People, Profit, Progress: Why DEI Helps Companies Win

The Value of Diversity, Equity, and Inclusion

Diversity, equity, and inclusion are often framed as moral imperatives. They are also practical levers for better results. Companies that treat DEI like any other core business strategy tend to see gains in financial performance, innovation, and talent outcomes.

Here are six reasons why DEI helps companies win.

1. Better financial performance

Large scale analyses continue to link leadership diversity with outperformance. McKinsey's latest global research finds the business case is the strongest it has tracked, with companies that excel on diversity more likely to outperform financially.¹ The Peterson Institute's study of nearly 22,000 firms across 91 countries likewise reports that having more women in corporate leadership correlates with higher profitability, suggesting either the payoff to nondiscrimination or the value of added skill diversity.⁶

Important caveat: correlation is not causation, and some academics have challenged methods used in popular reports. A 2023 reanalysis questions earlier McKinsey findings, which is a useful reminder to implement DEI for holistic value, not only for a quick profit spike.⁸

Implement DEI in your organization for holistic value, not only for a quick profit spike.

2. More innovation, faster problem solving

Innovation thrives on varied perspectives. BCG found that companies with above average diversity on leadership teams reported materially higher revenue from new products and services, alongside stronger EBIT margins.² Harvard Business Review summarizes complementary research showing that diverse teams process facts more carefully and avoid groupthink, which improves decision quality and speed in complex situations.³

3. Stronger employee performance and retention

Inclusion improves day to day performance.

Gartner reports that in diverse and inclusive environments, performance rises by 12 percent and intent to stay increases by 20 percent, quantifying everyday gains from psychological safety and equitable practices.⁴ These improvements compound, since lower turnover preserves institutional knowledge and reduces replacement costs. The cost side is sizable: Gallup estimates U.S. businesses lose about $1 trillion annually to voluntary turnover and that replacing a single employee typically costs from one half to two times their annual salary.⁹

For conservative planning, Work Institute recommends estimating the direct and indirect cost of each departure at one third of base pay, a rule of thumb that adds up quickly on larger teams.¹⁰

4. A talent magnet in competitive markets

Candidates, especially younger and underrepresented talent, screen employers for DEI credibility. Glassdoor's survey shows that a clear majority of job seekers consider DEI an important factor when evaluating companies.⁵ A credible DEI strategy widens the funnel, shortens time to fill, and improves offer acceptance.

5. Healthier culture and fairer systems

DEI translates values into operations. Clear goals for representation and pay equity, accessible career paths, and unbiased performance management reduce friction and increase trust. Great Place to Work finds that organizations with smaller gaps between the experiences of white employees and employees of color post higher revenue growth than those with larger gaps, linking equitable culture to business momentum.⁷

6. Risk management and stakeholder trust

Regulators, customers, and investors increasingly expect transparency on human capital. A structured DEI program with metrics and governance helps surface workforce risks early, supports compliance across regions, and strengthens brand trust with communities and partners. Even as legal and political contexts shift, companies that focus on equitable opportunity, fair pay, accessibility, and inclusive leadership training can sustain progress while staying within evolving rules.¹

What high impact DEI looks like

• Tie DEI goals to business strategy and role level accountability. Publish a small set of metrics that matter: representation in leadership, promotion rates, pay equity, and inclusion survey scores.¹
• Build capability, not one off events. Equip managers to run inclusive meetings, give equitable feedback, and sponsor talent from all backgrounds.
• Design for innovation. Mix perspectives on product teams, invite dissenting views, and reward evidence based decisions to capture the diversity dividend.^2,3
• Remove friction in people systems. Audit job descriptions, hiring slates, interview rubrics, and performance criteria for unintended bias.
• Measure impact. Track performance, retention, engagement, and innovation outcomes by cohort to see where inclusion is working and where it stalls.⁴

The Bottom Line

DEI is not a side project. It is a disciplined way to improve how people work together, which is the engine of financial results, creativity, and resilience.

Citations

1. McKinsey & Company, "Diversity Matters Even More: The case for holistic impact," 2023. McKinsey & Company

2. Boston Consulting Group, "How Diverse Leadership Teams Boost Innovation," 2018. Boston Consulting Group

3. Harvard Business Review, "Why Diverse Teams Are Smarter," 2016; and "Teams Solve Problems Faster When They're More Cognitively Diverse," 2017. Harvard Business Review

4. Gartner, "Create Competitive Advantage Through DE&I," accessed 2025. Gartner

5. Glassdoor, "Diversity & Inclusion Workplace Survey," 2020. Glassdoor

6. Peterson Institute for International Economics, "Is Gender Diversity Profitable? Evidence from a Global Survey," 2016. PIIE

7. Great Place to Work, "Racially Diverse Workplaces Have Largest Revenue Growth," 2019. Great Place To Work®

8. Econ Journal Watch, Green & Hand, "McKinsey's Diversity Matters/Delivers/Wins Results Revisited," 2024. Econ Journal Watch

9. Gallup, "This Fixable Problem Costs U.S. Businesses $1 Trillion," March 13, 2019. gallup.com

10. Work Institute, "2024 Retention Report," cost of turnover methodology and estimate, pp. 7, 25.