RETURN ON INVESTMENT

ON DIVERSITY AND
INCLUSION

GROUP MEMBERS:
Girish Kumar Bhati (20709010)
Ritvik Chandwani (20709014)
Riyan Arshad (20709021)
Amir Hamza (20709039)
Anmol Jaggi (20709050)
 INTRODUCTION
Many organizations today understand the business case for Diversity & Inclusion. Our
workforces, customers, and the public are all becoming increasingly more diverse.
Organizations that aren’t addressing these changing demographics stand to experience negative
impacts: loss of market share amongst different communities; decreased ability to serve the
diverse population; loss of access to talent; lower employee engagement and higher turnover
rates among underrepresented groups of employees; as well as many other potential impacts.
Return on investment (ROI) is a performance measure used to evaluate the efficiency or
profitability of an investment or compare the efficiency of a number of different investments.
ROI tries to directly measure the amount of return on a particular investment, relative to the
investment’s cost.
Inclusion refers to the efforts that help an employee feel like an important part of the diverse
teams, irrespective of the differences. It focuses on creating an environment where diverse
employees are accepted and appreciated. Without inclusion activities, diversity is meaningless.
IMPORTANCE OF DIVERSITY AND INCLUSION
A diverse and inclusive environment establishes a sense of belonging among employees.
When employees feel more connected at work, they tend to work harder and smarter,
producing higher quality work. As a result, organizations that adopt D&I practices see
huge gains in the form of business results, innovation, and decision-making.
Bigger talent pool :
If you aren’t changing the way your recruiting process is structured, you’ll always get the
same type of people.  Expanding your recruitment searches to more diverse candidates—
including background, ethnicity, age, etc.—widens your talent pool and increases your
chances of finding the best hire.
Increased employee engagement and trust:
When employees feel included, they’re more engaged. Highly engaged employees go the extra
mile for the organization. This higher engagement has a ripple effect on profitability, team
morale, and retention.

Fosters Creativity and Innovation:

Your company has a much higher chance of coming up with fresh ideas with a more diverse
group.
The most diverse enterprises—in terms of migration, industry, career path, gender, education,
age—were also the most innovative, as measured by their revenue mix.
Each of the six dimensions of diversity were correlated with innovation, but industry, nation of
origin, and gender had even larger effects on companies’ revenue.

Boosts Company Reputation:

The importance of having a culture that embraces diversity and inclusion plays a huge role in
the overarching confidence of the company and boosting the company reputation. This allows for
a larger platform for innovation, creativity and a variety of perspectives that will leave your
employees feeling l like they are in a safe place to be themselves and produce their best work.
WHY DO COMPANIES INVEST IN
DIVERSITY AND INCLUSION?
Diversity and inclusion are essential in business today as a healthy variety of
people from different backgrounds and cultures provides us with the balance of
voices and diversity of thought that we need.

However, it seems as though many businesses still do not have a healthy balance
of different people from different backgrounds working for them.

This is something that needs to be changed and this article reflects on the reasons
why diversity and inclusion are essential in business and how it can have a huge
impact on businesses in the short and long term.
1.   Greater innovation and creativity:
Having a working environment filled with employees of different backgrounds,
skills, experiences and knowledge means that there will be an increase in
innovative and creative ideas. This can have a huge impact on the business as this
will help the business expand in the long run. Employees will feel more
comfortable to share their ideas with others with unique ideas being shared
amongst a diverse environment.

2.   Diversity provides a range of skills:

It is important to hire people from all backgrounds as everyone has different skills
that they can provide and help to enhance a business. By having an inclusive and
diverse environment, this allows more wider perspectives to be integrated when
brainstorming, problem solving and developing new ideas in business.
3. Increased productivity:
Teamwork and co-operative work can increase productivity in
business. Increased productivity means that ideas can be exchanged,
and the business can thrive in a shorter period of time amongst
competitors that do not have a diverse and inclusive workforce

4. The business will be boosted:

Diversity and inclusion are important factors that many people look for
when accepting a job offer. Those that see that your business has people
from all backgrounds will more likely accept the job offer and feel more
welcomed. This will allow businesses to hire the best talent too,
ensuring that the best skills are hired and not based solely on the
person’s appearance.
5. Happier employees:
Employees will be happier! Working in an environment that
promotes diversity and inclusivity will make employees feel happier
to be at work which will reflect on the work produced. Employees
will thrive in their job roles and opportunities will arise, allowing
the business to also thrive overall which equals success.

6. Higher revenues:
By having a diverse and inclusive workforce and managing it successfully,
this ultimately will lead to higher revenues. Employees will be happier in
their job roles; new ideas will arise, and productivity will increase. This
will lead to greater successes within the business and allow the business to
flourish and stand out amongst competitors.
 MEASURING ROI ON DIVERSITY AND
INCLUSION
BCR= diversity and inclusion initiative benefits ÷
diversity and inclusion initiative costs.
This ratio is also referred to as a cost-to-benefit ratio.

Specifically, the DIROI calculation is the net benefit of the

initiative divided by its costs.

DIROI% = (net initiative benefits ÷ initiative costs) x

100.
FOR EXAMPLE: THE INITIAL COST OF A DIVERSITY AND
INCLUSION AWARENESS PROGRAM MAY BE $50,000. THE
MEASURABLE VALUE OF THE PROGRAM IS DETERMINED
TO BE THREE YEARS. DURING A THREE-YEAR PERIOD,
THE PROGRAM WILL HAVE A NET SAVINGS OF $30,000
($10,000 PER YEAR). SINCE THE AVERAGE BOOK VALUE IS
APPROXIMATELY HALF THE COST, THE AVERAGE
INVESTMENT IN THIS CASE IS $25,000 ($50,000 ÷ 2).
THE AVERAGE ROI = ANNUAL SAVINGS/AVERAGE
INVESTMENT ($10,000/$25,000) = 40%
DIVERSITY AND INCLUSION COST
It depends on lot of factors, but when done correctly it will produce a good
ROI for the organisation.
When we think about the cost of D&I, it’s not just budget allocation. It’s the
entire cost of an authentic strategic approach to D&I. This includes hiring or
allocating staff, the cost of revising processes, the cost of collaborating across
stakeholders and most importantly the cost of prioritizing D&I alongside
other strategic initiatives.
Here are some of the factors for cost determination, required for the success of
D&I:

 Leadership
 Hiring or Allocating Staff Resources for a D&I Team
 Budget of organizations
INCREASE ROI ON DIVERSITY AND INCLUSION

One way to increase your return on investments is to generate

more sales and revenues or raise your prices. If you can
increase sales and revenues without increasing your costs, or
only increase your costs enough to still provide a net gain in
profits, you’ve improved your return. If you can raise your prices
without decreasing your sales enough to erode profits, you’ve
improved your return.
Using your calculation of your current return, look at ways to
improve your sales and revenues in ways that provide you with
a greater profit than your current business practices.
PROBLEMS FACED BY
COMPANY

1.The Risk of Homogeneity

2.The Risk of overconfidence
3.Reputational risk and image management
DIVERSITY = PROFITABILITY?
BY EMBEDDING INCLUSIVE VALUES INTO
CORPORATE CULTURE AND PRIORITIZING
CLOSING SKILLS GAPS STEMMING FROM
MARGINALIZATION, A POSITIVE TOP-DOWN
CHANGE RESULTS THAT CAN RIPPLE
ACROSS AN INDUSTRY AND BUSINESS
WORLD IN GENERAL. MOREOVER, DIVERSE
COMPANIES ARE MORE PROFITABLE AND
MORE LIKELY TO ACHIEVE LONG-TERM
GROWTH AS AN ENTITY AND IN THEIR
INDUSTRY. 
 CONCLUSION

What gets measured can help organizations understand how effective their
programs and policies are; where they have issues; and what relevant and
reasonable goals they can establish to improve performance. Almost every
organization that participated in this research said there was nothing they
were measuring that was not useful in some way. Furthermore, conducting
year over-year analysis on a wide range of data points is instrumental to
understanding all of the nuances of how people experience inclusion in
complex organizations.