A version of this article originally appeared on Principal.com
Business leaders can't afford to treat diversity, equity, and inclusion (DEI) as afterthoughts.
Even before 2020's explicit conversations and public protests on race and civil rights, statistics showed that a diverse business has as much to do with profit as principles.
A 2020 McKinsey study tracked six years of data and found that more ethnically and culturally diverse businesses are as much as 36% more profitable than the least diverse companies. The profitability gap widens to 48% between the most and least diverse businesses according to gender alone.
"The business case is glaring," says Miriam Lewis, chief inclusion officer for Principal. "Diverse companies with inclusive cultures outperform more homogenous companies. Revenue, market share, smarter teams, retention--there's just no lack of evidence.
"While it's always the right thing to do to have equity in our organizations, it's also the profitable thing to do."
That's been the experience at BigBear.ai, a tech firm and military contractor specializing in artificial intelligence and data analytics. Based in Maryland, the business also has operations in four other states, including California.
"The workforce has grown only more dynamic," says Sean Battle, vice chairman and chief strategy officer for BigBear.ai. "More diversity makes a workplace more rewarding for employees and makes businesses better by improving ingenuity."
One of company's latest efforts is the Women of BigBear.ai, which will support women in the workplace by identifying and creating opportunities for their professional advancement and growth.
"Diversity and inclusion are crucial in ensuring we bring our best to market," Battle says. "When employees see themselves in our efforts, and our voice echoes their concerns, they feel like an essential part of the team."
The key to building a sustainable DEI strategy, Lewis says, is making sure it aligns with your overall business strategy and structure. It starts with more inclusive recruiting and hiring to attract diverse talent, but the effort also must be embedded throughout the organization.
Here are three ways to think about DEI and draw it deeper into your daily business:
1. Remote and hybrid work can enable a more diverse staff
The pandemic instilled a new comfort with remote work that allows many businesses to expand their recruiting footprint.
"In many cases a better norm has been established because you're now considering talent outside of your local city or region, which could mean more diverse communities to recruit from," Lewis says.
2. DEI is core to your products and business
Customers who see themselves and their concerns truly reflected in the products they buy become loyal to that business and brand. That's why customer experience (CX) and inclusion really are the same thing, says Carlos Navarro, assistant vice president of customer experience for Principal.
"If you want to compete in the marketplace, you have to be inclusive," he says. "And being inclusive means taking all customers' needs, goals, and motivations to heart."
That approach is reflected in the Principal Hola Futuro campaign to bring culturally relevant financial resources to the Hispanic community, so that businesses can better nurture their Hispanic employees. Beyond simply offering a Spanish-language website, it provides digital enrollment and financial education entirely designed around the lives of its target audience. There's also a Spanish version of the Principal app for retirement plan participants.
"We know that Hispanics are typically digital natives and are over-indexed on mobile, so we focused digital education and building out more mobile resources," Navarro says. "We make sure the information we provide aligns with what's important to them culturally."
Hola Futuro is a model for more work to come.
3. Your business can make progress in DEI if you just get started
Smaller businesses may lack the dedicated DEI executives and large committees of corporate America, but you don't need vast resources to make real progress.
"As tennis icon Arthur Ashe once said, 'Start where you are. Use what you have. Do what you can,'" Lewis says. A good starting point is to spark employee conversations about inclusive work practices and to raise awareness of unconscious bias. And do it in an environment of mutual respect where employees feel that it's safe to share their experiences and views.
"Because we all have brains, we all have unconscious biases," Lewis says. "It's not a character flaw."
"A holistic approach to diversity and inclusion is a challenge," Lewis says. "But for those businesses that are really thinking big picture, it will be a win--one that we can all benefit from in the long run."
If your business lacks a human resources department or other infrastructure to help improve diversity, equity, and inclusion in the workplace:
- LinkedIn Learning offers free educational modules on topics such as unconscious bias and inclusive conversations.
- The Massachusetts Institute of Technology offers a variety of resources to help enhance DEI in the workplace.
- See how Principal approaches inclusion in the workplace as part of our overall corporate social responsibility.
BigBear.ai is not an affiliate of any company of the Principal Financial Group. The subject matter in this communication is educational only and provided with the understanding that Principal and its employees are not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other financial professionals and other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.
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