One key fact that is dawning on organisations worldwide is, diversity is not just a nice-to-have warm-and-fuzzy piece to scribble onto their website. It is instead a strategic business asset!

In our latest paper, ’The Strategic Role of Diversity in Enhancing Business Outcomes: Case Studies And Analysis’, we do a deep dive into this topic, finding that companies who genuinely embrace diversity, equity and inclusion do yield positive financial results. This comes from one of the most prescient questions we get is, how does diversity in fact lead to higher returns on investment? And what are the strategies we can use to leverage it?

Through nine case studies, including big names like Microsoft, Heineken, Salesforce, and Mastercard, we demonstrate the tangible benefits of diversity and inclusion in the workplace, thus proving it’s not just about doing good, it’s also good business. Diversity and inclusion, done right, is about boosting profitability, market share, and long-term sustainability, making a diverse workplace a fundamental part of a successful business strategy.

Case Study Spotlight: Mastercard

Demonstrating how diversity translates into business outcomes, we examined several organisations. The first of these, and one of the most compelling, is Mastercard.

As a global leader in the payments industry, Mastercard has made Diversity, Equity, and Inclusion (DEI) a core part of its strategic approach, perceiving it as vital for long-term economic growth and return on investment (ROI).

Mastercard’s strategy is built on the notion that a diverse workforce fuels innovation, sharpens decision-making, and boosts overall business performance. Their diversity strategies are designed to create an inclusive workplace that is reflective of the diverse communities they serve worldwide.

Here are some key examples from their strategy:

1. Addressing the Gender Pay Gap

By 2023, Mastercard had successfully closed their global median pay gap for women within their organisation to 96.4% of male employees’ median pay, up 1.7% from 2022. This commitment to equity helps them attract and retain top talent, reducing turnover costs and enhancing productivity.

2. Boosting Diverse Leadership

Mastercard have also set ambitious goals to increase the representation of black-racialised leaders in senior roles within the U.S. By 2023, they had achieved an 11% year-over-year increase in the number of leaders who identify as black in the Vice President level and above, demonstrating tangible progress in diversifying their leadership structure.

3. The Clear ROI of diversity

Mastercard’s financial data reflects the tangible impact of its diversity initiatives. In 2023, the company reported a net revenue of $25.1 billion, a 13% increase from the previous year. This growth can be at least partly attributed to their robust diversity strategy, which has enhanced their reputation, attracted diverse talent, and opened doors to new markets and customer segments. Their experience illustrates how diversity improves performance and outcomes.

(To explore detailed case studies from all nine companies, including Microsoft, Heineken, and Salesforce, dive into our full research paper for the complete picture!)

The Missing Piece: Understanding Your Diversity Data

Although we know diversity is crucial for driving business success, many companies struggle with the practical side of making it work and yielding the rewards.

Our research highlights that many organisations are missing out on collecting richer, more nuanced data about their workforce. For example, while many companies, such as Microsoft and Salesforce, track gender and age, our study found that few publicly report on other essential aspects of identity, for example:

• Cultural heritage
• Languages spoken
• Worldviews/religions
• Ancestry/cultures
• And specific details on sexuality or long-term conditions/disability.

This lack of deeper data means organisations often have “problem areas” – areas of diversity that may be overlooked or inadequately addressed by traditional diversity initiatives. Our study, however, found that Amazon Web Services (AWS) stands out from the pack by collecting data across all these diverse fields of personal identity, thus providing a far more comprehensive picture of their workforce than competitors.  This shows that when the gathering of nuanced data is prioritised, it is definitely possible.

Furthermore, we found a significant deficiency in the implementation of inclusive self-identification (self-ID) processes across many major companies. Ensuring all employees, regardless of their background, are accurately and inclusively represented in diversity data is critical for creating a workplace where all staff feel recognised and valued. This inclusivity cannot be understated for boosting employee engagement and productivity.

Why This Matters to Leaders: Unlocking the Full Potential of Diversity

For leaders striving to fully harness the power of diversity, collecting and thoroughly understanding comprehensive diversity data is truly essential. Relying solely on basic demographic figures often means missing out on crucial insights and revealing “problem areas” within the workforce, such as details about cultural heritage, languages spoken, or the diverse worldviews held by staff. Moving beyond a surface-level understanding of diversity facilitates leaders in embedding these principles strategically into the core of their business, ultimately unlocking greater innovation and adaptability.

Here’s what leaders can do:

• Develop Smarter DEI Strategies: Implement robust data collection methods that go beyond the basics in terms of demographics. Encourage inclusive self-identification processes to capture the full spectrum of diversity within your organisation.
• Boost Business Performance & ROI: Use comprehensive diversity data to inform strategic business decisions. Track the correlation between specific DEI initiatives and key performance indicators (KPIs) to demonstrate tangible ROI.
• Drive Transformative Impact: Champion the integration of diversity data into all aspects of strategic planning, from talent acquisition to product development and market expansion. Use data to measure progress and continuously refine your approach.

By embracing the systematic collection and analysis of this deeper diversity data, leaders gain the clarity needed to transform their diversity efforts into a powerful engine for long-term business success!