Is Diversity Enough? DEI's Impact on Business Performance

Laurette Bennhold-Samaan • January 12, 2025

“Leaders must acknowledge that increasing demographic diversity does not, by itself, increase effectiveness; what matters is how an organization harnesses diversity, and whether it’s willing to reshape its power structure.” 


 - Harvard Business Review 

Today, workforces are just as diverse as the global markets they serve. With a growing number of organizations talking about diversity, equity and inclusion (DEI) – questions are often raised around its impact on employees and organizations as a whole. Why does DEI matter? Are diverse workforces really that much more productive? And is diversity alone enough to benefit a workforce and the businesses that employ them? 


The variety of perspectives and ideas that diverse workforces bring together do contribute a wealth of insights and approaches that can lead to groundbreaking solutions and more effective decision-making. But embracing diversity isn’t just about hiring a diverse workforce; it's about leveraging that workforce's full spectrum of human experience to achieve superior performance. Companies that cultivate diverse and inclusive teams – that support and leverage diversity – are better equipped to navigate complex challenges, attract and retain top talent, and sustain long-term growth and success. Companies that don’t are often less productive, due to miscommunications, misunderstandings, and employee disengagement, distrust and discord.   

 

Diversity is Viewed Differently from Culture to Culture 

Before we take a look at diversity’s potential, it’s important to note that diversity itself is viewed differently, depending on where you are in the world. For instance, in Canada, there has been an increased focus on the inclusion of indigenous people. Nigeria presents opportunities for growth, due to biases around the intersectionality of gender, ethnicity and socio-economic backgrounds. In India, discussions around DEI will require addressing patriarchal and caste systems. With this in mind, stakeholders should always be mindful of the cultural, social, and geo-specific norms and biases that exist in a given location when addressing DEI-related discussions around organizational goals and opportunities for growth. 


Diversity’s Impact on Team Success 

A recent LinkedIn study revealed some compelling evidence about the ways diversity impacts business performance: 


  • 60% of respondents said that diversity within their sales team has contributed to their teams’ success 
  • Organizations in the top quartile for gender diversity have a +25% likelihood of financially outperforming their peers 
  • Organizations in the top quartile for ethnic diversity have a +36% likelihood of financial outperformance 
  • Diverse companies earn 2.5x higher cash flow per employee 
  • Inclusive teams are over 35% more productive 
  • Diverse teams make better decisions 87% of the time

The Disconnect: Building Diverse Teams vs. Fostering Them 

Many companies commit to DEI but often stop at the D: diversity. Assuming that hiring a diverse workforce alone is enough, they often find themselves surprised that their business isn’t performing in ways the above statistics imply it should. Or they may discredit the findings altogether. But to truly see the results that a diverse workforce can provide and fulfill the duty of care they have to their employees, attention also needs to be given to fostering equity and global inclusion. Only then will employees feel seen, valued and engaged, workforces be more able to collaborate and innovate, and companies benefit from the downstream impacts of their DEI initiatives. 


Understanding DEI: The Three Pillars 

To truly benefit from DEI, it's important to understand its three pillars: 


  • Diversity - The presence of differences within a given setting, including race, gender, age, and cultural experiences 
  • Equity - Ensuring fair treatment, opportunities, and advancement while striving to identify and eliminate barriers that have prevented the full participation of some groups. 
  • Inclusion - Creating environments in which any individual or group can be and feel welcomed, respected, supported, and valued. 

How Organizations Can Help Themselves: Develop a Mindful DEI Initiative 

To create an effective DEI initiative, start with an internal assessment of your workforce, policies, and culture. Next, define areas for improvement and set clear, measurable goals. After securing commitment from all levels of the organization, provide DEI training, establish employee resource groups and mentorship programs, and integrate DEI principles into all aspects of the organization. Finally, review and adjust policies on a regular basis, maintain open communication, and create safe spaces for feedback to ensure continuous improvement.


How NetExpat Can Help: Enhancing DEI Initiatives Through Cultural Agility 

When supported by all three aspects of DEI, diverse teams are more successful because 1) they bring varied perspectives, experiences, and approaches to problem-solving and 2) those perspectives are encouraged and proactively leveraged. Working closely with a global advisory services provider builds on an organization’s DEI initiatives by fostering cultural agility within your organization. When viewed through a DEI lens, cultural agility significantly enhances DEI efforts and interactions with colleagues, clients and with customers, fostering a cohesive culture and workforce that’s better positioned to solve problems and make decisions. Below are just a few of the advantages: 

  • Enhanced Creativity and Innovation

    Different backgrounds provide a broader range of ideas and solutions, making diverse teams more likely to challenge the status quo and think outside the box 

  • Stronger Decision-Making Ability

    Varied perspectives encourage thorough evaluation of options, reducing groupthink, and ensuring that diverse teams represent the perspectives and behaviors of global markets 

  • Broader Market Insight

    Diverse teams understand and cater to diverse customer bases, providing cultural insights that are critical for developing effective global market strategies 

  • Improved Problem-Solving

    Different skill sets and experiences lead to more robust solutions, since diversity fosters debate and discussion, which improves critical thinking 

  • Higher Employee Engagement and Retention

    Inclusive environments boost morale and productivity, with employees from different backgrounds learning from one another, enhancing their growth and satisfaction 

  • Greater Resilience and Adaptability

    Diverse teams adapt better to change by drawing from a wider range of experiences, allowing them to anticipate and respond effectively to unexpected challenges. 

  • Increased Reputation and Competitive Advantage

    Companies with diverse teams are seen as more socially responsible and attractive to top talent, and a reputation for diversity helps attract customers who value inclusion. 

Unlocking Diversity’s Potential 

The Harvard Business Review has argued that companies that adopt a “radically new way of understanding and leveraging diversity could reap the real and full benefits of a diverse workforce… not only recruiting and retaining more people from underrepresented ‘identity groups’ but also tapping their identity-related knowledge and experiences as resources for learning how the organization could perform its core work better.” 


When companies take a mindful approach to DEI, their diverse teams are more effective than homogeneous teams or diverse teams that don’t learn from their members’ differences. Additionally, they send a clear message that varied points of view aren’t just encouraged, they’re valued. Employees are empowered to bring their authentic selves to work, collaborate fully with colleagues, and better achieve company goals, innovation and growth. ď»ż

DEI and the Talent Pool Advantage

 

  • Employers that posted about diversity saw 26% more applications from women 
  • Companies with a DEI team were 22% more likely to be seen as industry leaders with high-caliber talent 
  • 76% of employees and job seekers said diversity was important when considering job offers 
  • 60% of employees want business leaders to speak up on diversity issues 
  • 80% of survey respondents want to work for a company that values DEI 


Embracing Diversity for Success 


It's clear that diverse teams are more productive, but only when they receive the support they need to thrive. While navigating the complexities of this process might seem like a challenge, it doesn’t have to be. Global advisory service providers are uniquely positioned to help companies develop impactful DEI programs that leverage the collective intelligence of diverse workforces so businesses can succeed in an equally diverse global market.   

To learn about the intersection of DEI, cultural agility, and best practices regarding your organization’s DEI strategy, read our blog post, DEI and Intercultural Training: Best Practices for Talent Acquisition and Global Mobility or contact us at info@netexpat.com

Contact us

Share this post

A group of people are sitting around a table looking at a laptop computer.
By Patricia Glasel January 6, 2025
NetExpat recently interviewed two key members of the Eramet Group Team about their efforts in providing intercultural training for their international workforce through their partnership with NetExpat. The initiative is designed to enhance cultural understanding and collaboration among expatriates and multicultural teams, leading to better teamwork and productivity. The interview offers insights on the implementation, impact on performance, family integration success, and much more.
By Laurette Bennhold-Samaan December 16, 2024
Employee well-being benefits more than just employees. It also benefits employers and the customers they serve. What many organizations don’t realize is how much intercultural agility impacts employee well-being. Below, we’ll discuss the relationship between the two and why focusing on intercultural agility should always be a part of your global talent mobility strategy. Why Employee Well-being Matters Prioritizing employee well-being makes sense from a duty of care standpoint, but it also benefits businesses. Employees that are happy and well are typically more engaged at work. Employes that are culturally agile enjoy enhanced well-being, as they’re better able to collaborate with their teammates and customers. This results in higher levels of engagement at the individual level – and enhanced collaboration and innovation among teams. Additional outcomes include a stronger company culture, brand reputation, and employee retention rate. Customers also reap the benefits. When well-being is prioritized and employees are given the tools they need to succeed, they’re more likely to provide excellent customer service and care. Businesses benefit from higher customer satisfaction scores and brand loyalty. Conversely, the risks of not investing in employee well-being can be costly:
By Laurette Bennhold-Samaan November 20, 2024
When organizations support mobile employees during an intercultural assignment, they benefit long after those same individuals repatriate. The trouble is, too many businesses don’t see repatriation as a component of the assignment, which can have negative outcomes for both them and the employees they’ve invested in: Without repatriation support, employees face a myriad of challenges, from reverse culture shock and career uncertainty to feeling diminished. Businesses end up paying the price, from employees being disengaged to losing talent altogether. Both have negative impacts on a company’s ROI.
By Laurette Bennhold-Samaan November 8, 2024
There’s a commonly held belief that we should “treat others the way we’d want to be treated ourselves.” But what happens when another person’s idea of outstanding customer service differs from your own? In today’s global marketplace, businesses are staffed with workforces that are just as diverse as the global markets they serve. Each stakeholder’s perception of customer service standards is, therefore, just as varied – because our individual and cultural experience influence our perceptions, preferences and purchasing behaviors. Ignoring this reality can have lasting negative impacts on employees, customers, and businesses themselves. A failure to understand and address cultural differences can lead to customer dissatisfaction, brand trust issues, employee frustration and burnout, and even the loss of business. To truly excel, businesses need to go beyond a one-size-fits-all approach to customer service and become adept at recognizing and adapting to the unique cultural nuances that shape client expectations. Below, we take a look at some of the pitfalls of assuming a universal approach to customer service and demonstrate the importance of cultural awareness in achieving true client satisfaction. The Importance of Cross-Cultural Awareness in Customer Service In any industry, customer service isn’t just a function – it’s a pillar of brand perception and client retention. When organizations haven’t developed intercultural agility, their service professionals might be confident that they’ve delivered top-notch service, while satisfaction scores show their clients and customers feel dissatisfied or disrespected. This common disconnect underscores the vital need for cross-cultural awareness. Recognizing that respect and quality are defined differently across cultures is key to bridging gaps and ensuring every client feels valued and understood, wherever they are in the world.
By Laurette Bennhold-Samaan October 29, 2024
In today’s rapidly evolving market, businesses have to adapt quickly to scale and stay competitive. At the heart of this challenge is a crucial function that supports all of that growth and adaptation: global talent mobility. More than just moving people from one point to another, effective relocation programs increase productivity, bolster talent acquisition and retention, drive business development, and result in market expansion and financial gains for an organization. So why do so many leaders still consider talent mobility to be an expense instead of a strategic investment? Below, we’ll discuss the importance of shifting perceptions, the long-term positive impacts relocations have on a business’ bottom line, and how internal mobility and HR/talent management teams can start building a business case for organizational leadership buy-in to invest in global talent mobility. Why Global Talent Mobility is a Strategic Investment Recent research from Localyze, which includes data from 240 European business leaders and managers across 4 countries, has revealed that global talent mobility benefits an organization’s bottom line in 10 areas: access to global talent, business profits, cultural awareness, knowledge sharing, innovation, employee retention, employee satisfaction, employee morale, faster hiring and DE&I. In addition, the expenses associated with relocations are far outweighed by an ROI gain of up to 270% when it comes to impact on productivity, talent retention, and overall profitability. In short, because of their daily exposure to mobile populations and associated relocation processes, talent mobility professionals play an integral role in achieving mobility objectives — but they’re also uniquely positioned to offer data-driven insights that can support and contribute to a company’s overarching goals and success. Talent Mobility: The gift that keeps on giving When it comes to innovation, competitiveness, and growth, a company’s success is directly tied to the development and engagement of its greatest asset: its employees. Global talent mobility accomplishes immediate goals by getting the right talent where a company needs it to be in the moment – but when used strategically, it also contributes to long-term gains. The following inter-related benefits should always be considered when calculating mobility’s true value to an organization:
By Laurette Bennhold-Samaan October 16, 2024
Recently, we interviewed Dr. Milton J. Bennett for his thoughts on what effective intercultural training should consist of today and how to better facilitate that training to benefit organizations with diverse workforces and target markets. A globally renowned sociologist, Dr. Bennett is the creator of the Developmental Model of Intercultural Sensitivity and co-creator of the Intercultural Viability Indicator, a tool that reveals how organizations can create a climate of respect for diversity and develop strong relationships between colleagues.
October 3, 2024
As the Chief Information Security Officer at NetExpat, I oversee the security of our information systems and data. My role also includes managing IT projects to ensure they align with our strategic goals and technological infrastructure. My key responsibilities encompass risk management, developing and implementing security policies, ensuring compliance with these policies, and staying updated on the latest cyber threats to protect NetExpat.
By Lisa Marie DeSanto and Laurette Bennhold-Samaan September 25, 2024
Over the years, India has transformed from a hub of service centers to a strong competitor in the global market. And with an impressive 45% growth rate since last year, companies from burgeoning industries — from oil and gas to consumer goods, technology and petrochemicals — are thriving. What does this mean for multinational corporations, organizations hoping to secure skilled talent, and companies conducting business with India-based colleagues and partners?
By Lisa Marie DeSanto and Laurette Bennhold-Samaan September 4, 2024
Has the need for intercultural training become obsolete? While many business stakeholders assume that intercultural agility is less important for global teams that interact virtually, the reality is quite the opposite: Intercultural misunderstandings can happen under the best of circumstances, but their likelihood is greatly increased in remote work and virtual settings – and it costs organizations dearly, resulting in team friction and discord, lost time and productivity, missed goals and deadlines, risks to the company’s market reputation, talent disengagement or attrition when employees feel disenfranchised, and negative impacts to their bottom line.
August 16, 2024
Mary Weaver is a global mobility expert with over 20 years of experience. She has a deep understanding of global mobility trends thanks to her unique blend of corporate global mobility roles and consulting experience supporting companies across all sizes and industries. She has been instrumental in designing and implementing innovative strategies to bridge the gap between global relocation and talent management, ensuring a seamless transition for employees moving across borders. Mary lives in Atlanta, Georgia. She enjoys traveling and exploring new cultures with her husband and three children. She is passionate about leveraging her experiences to create a more supportive environment for globally mobile employees.
Show More
Share by: