From personal experience, organizations that are embracing diversity in their management positions stand to gain more in terms of performances. Workforce diversity is an engine of innovation and motivation, as well as, a magnet for talent acquisition and retention (Dubey, & Hirsch, 2018). The growing competition in the economy has seen many firms opt to diversify. Talent acquisition becomes strategic when it comes to improving the general performance of firms. A study done by McKinsey and Company shows that it takes a diverse workforce to grow a firm’s share of the consumer market (Caudilo, Houben, & Noorrancisco, 2015). Diversified organizations are at a higher chance to effectively market or sell to varying consumers. These businesses also benefit from reducing employee turnover cost. Frequently, the call to diversify is supported if it can be leveraged to fulfill some of the company’s objectives. According to Tracey Morley (2018), a qualified plan to diversify needs to define the costs and benefits of the action clearly. Here is a discussion on measuring the economic impact of diversity in organizations by quantifying costs and benefits.
Accuracy is indispensable when quantifying the costs and benefits of diversity. The benefits of diversifying fall into two categories, which are tangible and intangible benefits. The former type of benefits is accounted for in monetary value (Dubey, & Hirsch, 2018). An organization can financially benefit by minimizing costs linked to discrimination in employment. Either way, direct benefits can be gained by increasing the market share through improvement in performance. Another tangible benefit is achievable by improving innovation and productivity, thus providing richer solutions (Morley, 2018). Finally, the cost saved on retention and recruiting of employees is also a tangible benefit.
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On the other hand, benefits categorized as intangible have no fiscal measurement terms. Their different but significant benefits to organizations can help in overcoming challenges facing them. The intangible benefits play significant roles in ensuring effective performance by the workforce creating chances for economic growth (Kopf, 2018). Some of the probable benefits include employees’ satisfaction, health in the work environment, and growth opportunities created for employees.
Apart from benefits, accurately quantifying the cost is an evenly significant activity. The two are computed to forecast the return of investment in a diversity plan (Caudilo, 2015). Firms need to identify the cost of resources associated with implementing the plan. Such costs are incurable when training the workforce, using consultants, hiring contractors, communicating the program and implementing policy changes. Business cases make sense if the return to investment is achievable, and using the above, it is possible to measure the ROI in a diversity plan.
References
Caudilo, F., Houben, S., & Noorrancisco, J. (2015). Mapping the value of diversification . McKinsey & Company. Retrieved on 5 March 2019, from https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/mapping-the-value-of-diversification
Dubey, R., & Hirsch, S. A. (2018). Viewpoint: Building a business case for diversity and inclusion. SHRM. Retrieved on 5 March 2019, from https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/pages/viewpoint-building-a-business-case-for-diversity-and-inclusion.aspx.
Kopf, D. (2018). Fifty years of economic history proves that inclusive workplaces make us all richer. Quartz. Retrieved on 5 March 2019, from https://qz.com/work/1372277/fifty-years-of-economic-history-proves-that-inclusive-workplaces-make-us-all-richer/
Morley, T. (2018). Making the business case for diversity and inclusion: Short case studies and research papers that demonstrate best practice in HR . Emerald Publishing Limited. Retrieved on 5 March 2019, from https://www.emeraldinsight.com/doi/full/10.1108/SHR-10-2017-0068
