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All businesses want to succeed, but many of them may not realize that there is something that can support their growth. They say diversity is our strength as a society and encourages new ideas and perspectives. Well, I’m here to tell you that the same things – diversity, equity and inclusion – can give companies an edge. Some small business owners may think that focusing on making sure their business and culture are impartial, fair, and welcoming to all types of people is simply being politically correct. Let’s see how focusing on these values – what I’ll call DEI for short – can really help startups and smaller companies be stronger and more profitable in the long term.
Related: Prioritize DEI and Achieve ROI Goals: How Inclusive and Authentic Marketing Drives Business Growth
Attracting top talent is becoming increasingly competitive
One of the main reasons DEI is important for small businesses is because attracting top talent is constantly becoming more competitive. Nowadays, when people, especially younger generations, look for jobs, they don’t just look at pay and benefits. They also want to work for companies whose values match theirs. The best candidates may leave a small business or startup to work for organizations that value DEI; therefore, the latter risk losing excellent candidates. As small businesses look to expand, having an inclusive culture and diverse team can help them attract the most incredible talent available.
A better representation of your customer base
Having a more diverse workforce can help you better understand and serve a broad consumer base, which further motivates startups to focus on DEI. It will be more difficult for employees to relate to and satisfy the requests of customers from different backgrounds if everyone has similar experiences. On the other hand, a diverse team of employees with diverse backgrounds can offer insightful advice on how to connect with and delight customers of all backgrounds. This will result in more satisfied customers and growth prospects.
Related article: The weight of breaking barriers is pushing Black leaders to the breaking point. This DEI expert reveals where we’re going wrong.
Greater creativity and innovation
Research repeatedly shows that having a diverse group of people with different viewpoints, experiences, and backgrounds fosters greater creativity and more creative problem solving. A work environment where all points of view are heard can help spark innovative solutions that may not come from a homogeneous group. This is beneficial for smaller companies and startups that are trying to stay dynamic and come up with new ideas. Different perspectives produce more creative products, services and methods, which are essential for any growing business.
Set the right example for others
Even if your small business is just starting out, you can set the right example from the start when it comes to DEI. While some established companies may struggle to change their culture, new startups can build inclusion into their foundation. Leading with strong DEI practices from day one allows you to attract like-minded customers, partners and investors who want to support companies that demonstrate fairness and equality. It also prepares you to be a responsible member of the community and a role model for positive change as your business succeeds.
Related: 4 Ways Inclusive Leaders Can Respond to Boosting DEI
Legal and regulatory compliance
Focusing on DEI for small businesses is also essential simply for legal and regulatory compliance reasons. As anti-discrimination laws and regulations continue to strengthen over time, companies of all sizes must ensure fair policies and an inclusive culture. This reduces the risks of unfair treatment claims that can damage brands or result in lawsuits. Establishing DEI best practices and annual training demonstrate that even a young company operates in an ethical and law-abiding manner from the start.
Some practical ways small businesses can improve DEI:
- Commit from the top. The CEO and other top leaders must fully support and support DEI from day one. They will need to communicate to all employees that promoting diversity and inclusiveness is a core value of the company. Leaders must provide the motivation and resources so that DEI efforts can truly take root within the organization. When managers demonstrate their investment in these issues through their words and actions, they will encourage everyone else to get on board.
- Support employee resource groups. Employee Resource Groups (ERGs) allow workers with shared backgrounds or life experiences to connect, raise awareness about issues impacting their communities, and provide advice to business leaders. Small teams can sponsor one or two ERGs made up of volunteers. This allows employees to lead the promotion of peer inclusion, while getting the necessary support and visibility from higher levels.
- Monitor hiring and promotion practices. To address potential bias or inequities, small businesses need to examine how they hire, develop and promote workers. Companies can look at leadership candidates and demographics over the past few years. Do these numbers adequately represent the diverse pools of talented individuals in their industry and community? Are there patterns that indicate unfair barriers that have prevented some groups from achieving equal opportunities? By reflecting on hiring metrics, companies understand whether implicit biases need to be addressed to establish a system that is fairer and more open to all.
My advice would be to analyze how balanced and welcoming your business is, look for low-cost ways to improve equity, and continue working on DEI as your business expands. If you prioritize DEI and focus even just a little bit each month on improvements, your company will be on the right path to attracting and retaining talent and customers for the long term.