New Study Points to Diversity and Inclusion as Key Driver to Company Success

A recent study focusing on diversity in the workplace found a strong correlation between diversity and inclusion functions and corporate business strategies that if well-aligned will reap a distinct positive impact on the organization’s reputation, employee retention and financial success.

Global communications firm Weber Shandwick and management consultancy United Minds joined forces with KRC Research to conduct a new diversity study that focuses on the best practices of D&I functions that are well-aligned with the overall business strategy of the company, as well as the roles and responsibilities of chief diversity officers and the challenges facing them today.

“Diversity Officers Today: Paving the Way for Diversity & Inclusion Success,” which was released in September, surveyed 500 senior-level corporate D&I professionals employed at high-revenue companies in the United States. Elizabeth Rizzo, Weber Shandwick’s senior vice president of reputation research, said that the survey was about “their role, their attitude about the D&I function that they work for, and how it is integrated with the rest of the company.” The research categorized D&I professionals into three sections — Well-Aligned, Aligned and Misaligned — along a “D&I alignment continuum.”

After reading extensively about increased visibility on the work and investment that companies were making in D&I, researchers noticed a significant gap in the field. “We were surprised to find that there was very little research available that looked at the role of chief diversity officer as a whole,” said Tai Wingfield, Weber Shandwick’s senior vice president of diversity, equity and inclusion practice. “We thought there was a need to have some sort of research in place to arm chief diversity officers with best practices on what they could do more effectively, and to raise visibility around what this role entails and where it’s headed in the next couple of years.”

Full alignment is achieved when the actions of the D&I function and D&I staff members are integrated with the organization’s planned objectives in order to meet its overall business goals. This alignment has a substantial effect on new hires and resignations. The study shows that D&I activities impact 30 percent of new hires and 13 percent of resignations. Well-aligned companies have a 33 percent rate of position acceptances due to employee satisfaction of D&I at the company, as compared to aligned functions with 28 percent and misaligned functions with 24 percent.

D&I alignment was found to be a key driver of company reputation, as 79 percent of executives in well-aligned functions strongly agreed. This is substantially higher than in aligned D&I functions with 44 percent and misaligned D&I functions with 30 percent.

Financial performance was also positively transformed through D&I. An estimated 66 percent of executives in well-aligned D&I functions strongly agreed with this statement, which was also substantially higher than the 27 percent of executives in aligned D&I functions and the 30 percent in misaligned D&I functions.

“Having an aligned function means that you have a line of sight into the C-suite, that you’re getting the right investment in the space and that you have some sort of partnership with communications and marketing, which is critical in terms of achieving D&I goals and objectives,” Wingfield said. “All of that ladders up to increased reputation benefits, financial performance and better retention and recruitment of diverse talent.”

The biggest challenge that diversity executives face is making the business case for diversity and inclusion, followed by making diversity and inclusion values or outcomes externally visible. “I think that’s why we see the CDOs who are in well-aligned functions with the business note that partnerships between communications and marketing as a best practice, because it’s so important in terms of that external visibility piece,” Wingfield said.

Rizzo said that the most surprising finding within this study was that there are three things standing in the way of achieving full integration and alignment with the business strategy: Not all D&I functions had a dedicated leader (34 percent), many of these positions are only part-time (40 percent), and alignment was not always a top priority for some companies (18 percent).

“That seems to suggest that not every company really realizes the importance of having their D&I function being aligned, or having a seat at the table with the other business strategy goals,” Rizzo said.

As for the future of D&I, the study also found that CDOs are optimistic in their visions for D&I and the expansion of the position in corporate America. Approximately 81 percent have a positive outlook on the future of D&I, and 50 percent predict that most U.S. companies will have chief diversity officer positions in the next five years.