Calculating the Data Driven Value of

Diversity Equity and Inclusion using ROI Metrics

In recent years, "Diversity, Equity and Inclusion" (DE&I) has acquired a key role in corporate strategic planning. Why is diversity and inclusion in the workplace so important to driving business outcomes today? Employees in diverse and inclusive organizations show 26% more team collaboration and 18% more team commitment than those in non-inclusive organizations (CEB/Gartner). More importantly, employees who feel their point of view is heard and understood at work are 4.6 times more likely to feel empowered to perform their best work (Salesforce).

Research done by the organization “Great Place to Work” has substantiated these numbers and their survey data has further shown there is a direct correlation between the impact of a businesses’ focused approach to encouraging a diverse and inclusive workplace with a resulting positive return on corporate investment via:

  • Higher revenue growth
  • Greater readiness to innovate
  • Increased ability to recruit a diverse talent pool
  • 5.4 times higher employee retention

Great Places to Work goes on to say that inclusion in the workplace is one of the most important keys to retention. Their research on company culture has shown when employees trust they will be treated fairly regardless of race, gender, sexual orientation or age, they are:

  • 9.8 times more likely to look forward to going to work
  • 6.3 times more likely to have pride in their work
  • 5.4 times more likely to want to stay a long time at their company

In this tight labor market, it is also crucial to note that newly-hired team members cite DE&I as a primary consideration in their choice of employers. Nearly 40% of employees surveyed by Deloitte University’s “Leadership Center for Inclusion” stated they would leave their current organization for a more inclusive environment, and 80% stated that inclusion was important to them when selecting a new employer.

Because of this increased utilization of internal resources on professional development, hiring outreach efforts, promotion/selection practices, and other DE&I initiatives (not just training efforts), businesses have developed a series of key performance indicators to link a concrete return on investment (ROI) to not only use metrics to measure the success of these programs, but to link these efforts directly to overall organizational impact on revenues.

An example of ROI metrics in use would include utilizing internal business intelligence data and reporting to measure leadership diversity profiles, which then in turn leads to a review of any additional equity problems regarding wage disparity and/or mobility gaps. By looking at these numbers and then creating goals to address issues, corporations can effectively make changes within the organization that will increase employee satisfaction, which in turn drives results.

The list of ROI metrics that can be used to measure program outcomes is extensive, but starting with the basics via an employee satisfaction survey is an excellent way to begin benchmarking and use those scores as an initial starting point. Data already in use has shown that workplace inclusion and belonging have critical implications for employee experience.

High belonging is linked to a 56% increase in job performance, 75% reduction in sick days, and 50% drop in turnover risk, according to the Harvard Business Review in their 2019 article entitled, “The Value of Belonging at Work.”

How does this employee's increase in job performance impact a company’s overall ROI? Deloitte’s survey goes on to demonstrate that organizations with an inclusive culture are three times as likely to be high performing and eight times more likely to achieve better business outcomes. This data is further supported by a 2019 report compiled by McKinsey which indicates that “…companies in the top quartile for gender diversity on executive teams were 25 percent more likely to have above-average profitability than companies in the fourth quartile – up from 21 percent in 2017 and 15 percent in 2014…”

Lastly, in a consumer-driven industry, DE&I matters. Because of trending events in society (both pre- and post-pandemic) consumers are now expecting the companies they do business with will invest in these social-change initiatives. And most importantly, those companies will rethink processes to further promote diversity, equity and inclusion for their workforces towards ending systemic and ongoing inequity issues of the past. Consumer lack of support for companies that continue to fail in this area will see decreases in annual revenues as a result, with an obvious negative impact to their bottom line.

In summary, whether DE&I programming is focused on attracting top talent, creating an inclusive environment, concentrating on profitability, or all of the above, the data shows that a more diverse and inclusive workforce is advantageous for the health and welfare of our employees, our businesses, and the communities we serve.


Sources Cited:

  1. https://www.gartner.com/en/human-resources/insights/diversity-equity-inclusion

  2. https://www.salesforce.com/blog/diversity-in-the-workplace/

  3. https://deiintheworkplace.com/the-new-roi-return-on-inclusion

  4. https://www.greatplacetowork.com/resources/blog/why-is-diversity-inclusion-in-the-workplace-important

  5. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-about-deloitte-unleashing-power-of-inclusion.pdf

  6. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters