Treating all people equally isn’t just the right thing to do. It’s also good for business. Organizations that discriminate, or are complicit in supporting discrimination against certain groups of people, are at a competitive disadvantage relative to peers that promote inclusivity and tolerance.
Public perceptions of your business matter. In fact, the future success and prosperity of your business depends on it. In addition to violating human rights, bias and discrimination negatively impact a company’s bottom line. In other words: when the profitability and future success of your enterprise is at stake, practicing tolerance is in your company’s best interest. According to the Human Rights Campaign’s 2017 Corporate Equality Index, American businesses are keenly aware of this, knowing that their reputation, profitability, and commitment to providing equal treatment are intrinsically connected.
Recent current events provide a body of evidence in the business case against discrimination, from the number of corporations who spoke out against President Trump’s immigration ban to the musicians and entertainers who canceled tour dates in North Carolina to protest the HB2 bill.
In the spirit of extinguishing any lingering doubts that equality benefits your company’s bottom line, here are 3 reasons why fostering inclusivity, tolerance, and justice for all is a savvy business move.
Exclusion Impairs Profits – But Why?
The response from the business community to President Trump’s immigration ban–that CEOs of major companies, sports leagues and business groups have come out in opposition to the law and the discrimination it sanctions–provides an inside look at the economic impact of supporting diversity and equality.
What does that impact look like? For one, state and local governments that support discriminatory policies, however tacitly, pass on indirect costs and cut into the profits of affected businesses. According to Forbes, North Carolina’s HB2 “bathroom bill” resulted in a $600 million economic loss for the state. The cost of North Carolina’s bathroom policing is consistent with research that indicates how discriminatory laws work to undermine economic growth. According to some economic projections, if we don’t challenge inequality now, the OECD gender pay gap (which is currently 16 percent) will not close for another 95 years. That untapped female potential is estimated to cost the global economy $12 trillion by 2025.
Diversity = More Perspectives, More Creativity
Research suggests that companies which fail to embrace diversity, do so at their own peril. Again, corporate executives shouldn’t focus on inclusion and equality only because it’s the right thing to do. They should also do so because it’s good for their businesses. Successful businesses prioritize hiring the best employees, regardless of those employees’ race, gender, sexual orientation, gender identity, religion, age, or what-have-you. Considering that millennials want to work at socially inclusive organizations, businesses employing a homogenous workforce will surely miss out on hiring the best and brightest young people.
“People are much more willing to give of themselves when they feel that their true selves are being fully recognized and embraced,” Apple CEO Tim Cook says. Cook explains that embracing people’s individuality and identity goes beyond matters of human dignity and civil rights. In Apple’s case, Cook points out that fostering a tolerant and welcoming workplace “also turns out to be great for the creativity that drives our business.” We’ve found that when people feel valued for who they are, they have the comfort and confidence to do the best work of their lives. When people cannot be themselves in the workplace, everyone pays a price–literally and figuratively.
Both economic markets and influential corporate indices reward diversity, and on top of that, research indicates that LGBTQ inclusivity benefits businesses, largely because it improves employee retention rates. Weeding out biases in the hiring process and actively working to recruit from a diverse group of candidates can only help businesses find and retain the best people. Not to mention–when you discriminate, your corporate reputation suffers. When you consider that dealing with a talent shortage ranks among the biggest concerns for CEOs worldwide, the implications of low employee retention look especially bleak. Combine that with the cost of lost credibility (Chick-Fil-A and American Apparel provide good examples of lost credibility) and the full cost of intolerance becomes clearer.
Businesses are an important vehicle when it comes to achieving justice for all. Aligning your business with these values is the right thing to do, it’s good for humanity, and it’s profitable. Businesses have nothing to lose by championing equality.