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Why Are Companies Focused On Diversity, Equity, and Inclusion?

Updated: May 24, 2023

Over the past decade, companies big and small have dedicated their resources to focus on diversity, equity and inclusion (DE&I). This trend is just beginning and opportunities for students of diverse backgrounds will only increase from here. The average Fortune 500 company spends $1.5 Million on DE&I projects annually (source). Overall, this shows a country-wide push towards a more diverse workforce within each individual company.


However, the world of business still has a long way to go in regards to internal DE&I (SHRM). For starters, there are only three black CEOs of Fortune 500 companies and only 41 women. The calculus is changing. Companies, more now than ever, are realizing the great potential in DE&I, especially the powerful impact it can have on a team, their business, and their employees.


So the question remains, what reasons have companies identified to diversify their teams? And how can this diversity help you in your career journey? We’ll explore these questions (and more!) below.



Why Are Companies Focused On DE&I?


The short answer is it helps teams function and deliver better, well-rounded solutions. Groups of similar people with similar backgrounds tend to think in similar ways, and thus are less likely to see the big picture. On the other hand, more diverse teams make better decisions 87% of the time compared to lesser diverse groups ( source) because diverse teams have the remarkable advantage of various backgrounds and ways of thought that contribute to the team’s decision-making.


Innovative solutions and designs are another big perk of diverse companies. A study from Harvard Business Review found that diverse companies have a 19% higher innovation revenue than less diverse companies. Diverse teams are generally more creative because they’re able to utilize various points of view, an ability that enhances creativity and surcharges ideas. The more viewpoints you are aware of, the better you can provide innovative solutions that non-diverse teams wouldn’t be able to come up with.


Diverse teams are only strong if their minority members are comfortable speaking up to share their opinions. This is where equity and inclusion come into play. It’s important to note that companies with diverse teams are NOT by default better than companies without ( source). These teams need to be inclusive in regards to the different ideas and lifestyles coming from within the team. When this happens, diverse teams thrive and work together to create the best outcomes.



How This Helps You


One of the main employee benefits of diversity, equity, and inclusion is getting to be a part of a team that comes up with a wide variety of ideas, has a deep level of understanding, and is able to offer you a more valuable experience in the workplace. The difference between a diverse team and a more homogenous team is vast, especially when you’re working with them day-in and day-out. A dysfunctional team will make the workday much more stressful and less enjoyable.


Your workday could also be more efficient in a diverse culture. Research shown in the Harvard Business Review found that diverse teams solve problems faster and get more done than those teams with more cognitively similar members. Another study through HBR found that diverse teams also make decisions 60 percent quicker than non-diverse teams. These two shortcuts working in conjunction with each other could make your workday a much easier one.



How to Find DE&I-Rich Companies


It’s no question that working with diverse, equitable, and inclusive companies is more than desirable. To aid in your search for DE&I in companies, use the following tips.


Ask during your interview- “What steps have you taken to further diversify your workforce?” The answer to this question will show you the degree to which the company cares about diversity, which will give you a feel for the company culture.


Take a look at the top 20 Fortune 500 companies with the best ratings on diversity and inclusion to find companies already doing well in the DE&I space. This can help cut back on research time and give you a leg-up in finding diverse workplaces.


Get an even better feel for the culture by asking multiple employees the hard question: What’s it really like to work for this company? Reaching out to these employees can be as easy as a LinkedIn direct message, or as complex as finding their phone numbers and giving them a call. No matter how you do it, do not underestimate the importance of this step. Learning insider information on the company’s culture can save you valuable time and future headaches, as you avoid joining a potentially negative company culture.


 

Diversity, equity, and inclusion have become increasingly crucial for both companies and future employees to keep their eyes on. The many benefits associated with diversifying teams have pushed companies to do everything in their power to diversify their internal teams. For many of the same reasons, we should be looking for diverse companies to work for. This could be the deciding factor between loving the team you work with versus daydreaming about a new job.


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