Diversity & Inclusion: Good for Business?


Julie and Jonathan work at the same tech company.

They both arrived two years ago, they have the same job, are in the same team, have achieved similar results and are both well-valued members of the company. Despite this, Jonathan’s been promoted a few months ago, Julie hasn’t. He earns 25% more than Julie. Julie is one of only 5 women in her 23-person team. She believes she is not always taken as seriously as Jonathan when she voices her ideas to their manager. She often feels she has to prove herself more than her male peers, and like many women working in tech (1,2), says there is a ‘bro culture’, and several of her colleagues’ comments have made her uncomfortable. During the pandemic, she struggled to keep up with the workload, due to the added childcare responsibilities. The rigid and cutthroat work culture meant she found it difficult to request more flexibility in her hours. Jonathan also has children, but his wife took on more childcare responsibilities, and his Human Resources review showed he felt significantly less overwhelmed than Julie in the time when schools were closed. According to research by the Harvard Business Review 40% of women leave their tech company after ten years, compared to 17% of men (3). Which means it’s far more likely Jonathan will still be here moving up the ranks in five years’ time, while Julie will be working somewhere else, likely in a less senior position.

Julie is by no means an exception. She is among many women who feel undervalued compared to their male colleagues. And it’s not just women, but also ethnic minorities. Julie doesn’t work in a diverse environment, and she doesn’t feel included. It’s evident that that has a negative impact on her wellbeing and professional development, but what should prompt her company to care and change its ways?

Diversity and inclusion are important for all of us to have equal opportunities, fair treatment, and to meet our psychological need to feel we belong, whether in the workplace or elsewhere. Companies should care for those reasons alone. But they should also care because diversity and inclusion are good for business.

First off, what is diversity and inclusion in the workplace? Diversity refers to “difference” within a setting, or more specifically, the “different ages, cultural backgrounds, geographies, physical abilities and disabilities, religions, genders, and sexual orientation” within that setting, here the workplace (4,5). Inclusion is more difficult to define but should not be overlooked. Bill Schaninger, director at McKinsey expressed that “most people describe inclusion on two levels: their own direct, felt experience and the way they perceive their organisation more broadly”, giving examples within the workplace such as “the relationship with the boss, the relationship with peers, and the experience of the policies, practices and rules the company writes and enforces (6).” And the data is clear: companies who consider and prioritise diversity and inclusion do better, both in terms of business performance and employee satisfaction (and the two are not mutually exclusive).

Deloitte conducted a 2013 report looking at three Australian businesses in retail, healthcare and manufacturing and gathered information from 1550 employees. They concluded that employees who felt included and perceived their organisation to be “committed to diversity” were 80% more likely to think they worked in a high performing organisation (7). And it was not only how individuals viewed their business that changed, but performance itself. There was in fact a direct correlation between how included an employee felt and individual performance ratings.

The more included employees felt, the better their performance..

... as shown in the graph on the right . Productivity was also directly related to how employees felt within the company. One company’s data showed that if 10% more employees felt included the company’s work attendance increased by six hours per year per employee. In the grand scheme, those hours gained can be hugely significant for a company’s productivity.

More diversity and inclusion mean better business and financial outcomes.

McKinsey’s 2020 report on diversity and inclusion Diversity Wins looked at 1000 companies within 15 countries. Companies in the top quartile for ethnic and gender diversity, performed 36% and 25% better respectfully, in terms of profitability, when compared to those in the fourth quartile for both categories. Despite this, more than a third of the companies had zero women in their executive teams, and only 14% of employees within all executive teams were ethnic minorities. Although there is increasing recognition that diversity is better for business, the progress is slow. Interestingly when comparing the 2020 report with a similar one conducted five years ago, the companies who were most diverse to begin with and those who became more diverse within that period had the greatest performance in profitability, while those who stagnated or declined in gender and ethnic diversity were the lowest-ranking groups in terms of financial performance. It’s clear, the companies who are not embracing diversity are not performing as well as those who are (8).

Currently, only about 15% of executive teams globally are made up of women; and yet a global survey of 22 000 companies found that companies with 30% female executives make 6% more in profit (9).

The Diversity Wins report also found, through individual surveys, that general sentiment on inclusion was only 29% positive, which shows that companies need to work on how employees feel within the workplace. McKinsey’s Race in the workplace research found that many workers, but especially black workers, found there to be a lack of recognition for their work (8).


This lack of recognition for ethnic minorities and women is one of the major barriers for inclusion in the workplace.  In her book Invisible Women, Caroline Criado Perez talks of the ‘myth of meritocracy’. An analysis of 248 performance reviews in US tech companies found that women were more likely to be criticised for their personality than men, and the words employed to describe their behaviours differed from those used for men. Words such as “emotional”, “bossy” and “irrational” were exclusively found in women’s performance reviews. In addition, the merit-based pay plans are significantly biased towards promoting white men: one study found a 25% difference in performance-based bonuses between men and women in the same jobs. And these biases in favour of promoting white men are often unconscious; in fact, Perez points out that studies have shown that “a belief in your own personal objectivity, or a belief that you are not sexist, makes you less objective and more likely to behave in a sexist way”. Bias that gets in the way of diversity and inclusion is omnipresent, despite personal intention and belief in one’s own objectivity (3).

  A lot remains to be done. McKinsey director Bryan Hancock agrees that for things to change, leaders “need to be vulnerable to making mistakes” and recognise that their biases may come in the way of their levels of understanding when it comes to other employees’ experiences within the workplace (7).

So what can we take away from all this? More diversity and inclusion mean better business and financial outcomes. But we’re moving too slowly, and we’re held back by our biases. It’s clear that wanting for things to change isn’t enough. Those in leadership positions need to be empathetic, open to discussion, and recognise that their learned behaviours and preconceptions will get in the way, whether they want them to or not.

This is where Ellpha comes in...

Ellpha aims to tackle bias using AI. Our new platform Talentuum promotes diversity and inclusion by identifying bias within talent assessments.  Our automated talent cycle questionnaires (we call them ‘Talent Growth Plans’) are designed for more objective and equal review of employees or ‘talents’ with pointed questions and a performance-over-personality focus. Most importantly, Talentuum identifies and points out biases within feedback provided, allowing for managers reviewing their employees to stop, reflect and re-evaluate how their unconscious biases may have interfered with their feedback, thus enabling them to improve over time. We promote inclusive and diverse environments by making recruitment, promotion and review decisions as unbiased as possible.

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(1)   White, S. (2021). Women in tech statistics: The hard truths of an uphill battle. https://www.cio.com/ article/3516012/women-in-tech-statistics-the-hard-truths-of-an-uphill-battle.html

(2)   Hacking Tech’s Diversity Problem. (2021). Retrieved 6 July 2021, from https://hbr.org/2014/10/hacking-techs-diversity-problem

(3)   Criado-Perez, C. (2019). Invisible Women: Exposing Data Bias in a World Designed for Men.

(4)   Benefits of diversity in the workplace | Culture Amp. (2021). Retrieved 6 July 2021, from https://www.cultureamp.com/blog/diversity-in-the-workplace-benefits-and-challenges

(5)   Inclusion, D., & the… D. (2021). Diversity vs Inclusion: What’s the difference? | AIHR Digital. Retrieved 6 July 2021, from https://www.digitalhrtech.com/diversity-vs-inclusion/

(6)   The elusive inclusive workplace. (2021). https://www.mckinsey.com/business-functions/organization/our-insights/the-elusive-inclusive-workplace

(7)   Walker, M. (2004). Waiter, There's a Fly in My Soup! Reflections on the Philosophical Gourmet Report. Hypatia19(3), 235-239. doi: 10.1111/j.1527-2001.2004.tb01310.x

(8)   Diversity Wins: How Inclusion Matters (2021). https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters

(9)   Study: Firms with More Women in the C-Suite Are More Profitable. (2021). Retrieved 6 July 2021, from https://www.piie.com/commentary/op-eds/study-firms-more-women-c-suite-are-more-profitable 


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