How to Make the Business Case for DEI

Making the business case for DEI initiatives can be a difficult task. Company leaders might understa...

Posted by Berkshire on September 15 2023

Making the business case for DEI initiatives can be a difficult task. Company leaders might understand the moral and practical imperative of a workplace that provides opportunities for all, but they can struggle to quantify the tangible benefits of investing in diversity, equity, and inclusion. Even as HR leaders continue arguing for DEI as the right thing to do, they must demonstrate how DEI initiatives contribute to better business outcomes in the modern economy.

More companies are recognizing the business case for DEI. As of 2021, 83% of organizations surveyed by WorldatWork reported investing in DEI initiatives, with 29% embracing DEI work for the first time during the previous year. However, by 2023, DDI research found an increase in companies without a DEI program, suggesting that much work remains to be done. 

Explore how embracing DEI initiatives can lead to increased employee engagement and retention, improved innovation, and greater financial success — and how to communicate those benefits to senior leadership.

What Is Diversity, Equity, and Inclusion (DEI)?

DEI at work refers to the ideas and practices of valuing all individuals regardless of their gender, race, age, sexual orientation, religion, physical ability, or any other form of individual difference. 

Diversity means embracing a wide variety of backgrounds, perspectives, and talents. Equity is the practice of providing fair treatment and access to opportunities for everyone and recognizing the different needs of diverse individuals. Inclusion is the practice of creating an environment where everyone feels welcome and respected, and all voices are heard. 

By emphasizing these values, organizations can create an environment that's safe, supportive, and inclusive for all employees.

Why Is a DEI Business Case Important?

Making a DEI business case is an important step in gaining buy-in from leadership to make a financial investment in DEI initiatives. A well-crafted business case can demonstrate to leaders the potential return on investment of DEI efforts and the potential cost savings and competitive advantage associated with them. 

By emphasizing the positive outcomes that DEI initiatives can have on the bottom line, you can secure the backing of leadership and the financial resources needed to make meaningful progress.

3 Business Benefits of DEI in the Workplace

A key part of your business case for DEI is demonstrating how investing in a DEI strategy can improve business outcomes. Here are some proven business benefits to help you make your case to senior leadership.

Higher Productivity and Better Financial Performance

Improving organizational DEI can have a positive impact on your financial performance. When employees feel that their voices are heard, their diversity respected, and their contributions valued, they're more likely to feel engaged and motivated to contribute to the organization’s success. This can lead to increased productivity, collaboration, and innovation, which can all result in better financial performance. 

For example, shareholder advocacy nonprofit As You Sow examined data from the U.S. Equal Employment Opportunity Commission to find the impact of greater racial and ethnic representation in management on financial performance. When management diversity reflects employee diversity, the report reveals, employers are more likely to see positive financial outcomes. 

Additionally, demonstrating a commitment to DEI can help strengthen your reputation on the market. Increasingly, consumers are looking to spend their money on brands that don’t just claim to support social issues but actually “walk the talk.” A positive reputation as an equitable employer can increase customer loyalty and help build a larger customer base, contributing to better financial performance.

Improved Employee Engagement and Retention

DEI initiatives can help reduce employee turnover by ensuring that all employees have a fair and equal opportunity to succeed. DEI initiatives can help reduce bias in key aspects of the employment lifecycle, such as hiring and promotions, while also providing mentorship and support to marginalized groups. 

If employees from diverse backgrounds feel that your promotion and compensation systems are fair, for example, they’re far more likely to remain loyal to your organization. These initiatives can help create a more inclusive work environment where employees from diverse backgrounds can feel accepted as valued members of your team.

DEI initiatives also enhance employee engagement and retention by creating an environment where employees can bring their whole, best selves to work — and still find room to grow. In fact, research shows that employees who feel satisfied with their organization’s DEI efforts tend to be twice as engaged as employees who feel their employers can do more for DEI at work. By creating an equitable workplace, DEI initiatives can help employees feel more valued and engaged with their work. 

Increased Innovation, Creativity, and Problem Solving

DEI initiatives ultimately create a workplace where everyone can feel safe and respected, which gives employees permission to think outside the box and come up with innovative solutions to complex problems. This can lead to more creative approaches to projects, and new perspectives on daily tasks. 

DEI initiatives also encourage collaboration and open communication, allowing employees to share their ideas with others and work together to come up with the best solution. Additionally, by embracing different backgrounds and perspectives, organizations can find unique and creative solutions that may have been overlooked otherwise. For example, modern companies need to respond quickly to shifting customer needs — and companies with a diverse pool of high-potential leaders were four times more successful in doing so.

Even as far back as 2017, researchers found that diverse teams make better decisions 87% of the time. That’s even more important now, when the pace of change at work has increased exponentially and every business must embrace creativity and innovation to survive.

3 Opportunity Costs of Not Investing in DEI Efforts

Aside from listing the benefits of DEI, part of your business case for DEI involves covering the risks of not investing in the right programs and the toll that gap can take on business outcomes. Check out some opportunity costs of not investing in DEI initiatives.

Financial Impact and Missed Profit Opportunities

Investing in DEI initiatives is essential to maintain a competitive advantage in the market and maximize profits. Without a focus on diversity, equity, and inclusion, organizations are more likely to suffer from higher turnover rates and lower employee morale. This can lead to a lack of productivity and reduced efficiency, resulting in higher costs and lower profits. 

Additionally, not investing in DEI initiatives can lead to a lack of diversity among a company's customers, suppliers and partners. This can limit a company's ability to reach new markets and attract new talent, leading to a further decrease in profits. Leading companies recognize the edge that partnering with diverse suppliers can provide, McKinsey reports, and have committed more than $50 billion to partnering with minority- and women-owned business enterprises over the next 10 years.

Additionally, federal contracting organizations that don’t invest in achieving a diverse and equitable workforce are at risk of non-compliance with Office of Federal Contract Compliance Programs regulations, which can result in fines or other financial losses. To minimize the risk, work with a trusted affirmative action solutions provider, like Berkshire.

Negative Perception of Your Employer Brand

Companies that don’t invest in DEI initiatives may find their employer brand associated with a lack of diversity, and this can lead to a negative public perception that can be hard to counteract. Without a commitment to creating a diverse, equitable and inclusive workplace, potential employees, customers and partners may feel unwelcome and unrepresented. This can lead to distrust, as well as a lack of enthusiasm or engagement with your company. 

According to research from, most job seekers (86%) seriously consider a company’s reputation for investing in DEI initiatives when deciding where to apply, and more than half (62%) say they’d turn down a job offer from a company that doesn’t support DEI efforts. A poor reputation for DEI can seriously limit your talent pool, putting your long-term talent strategy at risk.

Additionally, a lack of DEI initiatives can lead to a sense of exclusion among employees, especially those from historically marginalized backgrounds. This can lead to lower morale, higher attrition rates, and decreased job satisfaction — all of which take a toll on your employer brand.

Missed Ideas and Perspectives

Not investing in DEI initiatives can lead to a homogenous environment, where the same ideas and perspectives are repeated endlessly. 

While companies have made some progress, intersectionality continues to play a big role in how supported employees feel and how encouraged they are to share their ideas. According to research from Arizent, less than half (47%) of non-white women feel supported by colleagues in positions of power, for example, and only 56% report that they feel encouraged to pursue their curiosity at work (compared to 73% of white women).

Failure to accept and encourage new ideas can lead to stagnation, where the same solutions to problems are proposed and the same issues are discussed without any new insight. This lack of diversity also can lead to an organization missing out on potential opportunities and markets that could be beneficial to their success.

3 Steps to Making Your Business Case for Diversity, Equity, and Inclusion

While external statistics can be convincing, your business case for a greater investment in DEI initiatives needs to be tied to your specific organization. Take these steps to assemble a business case your peers in leadership can’t afford to ignore.

Research the Current State of DEI in Your Organization

First, assess your current state. Begin by looking at your organization’s internal demographics and compare them to the talent available on the market. This will give you a snapshot of the current composition of the organization and provide a baseline for what diversity currently looks like. 

From there, conduct surveys or focus groups with employees to assess the level of inclusion in your workplace. Ask questions related to the level of diversity awareness and respect for diversity among co-workers. Also inquire about the level of perceived support for diversity initiatives and programs. Use this data to identify areas where you can improve your commitment to DEI.

Finally, benchmarking against other organizations in the industry can provide further insight into best practices and potential areas of improvement.

Gather and Analyze Data to Quantify the Benefits of DEI

Gathering data to quantify the benefits of DEI starts with measuring the current landscape of the organization. This could include surveying employees to get a better understanding of their engagement with the organization and their overall satisfaction, as well as tracking the number of qualified applicants and successful hires. These DEI metrics provide a baseline to measure the progress of DEI initiatives.

From there, look for specific insights to help you make your case. For example, you might point out how teams composed of diverse members perform relative to homogeneous teams. Or, you could point to evidence of diverse leaders encouraging greater innovation and experimentation.

Present Your Case to Business Leaders

Present the business case for DEI to stakeholders, senior management, and other decision-makers to gain support for DEI initiatives. Explain why these initiatives are necessary and use the data you’ve gathered to demonstrate how they'll benefit the organization.

Most business cases are presented at annual planning meetings. Do research into what other leaders are presenting to see what programs are competing for the dollars you need for DEI work. Where possible, make allies by helping other department heads and company leaders see how investing in DEI efforts can support their initiatives and priorities, too.

Deliver on Your Promise

Once you’ve won over the investment and commitment of top company leaders, you need to develop a plan for making sure that the initiatives are properly implemented and tracked to measure their success. This should include specific goals, metrics, and timelines. Assess your actual progress against your projections and adjust your expectations as you go.

The importance of DEI programs can’t be overstated. Making the business case for DEI can be a challenge, but standing up for what’s right has positive business ramifications that leaders simply can’t afford to ignore. By bringing these potential benefits to the attention of your peers in leadership, you set the stage for higher performance and better business outcomes.

Ready to take the next steps in your DEI journey? Berkshire can help

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