The enhanced focus on DEI post-George Floyd sparked a flurry of race and ethnicity target setting. But the hiring slowdown that’s since emerged has hampered those representation efforts. Companies can no longer hire their way to diversity, prompting employers to pivot to inclusion.
The business case for inclusion, at face value, can seem like a harder sell. Representation is concrete, tangible, and such wins are more easily measurable. For instance, a 25% increase in Hispanic representation at the executive rank. Inclusion, however, is more nebulous and sometimes ill-defined, making it challenging to tie related metrics to broader business goals. But companies that fail to set and communicate clear metrics around inclusion and support those ambitions with specific initiatives and programs could leave money on the table and see larger talent ramifications, according to a new report from Bain & Company.
“Inclusion is critical for enabling and enhancing and sustaining diversity outcomes. But it's got a broader applicability to business outcomes and all talent pools,” says Julie Coffman, a partner and chief diversity officer at the global management consulting firm.
Bain's survey of more than 6,000 employees across four countries found that employees at companies that have intentionally invested in inclusion since 2020 are three times more likely to feel fully included than those who have not seen such investment from their employers. Employees who feel included—which Coffman defines as feeling trusted, valued, rewarded, listened to, challenged, respected, and in an environment where they can freely take smart risks—are better able to operate at their highest potential, unlocking and igniting the creativity and problem-solving capacity needed to drive superior business results.
Diversity is undoubtedly important. But without inclusion, its benefits are severely constrained. Bain’s data found that highly diverse teams double a company’s capacity for innovation, while teams that are just highly inclusive without being diverse increase innovative capacity threefold. Those figures are certainly nothing to scoff at, but take it a step further, and the data shows the multiplier rises to four when teams are both diverse and inclusive.
It’s worth emphasizing that inclusion must be intentional. In practice, that requires companies to hone in on different population groups, assessing what’s needed from an affinity group perspective or the systems and processes that need revamping so all employees feel they’re on an even playing field and can grow and prosper in the organization.
One of the report’s key takeaways is the importance of selectively bolstering investments for utmost business impact. In other words, looking beyond marginalized demographics and zeroing in on specific teams, roles, or functions where inclusion and the myriad benefits it generates can maximize profitability. That includes departments like call centers where frontline employee interactions with diverse customers may help generate new ideas for improving customer experience. Other functions where inclusion can exert positive influence include research and development (R&D) or marketing teams to maximize innovation and problem-solving skills and better resonate with a broader population set.
Imagine a new product launch team that incorporates R&D specialists, marketers, technologists, and customer care experts. “It’s a heterogeneous team coming together to bring a product to launch, and they bring with them different lived experiences, backgrounds, ages, and potentially ethnic and racial identities. But they might not be used to working together,” Coffman says. That’s where inclusion flexes its muscle. “If the leadership structure around that team prioritizes inclusion investments upfront and makes all those people feel trusted, valued, and like they can respectfully challenge each other, you’re going to get a better work product, a faster timeline, and all the benefits of a more high-functioning team.”
Ruth Umoh
@ruthumohnews
ruth.umoh@fortune.com
