The ROI of DEI: How Diversity, Equity, and Inclusion Drive Business Success

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There’s a lot of attention on diversity, inclusion, and equity efforts lately. From massive corporations and international brands to small businesses and startups, DEI is taking center stage. Being a diverse and inclusive company means that everyone is welcome and has the ability to make change.

DEI isn’t just a PR strategy, and it shouldn’t be thought of that way. It can impact your company’s success in the marketplace. Curious to know how or why? Below are three ways a DEI strategy can drive business success and impact your bottom line.

1. Reduces Groupthink

A major advantage of DEI is that it can discourage groupthink. This is a phenomenon when individuals agree with one another for the sake of cohesiveness. The main issue with groupthink is that it can lead to a lack of creativity or innovation. Because of this, groupthink can be problematic for businesses that are looking to disrupt the industry. Groupthink can propel stagnancy and mediocrity as employees move on with a decision without putting much thought into it.

Groupthink in the workplace can look like immediate, irrational decision-making. Members of a team go with the consensus of the group or leader rather than thinking about the potential consequences. Self-censorship is also present with groupthink. Members of the team may not feel comfortable speaking up despite knowing the team’s decision is faulty. A business is more likely to fail when poor decisions after the poor decision is made or when no new, innovative ideas are being generated.

One way to reduce the probability of groupthink from occurring in the first place is to bring in an outside DEI speaker. Inviting someone who is not an employee to speak can be a more influential experience. Employees know and recognize the types of talks their CEO, chief operating officer, and chief HR officer will give. This isn’t to say they aren’t meaningful, but they may be redundant. By bringing in someone new, employees may be more open to potential change, and you may find a new spark of fire within the team as a whole.

2. Fosters a Larger Talent Pool

With DEI in mind, the talent pool opens up. Rather than looking for someone that matches or aligns perfectly with the current company culture, hiring managers are seeking diverse talent.

They are emphasizing inclusive hiring, meaning the playing field is level for all individuals who apply to the role. This helps eliminate hiring and recruitment biases too.

A diverse hire brings in an outside perspective, a new way of thinking that can propel the business forward. Of course, you can’t just hire a bunch of people with diverse backgrounds and call it a day. Even if the hired employees are helping to drive business success, they aren’t guaranteed to stay. If the company isn’t set up in a way for these individuals to thrive, they will leave. To avoid this, the company must value equality and practice retention strategies.

This can look like establishing more inclusive meetings and group working sessions. As a leader, you can ask the quieter members of your team for their thoughts and input. It also means giving credit where it is due. Employees want to be recognized for their opinions and their achievements. Lastly, using respectful and inclusive language is critical in today’s workplace; always ask a new teammate how they want to be addressed, even if it may seem obvious to you.

3. Improve Company Reputation

Lastly, DEI impacts your business’ reputation amongst current employees, prospective candidates, and consumers. Current employees, as well as prospective candidates, often want their workplace to focus on diversity and inclusion. They want to feel like they are part of a team that respects and values individuals from various backgrounds. Employees want to feel valued and want to show up each day knowing they can be 100% themselves without any repercussions.

Consumers are also becoming more socially conscious, electing to shop at companies that focus on diversity. Millennials and Gen Z consumers, in particular, are more adamant in considering inclusivity when it comes to their purchase behaviors. If a company isn’t viewed as being inclusive or faces backlash on the diversity front, consumers may shop elsewhere. Walmart, Netflix, and Microsoft have either failed to prioritize DEI or have come under fire for laying off people of color.

On the other hand, Marriott is a prime example of a company that has focused on DEI efforts for the better. Despite its large scale, 66% of the company’s total workforce is diverse, and half of the U.S.’s leadership team is diverse. The hotel and resort company has been recognized as one of the World’s Best Multinational Workplaces and as one of America’s top employers for diversity. This focused DEI effort may be contributing to the company’s higher profits — from 2021 to 2022; the company saw an annual gross profit of over 62%.


The research speaks for itself. When companies have more gender diversity in their top leadership positions, they are 25% more likely to make better profits than other companies. And when it comes to having people from different ethnic and cultural backgrounds in important roles, the companies that are the most diverse outperform those that are the least diverse by 36% in terms of profitability.

These stats prove that diverse companies are more competitive in the marketplace. So while focusing on DEI requires time, effort, and money, it is well worth the investment.

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