Strategic Diversity Solutions: The Business Case for Diversity
While diversity is frequently viewed as a social good or an altruistic gesture, the facts prove that diversity is a business operating principle. Unfortunately, the detail is often buried in hundreds of pages of material. The following is a high- level summary of some of the more poignant facts. All sources for the quotes are available at [strategicdiversityadvisors.com].
Diversity is proven to increase stock valuation and ROI:
• “The 100 companies rated lowest in diversity averaged 7.9% annualized stock return; compared to 18.3% for the 100 companies that rated highest”.
• “Companies with the highest representation of women on their top management teams experienced better financial performance than the group of companies with the lowest women’s representation. This finding holds for Return on Equity which was 35.1% higher and total Return to Shareholders which was 34% higher”.
• “Companies that intentionally managed their culture significantly outperformed those that did not”.
An Inclusive workplace reduces the cost of turnover
• “…$64 billion in cost annually is attributed to turnover of women and minority employees”.
• “…the average cost of replacing an employee is approximately 150% of the annual salary”.
• “Unfairness, in the form of everyday inappropriate behaviors, such as stereotyping and public humiliation, is real and prevalent resulting in the voluntary resignation of 2 million women and minorities each year”.
Diversity breeds innovative solutions:
“From a problem-solving team from a diverse population of intelligent agents, a team of randomly selected agents outperforms a team comprised of the best-performing agents.”
Diversity is a business development tool:
• “The buying power of minorities in the US has grown and continues to grow exponentially – 2013 projections are $3,378 billion”.
• “Women-owned firms have an economic impact of $3 trillion annually that translates into the creation and/or maintenance of more than 23 million jobs – 16% of all U.S. jobs”.
In conclusion, Diversity and Inclusion is a business imperative that increases profitability in tangible, measurable ways. Companies that commercialize diversity will reap the financial rewards.
Sara Meyer-Davis is the founder and Managing Partner of Strategic Diversity Advisors. Her firm guides companies in harnessing the commercial value of diversity and provides support in all areas of employee, client and supplier diversity.
Sara Meyer-Davis founded Strategic Diversity Advisors to guide executives in the transformation of costly disjointed Diversity and Inclusion initiatives into a coherent integrated platform for increasing corporate profitability.
Early in her career, Sara learned to provide innovative solutions to business needs. Her proven track record as being “part of the solution” earned her a seat at the table as a full member of leadership teams for divisions the size of large-cap companies where she honed her business acumen and gained unique insight into the corporate decision making process.
Sara’s ability to conceive solutions to questions that have not yet been asked, afforded her access, influence and frequently, management proxy, beyond the scope of her specific responsibilities. Both these provided her the latitude to innovate.
As a Diversity Director, Sara continued to function as an entrepreneur in a large Corporation. Following the mantra, “run diversity like a business”, she moved the needle in terms of client opportunities and employee programs. Sara was responsible for the development and launch of the award winning global leadership behavioral skills development program “Keys to Leadership –Unlocking Potential” for mid-level women and under-represented minorities. The Program proved to significantly increase the retention and promotion rates of participants. Further, as the organization’s first transparent, targeted development program, the initiative paved the way for numerous targeted programs to follow.
Sara Meyer-Davis is a HR Executive with 20 plus years of experience as a Generalist for complex global business functions with a reputation for innovation. As a Specialist, she has expertise in Diversity and Inclusion and best practices in Human Capital Strategy. Sara attributes her success as a Human Capital Executive to her ability to navigate sophisticated corporate environments according to her moral compass; considering not just the legal, but the moral and ethical repercussions of business activities.
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