by Moira Alexander

5 ways diversity and inclusion help teams perform better

Sep 03, 2021
Diversity and Inclusion Staff Management

Diversity and inclusion provide organizations with many benefits, including better access to talent and higher levels of engagement and trust.

Team member extends all hands in for a huddle. [unity / teamwork / trust / diversity / inclusion]
Credit: Prostock Studio / Getty Images

High-performing teams don’t just happen. They require keen recruitment, staffing, and training strategies — all of which should focus on creating a diverse and inclusive (D&I) culture. Research shows that inclusive teams perform up to 30% better in high-diversity environments, according to Gartner. This is the result of several key advantages D&I teams can give your organization, including the following.

Access to top talent

Hiring top talent is what every employer wants, but it’s only possible if diverse candidates are all fairly considered. When diversity and inclusion exist, employers give themselves a greater chance of gaining access to a larger talent pool. In turn, this ensures that they can hire employees with the skills, experience, and knowledge needed to build high-performance teams. Employee performance in diverse organizations is 12% higher than in companies with no inclusivity efforts.

Increased sense of belonging

With more 76% of job seekers saying a diverse and inclusive workforce is essential when evaluating companies and job offers, this should be critical for employers. Developing a culture that encourages D&I creates a sense of belonging for all employees. Harvard Business Review reports that having a high sense of belonging can increase job performance by 56% or more, reduce turnover by 50%, and significantly decrease the number of sick days.

Higher levels of trust

Environments that encourage D&I practices promote trust and employee engagement among employees. This trust leads to a feeling of psychological safety, which, in turn, leads to respect. Without either of these, teams and their leaders are unlikely to work well together, much less increase team productivity and performance. Research shows that organizations that trust their employees are more likely to increase their average employee engagement by 76%. This has become extremely important as many organizations shift to a remote or hybrid team model. Trust in the workplace allows employees to feel secure, reduces turnover, and increases engagement.

Increased employee engagement

It’s estimated that 83% of millennials are more actively engaged in their work when their employers support D&I initiatives. There’s a direct relationship between diversity practices and employee engagement. If employees feel valued and included, they are far more likely to become engaged and remain so. When employees are engaged in workplace activities, they are typically more motivated and do their best work. This is often reflected in their individual and team performance. Typically, companies that can achieve higher employee engagement see 20% higher productivity than the competition, and higher productivity increases team and company performance overall.

Better decision-making

With 78% of employees surveyed saying they work for a company that lacks diversity in leadership, it’s bound to impact output and decision-making. When employees feel this way, it hampers their performance. On the surface, it may seem that a team that thinks alike is the best way to make decisions. This is no longer the case: Diversity and inclusion matter. It’s estimated that diverse and inclusive companies are 60% more likely to outperform their peers where decision-making is concerned.

Diversity in leadership is seen as lacking and often impacts innovation. A diverse culture isn’t just about an employee’s physical appearance; it’s about how employees think. Cognitive diversity is estimated to enhance team innovation by up to 20%.

With diversity comes multiple perspectives. When team members bring a variety of backgrounds, cultures, and experiences, they are more likely to solve problems and be innovative. This can lead to more thoroughly vetted results. Leaders are also more likely able to make better decisions based on facts. Inclusive management also optimizes talent and productivity, leading to higher-performing teams.

When teams such as IT have access to a larger talent pool, they are more apt to find high-performing talent based on skills, knowledge, and experience. This requires diversity in leadership for better decision-making and fostering a culture of belonging and trust that can lead to increased engagement and better team performance.