The positive impact of Diversity, Equality & Inclusion on tech companies

CWJobs’ What Tech Workers Really Want campaign found that 31% of tech workers believe that a diverse team contributes to creating and maintaining a good company culture. Additionally, research from our 2022 Confidence Index found that 38% of IT decision makers plan to focus on building diverse and equitable teams in the near-future.

Diversity, Equality and Inclusion (DE&I) provides companies many benefits, however it should not be a tick box exercise. DE&I needs to be ingrained in a company’s culture from the recruitment stage, which can be challenging. A lot of companies believe that they’re already promoting a diverse and inclusive culture, however, according to recent research from Gartner, only 40 percent of employees agree that their manager fosters an inclusive environment.

Let’s take a closer look at the positive impact of DE&I on tech companies and the steps they can take to ingrain it into their culture:

Improved company performance

Research from McKinsey reveals that companies who identify as more diverse are 35% more likely to outperform their competitors. Similarly, research from the Harvard Business Review found that the most diverse companies are also the most innovative.

Having diversity of thought within a tech organisation is critical for innovation. When people from different backgrounds, cultures, and lifestyles all contribute to a project, the outcomes are typically more successful as the thought process is more considered. According to Deloitte, diverse thinking can enhance team innovation by up to 20%.

When tech workers feel included, they’re less likely to harness negative emotions towards their employer, are less likely to feel stressed, and therefore more likely to be productive. Having a greater diversity of voices encourages free thinking, which leads to innovation and improved company performance.

Increased profitability

Research from Boston Consulting Group finds that diverse management teams lead to 19% higher revenue. Likewise, a recent report from McKinsey finds that every 10 percent increase in the racial and ethnic diversity of a business’ senior-executive team leads to a 0.8 percent increase in earnings.

These insights are particularly useful to note post-COVID, where many companies are struggling to fill their tech skills gaps. By pro-actively seeking out diverse candidates, not only can companies tap into a wider talent pool, but they can increase their profits at the same time.

Tap into new markets

According to recent research from Harvard Business Review, diverse companies are 70% more likely to capture new markets. People from different backgrounds have knowledge of different market sectors, which can help businesses increase their pool of clients.

When companies introduce people from different social, geographical and cultural backgrounds into a team, they gain a new knowledge base for potential new markets. With the business economy becoming increasingly globalised, hiring a more diverse team gives companies the core skills they need to push the business forward. For example, having workers who can speak a second language, is itself, an opportunity for companies to expand their reach.

Having multiple nationalities and cultural backgrounds within a business can also make it more appealing to the outside world. Many customers want to support businesses that are committed to equality and diversity and provide equal opportunities to people from all backgrounds. In an industry like tech, which is known for having a lack of diversity, DE&I can even be a unique selling point.

Better decision making

A white paper from design intelligence platform Cloverpop finds that diverse companies make better business decisions 87% of the time. They also make decision twice as quick with half the meetings, and improve results by 60%. Companies that actively seek the opinions of minority voices gain a broader perspective on important business issues and those that diverse employees face. Business leaders can then use these insights to incite change, inspire employees and make a difference to company culture.

Diverse thinking within a company leads to better decision-making across the board. It ensures that everyone’s voice is heard and enables companies to consider multiple perspectives, which can lead to creative problem solving.

A larger talent pool

Companies that expand their recruitment searches to include more diverse candidates widen their talent pool and increase their chances of finding the best hire. In the tech sector, seeking out candidates who don’t have a background in technology can help futureproof a business. Just because a candidate doesn’t have the specific skills required for a job, doesn’t mean they don’t have the attributes that can add value to a company.

According to research from Ranstad, 78% of employees value equal workplaces. When companies position themselves as having a pro-active approach to equality and diversity, they appeal to a wider range of potential employees. Having a strong brand identity can attract new talent from every sector. Young people in particular, are acutely aware of a brand’s reputation, so a company needs to ensure that its employees reflect the society in which we live.