Research by employee engagement data platform WorkBuzz found that half (50%) of companies with no investment in EDI saw a drop in engagement over the past 12 months.
Diversity and inclusion:
Similarly, the study found that as businesses progress further along the development path for an EDI strategy, it consistently sees better employee engagement.
Nearly half (45%) of businesses in the primary learning stage around EDI see declining engagement.
This proportion, however, decreases to 31% in the ‘planning’ stage, then 27% in the ‘action’ stage.
By comparison, just 19% of businesses that had an EDI strategy in place had seen a drop in employee engagement.
Toby Mildon, founder of consultancy Mildon, told HR Magazine: “These findings from WorkBuzz's research don't surprise me in the slightest. It is now well evidenced that more diverse and inclusive organisations outperform homogenous organisations.
“When a business invests in its people – and its culture – so that everybody feels that they belong, they can perform at their best and thrive.”
Steven Frost, founder and CEO of WorkBuzz, said that companies are being spurred on by employees who are increasingly finding a voice.
Speaking to HR Magazine, he said: “We’re witnessing a huge cultural shift – pushed by more connected younger generations who are open and more accepting of people’s rights to define themselves.
“With this brings opportunity and challenges – the future workforce will expect equality, diversity, inclusion, and belonging as an essential from their employers, not the ‘nice to have’ approach that currently exists.”
Rather than companies being reluctant to spend on EDI in order to save, Frost said failing to invest in it are doing so out of a lack of awareness.
He said: “I think it’s more about education – if it isn’t broken, why would I fix it? Plus it's taking time to get the right talent pipeline in place to succeed the white males at the top of most organisations.
“For example, just 38 leaders of Fortune 500 companies are female; eight of the FTSE 100 are female; and 11 out of 100 are ethnic minority."
The WorkBuzz report surveyed over 300 HR professionals, organisational leaders, and experts from a mix of small, medium-sized and large companies.