Why diversity & inclusion?

Updated: Sep 13, 2018

What is this diversity you speak of, and what's so good about it anyway? In short - diversity & inclusion makes your business better.

Reducing sick leave

New Zealand employees on average take approximately 4.5 sick days per year, which costs organisations on average $837.00 per employee per year. A New Zealand study found that being absent from the workplace was most commonly due to non related work injury or illness, followed by caring for a family member.

In 2012 the overall cost of absenteeism across the New Zealand economy was $1.3 billion*. If employers are able to encourage and support their staff to live a healthy lifestyle, as well as being open to restructuring their workforce to allow for flexibility, they may be able to reduce the amount of time employees are absent from work thus reducing the financial cost associated with absenteeism.

Reducing turnover

The turnover of employees within the workforce has a variety of financial implications for organisations. If employees feel that their employer understands and accepts them, it increases their level of commitment and loyalty to their organisation.

Creating this environment comes down to investing in human capital and developing employee centric business models. When businesses fail to establish such an environment employees can feel misunderstood and become uncommitted. This results in employees looking for work elsewhere.

The process that results from an employee resigning and having to hire a new fully operational employee has large financial costs for business due to the time and labour it requires. Time and labour during this process includes phasing the old employee out of their current position which results in either overloading other staff with work or a reduction in productivity until a new staff member is found. There can be costs associated with celebrating the leaving employee, advertising for positions and the interviewing process. Loss of productivity can occur again due to being unable to fill position, or the new employee taking time to learn the role. On top of this there are the costs of training new employees, providing staff support during the orientation and induction of the new employee.

In the US, employees who earn over $30,000USD can cost their employer 20% of their salary in replacement costs. Those in well educated and higher paying jobs can cost their employer 213% of their salary in replacement costs.

Little research of similar nature has been done here in New Zealand, but the Human Resources Institute of New Zealand estimates the cost of resignation, recruitment and replacement can cost organisations three times the employee's salary*.

In addition to current turnover rates, research shows that workplace turnover is an ever growing trend amongst millennials who report lower rates of loyalty to their employer. In order to retain talented millennials, employers need to be able to invest and adapt their business practises meet the millennials needs of flexibility and professional growth.

If organisations are able to invest in the human capital of their employees through diversity and inclusion practices and policies, employees will have higher rates of job satisfaction which leads to workplace loyalty, decreased turnover rates and the resulting reduction in costs.

Employee engagement

Increasing employee engagement directly correlates to a rise in productivity. Better productivity results in an increase of revenue for organisations which comes as a direct profit from the service provided, as well as financial savings that are associated with disengaged workers. It is estimated that in the US, disengaged workers cost organisations between $270-$343 billion each year*.

Organisations that embrace diversity and inclusion efforts financially outperform their peers in similar industries. Policies that directly relate to increased engagement and productivity include flexibility, allowances for special leave, cultural understanding and holistically supportive workplaces.

The implementation of diversity and inclusion strategies and policies within an organisation send a message to both minority and majority groups that their difference is valued and accepted by the organisation. It is shown that employees have higher levels of engagement and commitment to organisations when their emotional needs are met, compared to when they are solely met financially.

Investing in human capital and creating policies that focus on individuality invites employees to feel more comfortable in their day-to-day work life meaning they are generally less stressed and more productive.

Having specific policies that meet a variety of needs creates employee motivation to contribute more of their time and effort to produce results for their organisation. This increases innovation and productivity which translates into profitability.

Access to talent pool

Businesses who promote that they are able to adapt from traditional work environments to allow for more flexibility, inclusiveness and diversity are placed in a unique position to access a greater pool of talent. It allows them to access individuals with the skills and knowledge that they will require to move their business into the future.

Traditionally, word of mouth has been the way in which prospective employees discover whether an organisation's values and beliefs align with their own, which then determines if they will apply for an advertised position. Technology has now allowed for individuals at a global level to inform each other about an organisations business practice and values. This makes it important now more than ever for organisations to be transparent and open about the way in which they work.

If businesses can prove and promote that they are flexible, accepting and innovative, potential employees all over the world will be able to access this information. This results in an organisation having a wider variety of applicants applying for positions and are more likely to be able to source the appropriate skills and knowledge for the role.

With diversity sits innovation. When employers are able create a more diverse workplace it brings together a group of people who have different ways of thinking and problem solving. This creates better solutions and innovation and sets that organisation apart from others in their field.


Higher numbers of customers or consumers typically relates to increased profitability. If organisations are able to create a brand and a service that authentically connects with a diverse society it is more likely to see client and consumer engagement increase. Promoting the value of diversity and inclusion practices creates an appealing, relevant and relatable brand to both minority and majority populations. A sense of trust and respect is created, encouraging organisation loyalty and increased profits.


Diversity impacts how we see and respond to individuals who are different from ourselves. If employees and employers are able to understand each other's differences, communication will be improved dramatically.

Ineffective communication can result in misunderstanding, frustration, reduction in empathy and lack of cohesive teamwork between employees. This results in lower productivity and increased employee fall out. If diversity and inclusion efforts are well established within a workplace it provides every employee with the opportunity to be heard and understood.

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