Diversity, equity and inclusion are important for today's businesses to continue to thrive.
There have been some big shifts in the demographics of the U.S. over the last decade. Data from the latest census shows that the population is getting older as well as more racially and ethnically diverse. Diversity in America is increasing every year.
As the overall demographics of the country change, so will the makeup of our workforce. By 2024, Deloitte projects employees over the age of 55 will make up 24.8% of the working population, as compared to 11.9% in 1994. Women are also expected to make up a larger portion of the overall U.S. workforce, rising from 46.8% of the workforce in 2014 to 47.2% in 2024. And, by 2024, less than 60% of the U.S. labor force is expected to be defined as “white non-Hispanic.”
What does diversity mean?
First, let’s start with the basics. Diversity refers to the inherent differences that exist amongst a group of people. Diversity manifests in traits such as age, race, gender, religion, sexual orientation and even cultural diversity, like socioeconomic status, religious beliefs and education.
Diversity is often mentioned in the same breath as equity and inclusion. Commonly abbreviated as “DEI”, diversity, equity and inclusion are separate practices.
Equity refers to providing someone (e.g., a business owner or employee from an underrepresented group) the support they need to be successful. Equality refers to giving everyone the same thing.
Inclusion has to do with creating a supportive, welcoming and respectful environment at work for people of all backgrounds to participate. Inclusion is about taking action: dedicating resources and time to creating a space that embraces all perspectives and employee needs. This might include founding employee resource groups, offering mentorship programs or requiring employees to participate in diversity training.
Diversity, equity and inclusion can all help businesses create vibrant, thriving companies. Beyond a moral imperative, diversity, equity and inclusion can benefit business owners and broader communities alike.
Why diversity is important
Diversity plays a crucial role in growing our national economy, as well as in the success of American business:
- One report found that there are 9.1 million women-owned businesses that generate a total of $1.4 trillion in sales, according to the National Association of Women Business Owners.
- Another McKinsey study found that the national GDP would add $25 billion if just 1% more disabled people were hired.
- The American economy stands to gain $8 trillion by 2050 simply by closing the racial equity gap.
Likewise, there have been many studies that show the benefit of diversity in the workplace for individual businesses. Statistically, merchants that increase diversity and inclusion in the workplace have 19% higher innovation revenues, a 35% performance advantage over their counterparts, and are 36% more profitable.
Studies show diverse teams are better at problem-solving, decision-making and innovating. Companies with an inclusive culture are not only considered a great place to work by employees, but also highly regarded by consumers. Some of the most diverse companies aren’t only successful in their industry; they also score highly on employee engagement, customer brand loyalty, and Net Promoter Scores.
Strengthening diverse businesses
The COVID-19 pandemic impacted all small businesses, but minority-owned businesses were disproportionately affected. A special report by the U.S. Chamber of Commerce and MetLife found that, as of August 2020, two in three (66%) minority small businesses were concerned about having to permanently close their business, versus 57% for non-minority small businesses.
The U.S. Chamber of Commerce Foundation launched the Save Small Business Fund to deliver immediate financial assistance to small business owners who were reeling from shutdowns. Nearly 50% of recipients were minority-owned businesses; 47% were women-owned.
Other partners have announced similar initiatives. These campaigns aim to provide financial assistance to businesses that will contribute to the growth of the national economy.
Diversity and inclusion in the workplace
Diversity and inclusion go hand-in-hand. To attract diverse candidates, it helps to have an inclusive culture, and vice versa.
Correspondingly, there are many ways to create an inclusive culture that is welcoming to all employees. A good place to start is with a diversity and inclusion statement, which is much like a mission and values statement.
That statement can be used to guide onboarding and activities such as training, and public-facing commitments like volunteering or community events. Consider your budget and listen to your employees; they may have ideas for improving your existing culture, too.
