Building a Compelling Business Case for Diversity, Equity, and Inclusion

Hello, change-makers and forward-thinking leaders! Today, let’s discuss a crucial topic that’s reshaping the business landscape: diversity, equity, and inclusion (DEI). The push for DEI is more than just a trend—it’s a strategic imperative. A PwC study found that 87% of organisations are now actively focused on DEI initiatives. In fact, Deloitte reports that improving societal impact is among the top concerns for CEOs in 2024.

Despite this growing emphasis, Chief Diversity Officers (CDOs) and Chief Human Resource Officers (CHROs) still face significant challenges. One of the biggest hurdles is securing buy-in from leadership and other key stakeholders. To address this, it’s essential to develop a strategy that highlights the benefits of DEI and outlines how these goals will be achieved. Let’s explore how you can build a compelling business case for DEI, quantify its value, and secure that crucial buy-in from stakeholders.

What is Diversity, Equity, and Inclusion (DEI)?

If you’re reading this, you likely understand DEI, but your leadership team may need a clear explanation. DEI stands for diversity, equity, and inclusion—frameworks aimed at promoting fair treatment and full participation of all people, especially those historically underrepresented or discriminated against based on identity or disability.

Many companies are investing in DEI initiatives. A recent Workday survey of 2,600 global business leaders—including CEOs and leaders from HR, finance, IT, and sales—revealed that 78% said the importance of DEI increased in the past 12 months, and 85% have a budget for DEI initiatives, up 11% from last year. What are the top reasons for supporting DEI? Positively impacting business success (39%), improving employee engagement (40%) and wellbeing (41%), and attracting a diverse workforce (43%).

How to Build a Winning Business Case for DEI

Explaining DEI is just the beginning. The next step is turning this knowledge into actionable strategies for your leadership team. Here’s a four-step guide to help you build a compelling DEI business case and drive organisational change:

1. Identify Existing Costs

Securing buy-in often hinges on highlighting the current costs associated with a lack of diversity and inclusion. High-performing employees might leave due to frustration with the lack of inclusion, and replacing them is costly. Moreover, potential talent may be deterred by a non-inclusive culture, impacting your recruitment efforts. Additionally, failing to invest in DEI could mean losing customers or investors who value diversity benchmarks. Emphasising these costs can underline the urgency and importance of DEI initiatives.

2. Highlight Potential Benefits

Diverse companies are more profitable, innovative, and better at decision-making. According to McKinsey, companies with higher gender diversity are 21% more likely to experience increased profitability, while ethnically diverse companies are 35% more likely to achieve better financial returns. Beyond economic gains, a diverse and inclusive organisation attracts top talent, with nearly half of millennials prioritising diverse companies when job hunting.

3. Decide What to Measure

People analytics can make diversity and inclusion measurable. Focus on metrics such as:

  • Female and Minority Ratios: Track representation across the organisation, departments, locations, and job functions.
  • Compa-Ratio: Compare an employee’s pay to the midpoint of the pay range for their role to identify any pay disparities.
  • Performance Ratings: Compare ratings across different groups to uncover any unconscious bias.

Any disparities in these metrics highlight areas needing attention and serve as key focus points for your DEI efforts.

4. Start Small and Prove the Benefits

Don’t try to tackle everything at once. Start with a single, pressing challenge and measure your progress. Focus on relevant metrics for this challenge, track progress over time, and use the data to demonstrate the impact of your interventions. Success in one area can build momentum and gradually address additional challenges, continually proving the benefits of your DEI initiatives.

Conclusion

Securing leadership buy-in for DEI initiatives is a significant challenge, but presenting a well-structured strategy that highlights tangible benefits and clear steps can make a difference. With the roadmap provided, you have the tools to build a compelling business case for diversity. Remember, creating an inclusive and equitable workplace is an ongoing journey requiring continuous effort, data-driven strategies, and a willingness to adapt. Start small, demonstrate the benefits, and gradually tackle more significant challenges to ensure the long-term success of your DEI initiatives.

Stay tuned for more insights and strategies, and remember—WINC HR is here to support you every step of the way!

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about the author

Portrait of Karl Wood with circle frame.

Karl Wood is a global HR and employment professional who has an impeccable record in delivering HR solutions for industry leading firms. Known for his characteristic creativity, Karl champions ideas that promote growth, profit and a positive organisational identity.