Does DEI have investment merit?

Diversity, equity, and inclusion (DEI) has become a priority for many companies in recent years. However, there’s still debate about whether or not DEI initiatives are worth the investment. Let’s review data from several recent diversity-related articles, with a focus on investment and return on investment (ROI).

MIT Sloan School of Management

A 2022 panel conducted by MIT's Sloan School of Management found that just over 31% of panelists agree that corporate DEI investments should have a financial ROI. However, the consensus in this same group was that there are many reasons companies should be motivated to invest in DEI — among them, morality and fairness.

Unfortunately, the panel found no clear consensus on how to measure the ROI of DEI initiatives. Some panelists argued that they should be evaluated on their own merits, while others argued that DEI initiatives should be evaluated based solely on financial impact.

Deloitte US CEO survey

A 2023 survey of US CEOs by Deloitte found that DEI remains a top priority for most CEOs, but that the momentum behind DEI efforts has slowed significantly since 2020. The survey also found a number of barriers preventing companies from making real progress, including:

• Lack of senior leadership support
• Lack of resources
• Lack of employee buy-in
• Lack of data and metrics
• Lack of awareness of DEI best practices

McKinsey & Company study

A 2020 study by McKinsey & Company found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.

The study also found that companies in the top quartile for gender diversity are 21% more likely to have financial returns above their respective national industry medians.

Other related data

A 2018 study by Harvard Business Review found that companies with more diverse workforces are more likely to be profitable, innovative, and customer-focused. They’re also more likely to attract and retain top talent.

Finally, the study found that DEI isn’t just about hiring a diverse workforce. It’s also about creating an inclusive culture where everyone feels valued and respected. When employees feel like they belong, they’re more likely to be engaged and productive.

A clear link between DEI and financial ROI

The cited studies are correlational, meaning other factors may have contributed to observed results. Despite the lack of a clear causal link, there’s still a strong business case for investing in DEI. Companies committed to DEI are more likely to attract and retain top talent, create a more inclusive workplace, and build stronger relationships with customers and stakeholders.

Diversity certification through the Institute for Diversity Certification (IDC)®

• Setting clear goals and objectives for DEI.
• Developing a comprehensive DEI strategy.
• Creating a culture of inclusion.
• Providing training and education on DEI.
• Measuring your progress and make adjustments as needed.

Take the next step

DEI is an ongoing journey, but it is one that is well worth taking. By embracing DEI, organizations can create a more inclusive and productive workplace for all.

Ready for the next step in your DEI journey? IDC offers two certification programs for all types of professionals and executives who are committed to creating diverse, equitable, and inclusive workplaces:

Certified Diversity Professional (CDP)® - designed for anyone interested in or responsible for championing diversity in their organization. Topics include:

• Diversity and inclusion fundamentals
• Legal and regulatory requirements
• Diversity and inclusion strategy
• Diversity and inclusion communication
• Diversity and inclusion training and development
• Diversity and inclusion measurement and evaluation

Certified Diversity Executive (CDE)® - designed for executives who are responsible for setting the vision and strategy for their organizations. Topics include:

• The business case for DEI
• Diversity and inclusion leadership
• Diversity and inclusion change management
• Diversity and inclusion talent management
• Diversity and inclusion risk management

Investing in DEI is an investment in your organization's future. By becoming certified, you can show your commitment to DEI and help your organization create a more inclusive and productive workplace for all. Discover IDC's certification programs!