirements but also adds to the company’s bottom line.

In the report “Diversity Matters” compiled by McKinsey & Company, researchers found that while employers know intuitively that diversity is important, in the last five years it is has become measurably evident that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Those in the bottom quartile less likely to achieve above-average returns.

McKinsey analyzed management practices of several hundred companies and 5,000 leaders in industries such as transportation, technology, heavy industrials, manufacturing, communications, and professional services. What they found is companies in the top quartile for racial and ethnic diversity are 35 percent

70%

Companies who actively promote a diverse workforce are 70 percent more likely to capture a new market audience

DIVERSITY AND INCLUSION PROVE PROFITABLE

BY GEORGIA KRAUSE

more likely to have higher financial returns than firms with less diversity. Companies with greater gender diversity are 15 percent more likely to show higher financials compared to their respective national industry medians.

A study published in the American Sociological Review found that companies with the highest percent in racial or gender diversity have higher sales revenue, more customers, higher than average market share and profitability. Notably, companies who actively promote a diverse workforce are 70 percent more likely to capture a new market audience. DIVERSITY IS WHAT YOU HAVE. INCLUSION IS WHAT YOU DO.

Building more diverse companies is a fluid process, so as companies see the advantages of reaching out to and including a wider range of employees than they had in the past, some are dedicating corporate management slots to actively meet diversity and inclusion targets.

Why? That’s the question Tiana Carter, Director for Culture & Engagement with Waste Management Corporation, discussed during her Inclusion & Diversity presentation at the EquipmentSHIFT 2020 Virtual Conference.

A major reason companies are investing in proactive diversity and inclusion efforts is to find and keep skilled workers, especially important for companies like ours who are experiencing a shortage of skilled workers. Retaining good employees means less down time and workers who are satisfied with their position are more productive.

Similarly, as some workers retire or change careers, those in line to move up to those jobs have different priorities than the people they are replacing. Workers now demand a realistic work/life balance. Diversity and Inclusion (D&I) are a set of tools that can help businesses find and retain workers in today’s environment.

INCLUSION

Carter says building a diverse workplace starts with inclusion, and that mind-set is best achieved by starting at the top with leadership actively committing to values that appreciate individual differences, perspectives, and talents.

Society for Human Resource Management defines inclusion as “the achievement of a work environment in which all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization’s success.”

“Inclusion comes before diversity. Diversity is not sustainable without inclusion. You can’t have one without the other, but you are less likely to have success,” Carter says. “Inclusion is taking the time to get input from different perspectives.”

Inclusion is built on trust, respect, and working to silence the unconscious bias that causes stereotypes and attitudes towards other groups of people to form. The Harvard Business Review lists these six inclusive behaviors for managers:

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❯ Ensure that everyone is heard ❯ Make it safe to propose novel ideas ❯ Give team members decision-making authority ❯ Share credit for success ❯ Give actionable feedback

Implement feedback from the team

For example, the current American workforce consists of up to five generations, so employers need to be aware of what each generation sees as important to do their job well. Susan Early served eight years as recruiting director for a international trucking transportation firm and said her company’s

DIVERSITY

When diversity discussions first began after the 1964 Civil Rights Act was signed, the characteristics used to define workers were generalized into just a few over-simplified social categories: race, gender, age, religion, sexual appearance, national origin, disability. We know Today that category list has expanded to include INTUITIVELY 34 characteristics such as personality and thought that diversity style, cultural background, matters mental health, education, neurodiversity, socioeconomic background, geographic location, relationship status, military status, and life experiences. What began as a definition of what not to judge hiring decisions on, has become an index of potential attributes an employee adds to the success of the company. A key benefit of diversity is that companies with varying employee perspectives are better innovators and decision-makers. Senior employees can draw on a much broader range of experiences, their knowledge based proven solutions. They can help eliminate expensive and time Companies are investing in proactive diversity and inclusion efforts to help find and keep skilled workers. consuming trial and error situations, and perhaps avoid succumbing to the “next big thing”. Linear best results came from listening to what thinkers like engineers bring tight focus to current and potential drivers’ priorities were multi-layered projects. Employees with varying based on what time they were at in their lives. socioeconomic backgrounds may weigh in

For example, Early said drivers with young on cost-benefit analysis differently to offer families might want local and dedicated different funding possibilities. routes, while mid-career drivers might As the emphasis on a diversified workplace welcome regional or overnight routes. Drivers grows, so will the effect on recruiting new close to retirement might seek to transition to employees. ZipRecruiter surveyed 6,178 active shorter hours instead of stopping work entirely. job seekers and 350 employers on their

By working to accommodate these workers, database in September 2019 and found close her company’s retention rate was high, which to 90 percent said a company’s concrete in turn became a valuable recruiting tool. commitment to workplace diversity affects

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Donte Shannon, AEMP CEO, says diversity and inclusion must be a core value of an organization.

their decision to work there. “This means that employers who deploy DEI programs can have a competitive edge in the war for talent,” said Ian Siegel, ZipRecruiter Co-Founder and CEO.

AEMP’S D&I GOALS

Donte Shannon, CEO of AEMP, says recent social and civil unrest have triggered greater interest in diversity and inclusion for AEMP members. “Diversity and inclusion has been on AEMP’s agenda for a while, but violence such as that against George Floyd have our members seeking guidance on their own corporate responsibilities,” Shannon says.

Shannon’s advice is solid: Diversity and inclusion must be a core value of an organization. “Interviews and conversations with current workers and job applicants must include talking about the company’s commitment to maintaining a diverse and inclusive workplace environment, as well as mutual support for both the employees and company’s success. If you are not talking about it, then it’s not a company value.”

Shannon is also taking a historically unique approach to building diversity opportunities within AEMP. Growth and leadership opportunities are missed when we tap familiar networks for new talent. Our personal and professional networks almost always resemble ourselves. Instead of waiting for members to initiate interest in AEMP leadership, Shannon has started being proactive, gently ‘tapping members on the shoulder’ and encouraging them to become leaders in the Association. “Some people don’t recognize the value they can bring to an organization because they can’t see themselves represented in leadership. Directly communicating that their talent and diversity is wanted can make the difference in progress towards more diversity.”

Shannon is one of the Association’s best examples of diversity and inclusion. As its first African-American CEO, he is eager to expand the association’s leadership to reflect and encourage more diversity. This year, AEMP has been intentional about adding more diversity to the AEMP Nominating Committee in order to help hold the Association accountable.

An excellent resource for D&I information can be found at https://diversity.social.