Founder & Principal at Tributaries Consulting. Colorado River Basin historian, river runner, writer, sometimes long(ish) distance trail runner.
11 Key Diversity & Inclusion Statistics For The Workplace
Diversity, equity, and inclusion, or DEI, have been hot topics in the business community over the past few years. You’ve probably heard these topics discussed in meetings, sought out a company that focuses on incorporating DEI initiatives into its culture or spearheaded a program yourself.
If these are unfamiliar topics, you’re probably wondering what these terms mean in a business context, and why they’re important. Let’s dive in!
Psst. If you love these statistics or want to share them, we've compiled this easy-to-read fact sheet:
Diversity refers to who’s at work: who is recruited, hired, and promoted by a company. In other words, diversity is the representation of a range of traits and experiences in a company’s workforce. These characteristics include gender, race, physical ability, religion, age, and socioeconomic status, among others—or, as defined by Gallup, “the full spectrum of human demographic differences.”
While equality suggests that all people should be treated the same, equity asks us to take unique experiences and backgrounds into consideration. Equity requires an understanding of disparities between different groups of people due to marginalization or discrimination. According to UIowa, "Being equitable means acknowledging and addressing structural inequalities—historic and current—that advantage some and disadvantage others. Equal treatment results in equity only if everyone starts with equal access to opportunities."
Inclusion refers to how people feel at work. A company’s workforce may be diverse, but if employees do not feel safe, welcomed, and valued, that company isn’t inclusive and will not perform to its highest potential. Point blank, inclusion is the degree to which employees feel “valued, respected, accepted, and encouraged to fully participate in the organization.”
The Benefits of DEI
The benefits of implementing DEI initiatives in the workplace are wide-ranging and varied—there’s literally no downside! From attracting the most qualified employees and creating a happy workforce with high job satisfaction to fostering innovation and greater financial success, the companies that have the highest rates of diversity and inclusion are the ones that succeed.
So why do some companies balk? Implementing DEI initiatives takes a lot of introspection about a company’s internal practices and oftentimes, personal biases. If your leadership team or key stakeholders need a bit of a nudge, we’ve gathered some of the most compelling statistics around. Know it, show it, champion it—more diversity and inclusion at your company have only benefits.
Employees can't be expected to leave their race and background at the door. Here's why you should embrace diversity, instead.
Statistics that prove why you should incorporate DEI initiatives
Growing demand from employees for diverse, inclusive workplaces
1. The millennial and Gen Z generations are the most diverse in history: only 56% of the 87 million millennials in the country are white, as compared to 75% of the 76 million members of the baby boomer generation. (CNN Money)
The U.S. population, and therefore the nation’s workforce, is becoming increasingly diverse. In 2020, the percentage of people who identify as white alone dropped to 57.8% from 63.7% in 2010. According to the US Census Bureau, by 2044, groups that are currently minorities will become the majority.
This change is based on three factors: first, members of the baby boomer generation are reaching retirement age and leaving the workforce. Birthrates are falling among the white population. And younger Americans (under the age of 44) are increasingly members of minority groups—and these younger folks are seeking out workplaces that are focused on and committed to creating workplaces that reflect the country’s demographics and in which they feel welcome and respected.
2. 67% of job seekers consider workplace diversity an important factor when considering employment opportunities, and more than 50% of current employees want their workplace to do more to increase diversity. (Glassdoor)
According to a survey done by Glassdoor, a diverse workplace is one of the main factors potential employees take into account when considering a job.
A diverse workplace proved important to a majority of white workers, but it was of paramount importance to minority job seekers: 72% of women (v. 62% of men), 89% of African Americans, 80% of Asians, and 70% of Latinos ranked workforce diversity as important in their job search.
This means that creating a diverse and inclusive workplace is central to attracting talented employees and setting your company up for success.
Need help getting your leadership team on board? Share the PDF copy of these stats:
Impact on the work environment
3. Beyond changing national demographics, why are workers seeking more diverse and inclusive workplaces? Because 45% of American workers experienced discrimination and/or harassment in the past year. (Gallup)
Just over half (55%) of American workers agree that their place of work has D&I policies in place; yes, this is a majority of workers, but it means that nearly half of the workforce is employed by organizations that aren’t creating safe and welcoming environments for all of their employees. This affects employee safety, well-being, and retention, and stunts the economic success of a company.
4. 50% of women report experiencing microaggressions and 14% experienced harassment in the last year. 93% of women think reporting non-inclusive behaviors will negatively impact their careers. (UPL)
The majority of women in the workforce also feel excluded from decision-making, do not feel comfortable expressing their opinions, and do not feel as though they can succeed according to Culture Amp.
Only 40% of women feel satisfied with the decision-making process at their organization (versus 70% of men), which leads to job dissatisfaction and poor employee retention.
5. When it comes to race and seniority level, over 75% of managers are white. The senior manager level is 83% and the executive level is 85% white. (US Census Bureau)
A lack of diversity in the leadership of an organization hampers innovation, prohibits members of minority groups from being recognized for their contributions, and fails to meet client expectations.
6. Companies with executive levels comprised of over 30% women are 48% more likely to outperform companies with less gender diversity. (McKinsey)
Companies with more women in leadership positions consistently outperform companies with less than a third of their leadership positions filled by women.
However, a look at the Fortune Global 500 list illustrates the continued disparity of women at the executive level: only 5% of companies are run by women. For the Fortune 500 list of companies in the US, only 8.8% of companies are run by women.
7. Companies in the top quartile for being ethnically and culturally diverse are 36% more profitable than those in the bottom quartile. (McKinsey)
Creating an inclusive culture and a workplace where employees feel respected, valued, and comfortable being themselves isn’t just good common sense—it’s also good for your company’s bottom line.
With diverse and inclusive companies outperforming those who haven’t made the effort to recruit and retain diverse talent or create a welcoming and innovative environment, there’s no question that DEI initiatives are good for business.
8. Companies with greater-than-average diversity had 19% more innovation revenues. (Harvard Business Review)
A study by Harvard Business Review found that the most diverse companies were also the most innovative, allowing them to market a greater range of products to consumers.
In this study, HBR calculated each company’s diversity across six dimensions: migration, industry, career path, gender, education, and age. They found that industry, country of origin, and gender had the biggest impacts, but by thinking about diversity in a multidimensional way companies were able to lead in innovation.
9. 83% of millennials are actively engaged at work when they believe the culture of their organization is inclusive. (Deloitte)
Considering millennials make up the majority of the workforce (39.4% as of 2020), and Gen Z-ers are the most diverse generation in history, it's increasingly important for companies to focus on creating a culture of belonging for their employees.
According to Gallup, companies scoring in the top quarter for employee engagement are 23% more profitable and experience up to 43% less turnover than those in the bottom quarter.
10. Employees with a greater sense of belonging and inclusion at work report 167% higher eNPS scores. (Harvard Business Review)
Employee net promoter score or "eNPS" is the likelihood that a current employee would recommend your company as a great place to work. It can also be an indicator of company culture, a predictor of turnover, and a gauge of overall employee engagement.
11. A strong sense of belonging among employees was also found to result in a 50% lower risk of turnover and a 56% increase in job performance. (Harvard Business Review)
Experts at HBR also wanted to understand the impact of exclusion so they ran a series of tests. They ultimately discovered that those who felt excluded put in less effort for their teams than those who felt included.
They also mention that allyship from another person on the team can protect employees from exclusion and the negative impacts on the team as a result.
With these stats, you can see why you should make diversity, equity, and inclusion top priorities at your company: D&I initiatives make workplaces smarter and more successful, while also contributing to increased job satisfaction, employee retention, and revenue.
Don’t get left behind—improved DEI is a competitive advantage for any organization. The Bonusly platform helps thousands of companies build a culture of purpose, progress, and belonging for their employees.
To build resilient, more inclusive teams, download our free eBook today:
What are some of the most effective D&I initiatives you've seen at a company? 👇
It was day six of a seven-day whitewater rafting course with the Colorado Outward Bound School, where I worked as an instructor. I had handed over control of our boat to one of my participants—let’s call him Mike—to guide us through the day’s whitewater. Mike had miscalculated his route through the rapid and hit a rock, which promptly launched me out of my seat in the back of the raft.
One minute I was sitting in the back of a raft—in the next, I was in the water, being swept along the waves of a Class III rapid on the Colorado River. 🌊
After a short, refreshing swim, I pulled myself back into the raft before anybody else realized I’d had a temporary out-of-boat experience. As we headed into smoother water, we had a laugh about tossing the guide into the river, followed by a discussion in which Mike—who had been nervous to step up and guide the boat—identified how he could have run the rapid differently, what he did well, and gave some pointers for others when it was their turn to guide the raft.
This scenario could have gone very differently had my co-instructors and I not spent the prior six days creating an environment in which our participants felt comfortable stepping outside of their comfort zones to try things like guiding the raft, making mistakes, and giving and receiving feedback about each others’ performances. Instead, everyone learned and grew from Mike’s experience as the boat captain.
Mike’s experience was possible because we, as a group, had created a psychologically safe environment where people were open to being vulnerable, building relationships, and trying—and failing at—new things, with the assurance that their fellow team members had their backs.
Psychological safety is necessary not only in a remote canyon in the southwestern desert, but also in the workplace.
Creating a psychologically safe environment for employees is crucial to workers’ overall health and wellness—and to your business’s bottom line, as well. Read on to discover what psychological safety is, how it affects the workplace and your employees, what benefits you can expect from it, and how to create it at your organization.
Want More? Read our Essential Guide to Employee Engagement
What is psychological safety?
When a workplace is psychologically safe, it means that employees are comfortable being vulnerable with each other and taking risks, without fear of punishment or embarrassment.
It’s not necessarily about being nice to each other. Dr. Amy Edmonson, professor at the Harvard Business School and a leading researcher on team performance and psychological safety, explains: “What [psychological safety is] about is candor; what it’s about is being direct, taking risks, being willing to say, ‘I screwed that up.’ Being willing to ask for help when you’re in over your head.”
PS: What does it mean to be candid? Check out this post on radical candor from Kim Scott, author of Radical Candor: Fully Revised & Updated Edition: Be a Kick-Ass Boss Without Losing Your Humanity.
A psychologically safe environment is the result of a team or workplace’s group norms—the formally or informally agreed-upon code of conduct for a collection of people. These norms determine employee conduct in the workplace, and will usually supersede any individual behaviors in favor of the team’s modus operandi, as a much-touted Google study discovered.
Group norms can be positive or negative: they can foster defensiveness, secrecy, and a fear of making mistakes. Or—when thoughtfully discussed and agreed on by group members—they can build rapport and drive innovation.
Establishing healthy and collaboratively created group norms as a team is a necessity to cultivating psychological safety in the workplace.
The impact of psychologically safe workplace cultures on business performance
This probably won’t come as a surprise, but the teams and coworkers you spend time with affect your job satisfaction, productivity, performance, and overall wellness.
A positive, psychologically safe workplace cultivates a happy work environment and increases employee productivity and innovation. Meanwhile, a negative, emotionally unsafe organization creates feelings of isolation, distrust of coworkers and managers, job dissatisfaction, and decreased employee output.
According to Gallup, by increasing the number of employees who feel that their opinions and ideas are valued by their coworkers and managers from 3 in 10 to 6 in 10, organizations “could realize a 27% reduction in turnover, a 40% reduction in safety incidents and a 12% increase in productivity.” Those results are significant!
When we feel psychologically unsafe in the workplace, our bodies and brains react just as though we’re physically unsafe—like we’re being chased by a tiger, rather than freaking out about messing up a presentation. This state puts us into fight-or-flight mode, which means we aren’t able to use our full mental capacity to achieve maximum focus, productivity, or creativity.
We become more open-minded, resilient, motivated, and persistent when we feel safe. Humor increases, as does solution-finding and divergent thinking—the cognitive process underlying creativity.
–Dr. Barbara Fredrickson, University of North Carolina
So what are the benefits of cultivating psychological safety in your workplace?
- Innovation and market leadership
As the Harvard Business Review reported, “Studies show that psychological safety allows for moderate risk-taking, speaking your mind, creativity, and sticking your neck out without fear of having it cut off—just the types of behavior that lead to market breakthroughs.” Seems pretty clear to us!
- Increased productivity
Google’s study of how teams work concluded that “if a company wants to outstrip its competitors, it needs to influence not only how people work but also how they work together.” In other words, creating a psychologically safe environment is the key factor to getting teams to work together in the best and most efficient way.
- Creation of an inclusive workplace
As we’ve written about before, diversity and inclusion efforts are key to running a cutting-edge business. Psychological safety is central to an inclusive workplace. This kind of workplace community fosters strong relationships, a willingness to be vulnerable with coworkers, and the creation of a “collective IQ” that are hallmarks of psychologically safe teams.
Fostering an environment of psychological safety in the workplace
As Google discovered, creating a psychologically safe organizational culture can be messy, and there’s certainly no one-size-fits-every-team solution—and that’s okay! Communication and empathy are “the building blocks of forging real connections” that lead to employees feeling safe trying new things and putting new ideas out there.
Thus, the way this is implemented and what the group norms end up looking like will differ from team to team and company to company. By keeping in mind the goals of communication and empathy, you can be as creative as you like in your approach to building a healthy team. Here are some ideas to get started:
Lead by example
At Google, one team leader gathered the team at an off-site retreat with the goal of getting to know each other, and from there, establish foundations for healthier group culture. He asked his employees to share one personal thing that others wouldn’t know about them, and modeled vulnerability by sharing his own struggle with Stage 4 cancer. After this revelation, the team shared openly about their lives and reported stronger relationships and greater cohesion after the retreat. While this is a very personal example, the willingness of the team leader to share his life with his team directly contributed to its success going forward.
Focus on learning
As OfficeVibe reports, “If your team misses the mark on a project, take the time to understand what went wrong instead of rushing to find the solution and moving to the next task. Position failure and challenges as opportunities to learn and problem solve together as a team.” This will turn any project into a learning opportunity, rather than a fail-or-no-fail situation in which team members refuse to innovate for fear of failing.
Work collaboratively to create buy-in
At Outward Bound and in the classroom, I’ve involved participants and students in creating their own psychologically safe community in whatever way works for them. I ask them what they believe makes a good, healthy community—what are the values that contribute to feeling supported, valued, healthy, and ready to learn? After we’ve created a list of group norms, we all pledge to uphold those values in our commitment to everyone doing their part to cultivate the kind of community we want.
This way, it’s not just up to me to police people’s actions or statements, but rather empowers team members to hold each other accountable to the norms they’ve agreed upon.
See, psychological safety isn't just for taking risks in the wild! 🐻
It’s an important part of our everyday lives that makes our workplaces collaborative, supportive, and innovative. It’s where we and our employees want to work for the good of the group.
Creating a psychologically safe workplace can be difficult, vulnerable, and uncomfortable at times, but the personal and organizational benefits you gain from the process are worth the effort.
Looking for other ways to make the most of your company's organizational culture? Start here: