Is Diversity Equity and Inclusion as Important to the Bottom Line as Traditional Profit Centers?

by | Mar 22, 2023 | Diversity Equity and Inclusion | 0 comments

Is Diversity, Equity, and Inclusion as Important to the Bottom Line as Traditional Profit Centers?


In short, the answer is yes.

In the past, Diversity, Equity, and Inclusion initiatives were perceived as a function of HR and were not seen as profit-generating activities. While many companies still consider them as social responsibility programs, research has demonstrated that prioritizing DEI can lead to financial benefits on par with traditional revenue streams. Organizations that make diversity, equity, and inclusion a priority are discovering a competitive advantage that positively impacts their bottom line.

So, why is Diversity Equity and Inclusion as important to the bottom line as traditional profit centers?



Diverse teams lead to increased innovation and creativity

When people with different perspectives and life experiences come together to collaborate on a project, it leads to more innovative ideas and solutions. A study by McKinsey & Company found that companies in the top quartile for racial and ethnic diversity had a 35% greater likelihood of above-average financial returns than companies in the bottom quartile.



A diverse and inclusive workplace leads to increased employee satisfaction and retention

Employees who feel valued and seen at work are more engaged and productive. A diverse and inclusive workplace where all employees feel welcomed, valued and respected creates a sense of belonging and improves employee morale, leading to higher retention rates. Companies with higher levels of gender and ethnic diversity tend to have lower employee turnover rates.



Increased company reputation and brand loyalty

Companies that prioritize diversity, equity and inclusion are viewed more positively by their customers and the public. Research has shown that consumers are more likely to support businesses that align with their principles and values, including diversity and inclusion. Building a reputation as a socially responsible organization can go a long way in driving customer loyalty and retention. For example, a study by the National Gay and Lesbian Chamber of Commerce found that LGBT-owned businesses had a loyal customer base, which generates $1.7 trillion in spending in the US.



Mitigation of Risk

Diversity, Equity and Inclusion initiatives can help reduce the legal and financial risks to a company. Inclusive and diverse teams are more attuned, informed and sensitive to the ethical and cultural sensitivities of operating in different markets. This can help companies avoid costly mistakes and minimize risks related to legal implications and reputational damage in different parts of the world.


In conclusion, companies that prioritize diversity, equity, and inclusion have a competitive advantage when it comes to innovation, employee satisfaction, brand loyalty, and risk management. Customers and employees alike are prioritizing social responsibility and companies that align with these values are likely to enjoy greater success in the long run. Through a focus on Diversity Equity and Inclusion, companies can harness the benefits to their bottom line, while simultaneously positively impacting society as a whole.


  1. McKinsey & Company (2018). Delivering through Diversity. Retrieved from
  2. HBR (2020). Why Inclusive Leaders Are Good for Organizations, and How to Become One. Retrieved from
  3. NGLCC (2021). Lesbian, Gay, Bisexual, Transgender, & Queer (LGBTQ) Owned Business Enterprise Report. Retrieved from
  4. Forbes (2019). The Financial Benefits of Diversity and Inclusion. Retrieved from