The Importance of Diversity and Inclusion in Business Management 

The Importance of Diversity and Inclusion in Business Management 

Business Planning 14th May, 2024 7 Mins Read

You were ecstatic about landing a dream job in the US. But it’s two years down the line. Not only didn’t you get a good appraisal, but you didn’t also have any friends on the floor.  

If you can relate, your workplace needs to up its game in diversity and inclusivity.   

Lack of diversity and inclusion is a common problem in the US. We all talk about diversity and inclusion. However, HRs need to understand why diversity is important.   

Do you want to know why diversity is important in business management? You landed on the right page.  

I will discuss how your company can benefit from diversity and inclusion here. I will also evaluate the current scenario of diversity and inclusion in the US workplace.  

 After reading this blog, you will have a clear idea of the challenges of diversity and inclusion in the USA. So, read till the end.   

Understanding Diversity And Inclusion In Detail  

All companies have a diversity and inclusion policy on paper. It shows that you will not discriminate against people based on specific characteristics in your office. These characteristics are:  

  • Race  
  • Religion  
  • Color of skin  
  • Ethnicity  
  • Age  
  • Cultural backgrounds  
  • Gender  
  • Sexual orientation  

Diversity means that your workforce will have all these differences in reasonable proportions.   

For example, you will not recruit 1 to 2% representatives of the LGBTQ community to claim that you are a diverse company. However, you will not discriminate against them if they apply for a post in your company.  

Inclusion mainly refers to HRM practices that make people feel included and a part of your company, irrespective of their differences.  

Why Diversity is vital in US companies?   

Why Diversity is vital in US companies?   

The private sector of the US is booming. However, your business can grow further if you become more diverse and inclusive. A recent Deloitte study shows that diverse companies are two times more innovative.   

The US private sector is gradually becoming saturated. Now, you need a creative and innovative business approach more than ever, after knowing why diversity is important. However, workplaces in the US need to be more diverse.   

Forbes says that women earn 16% less than men in the US. At the same time, discrimination against older employees is another major issue in the country—over 40% of Americans aged above 40 faced discriminations.   

Now you know why diversity is important in the US workplace.   

Why is diversity vital to grow your business?  

Why is diversity vital to grow your business

Diversity is more than just a standard that you can implement in the book. However, you need to identify how diversity can benefit your business’s growth and sustainability. I will give some use cases here.   

Getting access to a broader talent pool  

It would help if you searched across a wider pool of candidates. You should not limit your search by gender, age, or community while searching for candidates.  For you, it’s not a matter of why diversity is important, but how it will make your business scale. 

Firstly, it will help you to access more candidates with dynamic and unique skill sets. For example, you are missing out if you are not looking for candidates over 40.  

Older employees bring vast experience and understanding of the industry to the table.  

Secondly, you can easily attract top talent, and research shows that 67% of workers want to work in a diverse company.   

Increase in trust and engagement among employees  

Increase in trust and engagement among employees  

Employees are ready to go that extra mile for you if you keep them satisfied and motivated. Again, motivation comes from engagement and inclusion.   

I was wondering How can you drive engagement and inclusion? That’s not rocket science. You must have a workplace health management policy. You can also take better care of the expecting parents in your workplace.   

In the US, only 1 out of 5 HR leaders admit that employees are happy. So now you understand better why diversity is important in US companies.  

But it’s relatively easy to address these issues.   

Maslow’s hierarchy of needs  

This model shows that there is a ladder for the personal and professional needs of employees. No employee wants to be the all-privileged star of the office from the first day.  

They only want competitive salaries and job security in the first place. These are called physiological needs and safety needs. Gradually, they want recognition and belongingness. So, US companies initially focus on getting the basics right.   

Give a stable job and a compatible salary. Then, make them feel comfortable and valued. Small actions like giving token rewards and recognition can motivate employees.   

(Link: https://www.verywellmind.com/what-is-maslows-hierarchy-of-needs-4136760)  

Improved decision making  

Experts say that diverse teams can make better decisions. Cloverpop analyzed 600 business decisions taken by 200 executives. It was found that diverse teams made 60% more relevant and accurate decisions.   

Any decision made by a gender-diverse team was 73% better than the decisions of individual leaders. However, US companies must go a long way to get these benefits. Women’s earnings are 8% lower than men’s in the US.   

This gap widens in the case of the aged employees. This is another practical example for you to understand why diversity is important.  

Improvement in performance  

Diversity improves the group performance of any company. Experts say that initially, there might be confusion and cultural conflicts in the workplace. However, with time, diverse teams become the most resourceful and capable.   

Diverse employees try to understand and respect mutual perspectives.   

McKinsey posted in a report that:  

“For every 10 percent increase in gender diversity, EBIT rose by 3.5 percent.”  

Many big companies need help to control their diversity needs from the headquarters. So, they develop ’employee resource groups’. These groups play a crucial role in improving workplace diversity.   

To learn how an employee resource group improves D&I, read the article on: The Role of Employee Resource Groups in Enhancing Workplace Diversity.  

Most diverse companies in the US  

Here, we will see how some reputed US companies became D&I champions. Now that you know why diversity is important, you should understand how to increase your company’s diversity. If you are an employee, it’s a great chance to learn the best D&I techniques.  

You can also recommend that your company implement some of these strategies.   

Netflix  

Netflix  

Netflix is a video streaming company. It is a global organization from the US. They are one of the champions of diversity and inclusion in the US.   

They were guessing what was different about their approach. Nothing. They only had a broad perspective and avoided bias. That’s why Netflix had over 50% of its female workforce in 2021.   

Paypal  

Paypal  

I am a great fan of PayPal’s D&I strategies. They are a payment processing company. All of us could use their services in the US.   

The company has different initiatives and resource groups to improve diversity in its workforce. Some of these are:  

  • “Veteran Jobs mission”  
  • “Lesbians Who Tech Summit “and  
  • “Hispanic Alliance for Career Enhancement”  

Walmart  

Walmart  

America’s own Walmart is also trying to be a star in the diversity game. They employ over 2 million people (about the population of Nebraska) globally. They are the biggest recruiters in the US.   

Walmart worked on two main areas of diversity growth.  

Areas of diversity Strategies followed by Walmart 
Women empowerment Hourly to hourly promotion rate for the female employees 
Racial diversity Ensuring at least 50% of the workforce is represented by people of color in the US 

Other diverse emerging companies  

Other new and emerging companies try to be diverse from day 1. The modern ideals of business ethics lead these companies.  

Some of these brands are Salesforce, TIAA, Progressive and others.   

Challenges of Implementation  

The biggest reason American workplaces are not diverse is their lack of focus and persistence. Most companies have a diverse policy on paper.   

There needs to be scientific measures to understand areas of diversity growth. There is no day-to-day monitoring to help employees facing discrimination.   

Conclusion  

Companies that can get the basics right have become more diverse. I recommend that all companies have a diverse recruitment policy. As a result, employees will have a favorable mindset toward diversity since they join.  

In the long run, you will benefit more if you have the right diversity policy. However, you must know why diversity is important before creating a diversity policy.   

There are different areas where US workplaces need to improve. The main areas are the gender representation gap, gender pay gap, age discrimination, and others.  

Improvement in D & I can increase the quality of business decisions. Now, customers also want a diverse company to serve them. If you wish to retain your competitive advantage in the US market, it’s time to play a different game.

tags

Diversity Diversity and Inclusion US companies

Ankita Tripathy loves to write about food and the Hallyu Wave in particular. During her free time, she enjoys looking at the sky or reading books while sipping a cup of hot coffee. Her favourite niches are food, music, lifestyle, travel, and Korean Pop music and drama.

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