How Diversity and Inclusion is linked to productivity and profitability

21 Oct 20 | Blog

Want to boost productivity and profitability? Trying to attract and retain top talent? Want to boost innovation throughout your organisation? The single approach that can have a transformative impact on your organisation is one you may not have considered. It’s about making more voices heard and having numerous employee experiences, views and opinions feed into your processes.

If you haven’t already guessed, it’s diversity and inclusion – and significant research shows that it’s not simply a nice-to-have. It’s now the business-critical must have that’s being embraced by the world’s top-performing companies.

In this blog post…

Keep ahead in an ever-changing business environment with diversity and inclusion

The benefits of focusing on Diversity and inclusion

  • Increasing productivity and profitability
  • Reducing absenteeism and attrition
  • Improving talent acquisition and retention
  • Increasing in innovation and innovation-related profit

So why is D&I still not a top-of-the-list concern for boardrooms?

  • Good intentions are confused with effective action
  • D&I doesn’t feel profit-focused
  • Senior decision makers can be insulated from D&I issues
  • Diversity and inclusion is seen as too difficult to fix – where do you even begin?

How do you begin to use diversity and inclusion as a force for business performance?

  • Make Diversity and Inclusion tangible
  • Move beyond thinking of individuals and components
  • Use transparency as a force for transformation
  • Use a D&I perspective as an ongoing focus for business improvement

Keep ahead in an ever-changing business environment with diversity and inclusion

A new acronym has recently found a place in business thinking: VUCA. Volatility, uncertainty, complexity and ambiguity. It’s an acronym that describes the conditions we all work within. And these conditions increasingly mean that we need to reshape and rethink the ways we work.

Traditional business thinking, after all, comes from a time when businesses were solid, stable and predictable. In this industrial-age business model, we learned to think of organisations as machines, and the moving parts within them as efficient cogs.

But the world we live in is no longer stable and predictable. Which means the most progressive organisations now think of themselves as ecosystems. And they know that these ecosystems can only survive if they have the ability to adapt and evolve rapidly.

Diversity and inclusion – the practice of actively involving the many voices and experiences of your teams to feed into the business equally – is essential to this evolution. Because if your workforce only values the voices, experiences, perspectives and ideas of a dominant, privileged group, it’s making itself vulnerable.

More tangibly, it’s also costing itself in terms of profit, productivity, innovation, talent attraction and retention.

Recent research shows that companies who actively spearhead diversity and inclusion strategies are 35% more likely to achieve above-average returns with business performance increased by 31%. They’re also 83% more likely to be able to recruit millennials. And where senior management teams are diverse, companies report profit from innovation 19% higher than average.


Does diversity increase productivity?

Once thought of as part of the “softer” side of business, diversity and inclusion is now, for the first time, measurable and tangible. This is thanks to the advent of advanced data analytics – and it means the hard effects of diversity and inclusion on the bottom line are easy to see.

Inclusion consultant at Qlearsite, Evie Samuel said: “Studies have shown that when companies have diversity at board level, they perform better. This is partly because diversity is necessary for greater innovation – different voices and different ways of thinking enable new thinking, and can call out blind spots.


Increasing productivity and profitability

Does diversity increase productivity? What about diversity and profitability? Successive studies show that the more diverse and inclusive an organisation is, the higher their levels of productivity and profit. At a more granular level, high levels of D&I have been strongly linked to faster decision-making and better team cooperation.

At a time when many companies are struggling to improve productivity, this offers a light at the end of the tunnel. Because it’s now a provable fact that taking a more targeted and proactive approach to diversity and inclusion results in a hike in productivity and profit.


Reducing absenteeism and attrition

There is a strong correlation between D&I and employee engagement. A number of reports show that in workforces where there is a combination of diversity and inclusion, engagement is a direct result.

This in turn leads to a reduction in absenteeism – and keeps people in post for longer. In other words, people who feel included at work are more motivated to show up and give it their all. Samuel says: “On the other hand, people who are not engaged and do not feel included and who do not feel their ideas are listened to, are going to do the bare minimum and not feel bad about taking days off.”


Improving talent acquisition and retention

There is a misconception that disengaged people don’t feel included because they can’t be bothered. This, says Samuel, is far from the case.

She adds: “When people become disenfranchised and disengaged, there comes a point when they see no other option but to leave. This is a last resort for them – the last symptom in a wrong situation. It’s what they do when they can’t do anything else.”

And this is happening in many organisations who are struggling to attract and keep the very best people.

“The job market for talent is very competitive,” says Samuel, “If you are not keeping up with diversity and inclusion then you are not going to be able to attract and retain the best talent.”


Increasing innovation and innovation related profit

When you get different people, with different backgrounds and different ways of seeing the world together, you get more ideas. Provided, of course, that there is a fair spread of different people throughout the organisation – and that every single person feels their views and experiences are given equal weight to everyone else’s.

There need to be mechanisms for everyone to have a voice – and there has to be diversity all the way up to the board.

When this happens, the benefits can be significant. According to the Boston Consulting Group, companies with above-average diversity are 19% more innovative.

Learn more about our D&I solution

So why is D&I still not a top-of-the-list concern for boardrooms?

The evidence is – or at least ought to be – compelling. Companies perform much better when they prioritise diversity and inclusion.

Unfortunately, D&I only seems to be taken seriously when it becomes a problem within the business – this is too late. Failing to prioritise Diversity and Inclusion can lead to disaster, take for example the sexism and harassment claims at Uber.

So why isn’t D&I a permanent agenda item at every board meeting?


Good intentions are confused with effective action

No-one wants to lead or be part of an organisation that intentionally or unintentionally marginalises some groups of people. The vast majority of people want to do the right thing. But wishing vaguely that things were different is never going to make anything happen.

This is what makes data analysis so exciting. When you use it to measure your levels of inclusion and diversity, wishes have to become actions – because there is accountability.

Samuel says: “The biggest misconception is to believe that if a company isn’t diverse, then it’s inherently bad. This just isn’t the case. Most people want to do the right thing – but that doesn’t necessarily lead them to taking action.”


D&I doesn’t feel profit-focused

For many years, diversity and inclusion has been seen as a nice-to-do, rather than as a business necessity. And that, largely, has been because while all D&I activity has instinctively “felt” right, there has been no way of measuring it.

Now, of course, diversity, inclusion and root causes can be measured and identified relatively easily using advanced data analytics. But some attitudes to D&I still have some catching up to do.


Senior decision makers can be insulated from D&I issues

Many senior decision makers are members of the most included groups in their organisations – so it can be difficult for them to see that diversity and inclusion are issues.

This, again, is the beauty of data. It shows – rapidly and completely impartially – where issues exist. With the most sophisticated approaches, it can bring the voices of their employees directly to them.

A senior leader may never, for example, have heard his teams describe the board as a “boys’ club”. Or heard BAME or disabled colleagues describe their frustrations at being overlooked.

But with the right technology, all of this is possible. Which can be just what an organisation needs to begin to implement measures for greater profit and productivity.


Diversity and inclusion is seen as too difficult to fix – where do you even begin?

A first step is to use advanced data analysis to assess the levels of diversity and inclusion in your workforce. Qlearsite, for example, allows you to identify how included people feel, area by area of your business. Then it gives you the ability to dive deep and hear the voices of colleagues who feel marginalised – or who have great suggestions that can be actioned.

The insight you gain allows you to target resources and to share progress with your wider teams.

Inclusive organisations have


Better customer service





How do you begin to use D&I as a force for business performance?

If you’re intrigued about the ability of diversity and inclusion to boost business performance, there are a number of steps you can take. And because they’re all linked to the use of data, you can be sure that you’re taking steps that will have an impact.

Make diversity and inclusion tangible

You can’t improve what you can’t measure. So start by analysing your data and gathering insights from people across your whole organisation. With Qlearsite this is quick and easy – and the feedback you get is virtually in real time.

With Qlearsite, you’ll be able to identify any problem areas – as well as any outstanding areas that can be learned from. Then you’ll be able to dive deeper, uncovering different cross-sections of thinking and experience within your organisation.

You’ll learn – possibly for the first time – what your teams are experiencing, how it affects their work and their plans for staying with your company.

Move beyond thinking of individuals and components

Our experience at Qlearsite is that diversity and inclusion is cultural and systemic. Samuel says: “Companies all have their own unwritten rules and ways of working and thinking. Levels of diversity and inclusion are very closely linked to these unwritten rules.”

However, traditionally, D&I issues were positioned as the issues of individuals – the one person who wears a hearing aid, or the one manager who doesn’t quite understand that his comments can be perceived as sexist.

But if you only focus on individuals, you miss the opportunity to address a whole-organisation mindset – one that perhaps unwittingly affords greater opportunities to people of certain ethnicity or types of people.

Use transparency as a force for transformation

Human beings don’t mean to be selfish – but the pressures of modern life mean that it’s sometimes difficult to see the world from other peoples’ perspectives.

This is where sophisticated data gathering can be so powerful. With technology like Qlearsite, all teams can have access to anonymised feedback, showing what working life is like for all groups, across the whole organisation. While it may feel incredible to some individuals that their colleagues are in any way marginalised, comments like, “I would like to be a senior manager, but I don’t feel there is any room for women on the board,” may make them think again.

And in a more positive way, the transparency of being able to show teams that action is being taken and progress being made helps to engender trust.

Use a D&I Perspective as an ongoing focus for business improvement

Improving diversity and inclusion is an ongoing activity. Why? Because society is continually changing, and the diversity of the people within it keeps changing too.

“You have to be prepared to change at the same rate that society changes,” says Samuel, adding: “Because unless you are constantly re-evaluating your culture, you will fall behind.” 

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