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  • Writer's pictureAlfio Bonanno

Unlocking the Power of Diversity: Building an Inclusive Future for Organisations

Updated: Jun 28, 2023

In an era where Equality, Diversity, and Inclusion (EDI) take center stage, the significance of fostering EDI cannot be overstated for small businesses. A study conducted by McKinsey & Company in 2020 revealed a compelling insight: companies with diverse workforces are 33% more likely to outperform their competitors in terms of financial returns. In fact, broader HR research has established that organisations with a diverse workforce are more innovative, are better equipped to serve a diverse customer audience and are better perceived from the communities they serve. These findings highlight the undeniable value that EDI brings to organisations, elevating it from a mere checkbox exercise to a strategic imperative. By embracing EDI, small businesses can tap into the wealth of benefits that come with a diverse workforce, fueling innovation, attracting top talent, and driving sustainable growth.

The Challenge of Implementation

While the intention to promote D&I is commendable,organisations may encounter challenges during implementation that hinder their progress. And it is not uncommon, especially in recent times, to see instances of Diversity and Inclusion gone wrong (see the recent cases of BudLight and Pfizer, both suffering a backlash from public opinion due to 'pinkwashing') . Here are some negative examples of how D&I initiatives can go awry:

  • Tokenism: Superficial attempts to showcase diversity without genuine inclusion can lead to tokenism and a perception, among the general public, that an organisation instrumentalises EDI in order to boost its revenues without authentic interest in EDI. Simply filling quotas without fostering an inclusive culture undermines the essence of EDI, causing skepticism and disengagement among employees.

  • Lack of Leadership Buy-in: Without visible and committed leadership support, EDI initiatives may lose momentum and fail to gain traction throughout the organization. The absence of strong leadership can perpetuate biases and prevent meaningful change.

  • Limited Employee Involvement: Engaging employees throughout the EDI journey is vital. Failing to actively involve employees in decision-making, feedback, and resource allocation can create a top-down approach that lacks authenticity and buy-in.

  • Unconscious Bias: Unconscious biases can hinder fair decision-making processes, such as recruitment, promotions, and performance evaluations. Ignoring or neglecting to address biases can perpetuate inequality and hinder the full potential of a diverse workforce.

Understanding the Risks

Implementing EDI initiatives without careful consideration can lead to unintended consequences and risks:

  • Damaged Reputation: Poorly executed EDI initiatives can lead to reputational damage, with stakeholders perceiving insincerity, lack of commitment and instrumentalisation. This can result in a loss of trust from customers, employees, and the wider community.

  • Low Employee Morale: Inauthentic or tokenistic EDI efforts can cause frustration and disillusionment among employees, leading to decreased morale, disengagement and turnover. This is particularly true in the areas of recruitment, promotion and reward and can negatively affect productivity, employee turnover and retention rates .

  • Missed Opportunities: Failing to harness the benefits of diversity and inclusion can lead to missed opportunities for innovation, creativity, and varied perspectives. Homogeneous workforces limit the ability to adapt to a diverse customer base and evolving market demands.

  • Legal and Compliance Risks: Neglecting legal obligations and compliance requirements related to EDI in the Equality Act 2010 can expose businesses to potential lawsuits, financial penalties, and damage to their reputation.

Strategic Implementation for Lasting Impact

To mitigate risks and maximize the impact of D&I initiatives, small businesses can adopt a strategic approach:

  1. Cultivate an Inclusive Culture: Build an environment where all employees feel valued, respected, and empowered to contribute their unique perspectives. Foster an inclusive culture through leadership support, awareness training, and open communication channels.

  2. Embed EDI into Policies and Practices: Incorporate EDI principles into HR policies, recruitment practices, performance evaluations, and career development programs. Ensure fair and unbiased processes are in place to support equal opportunities for all employees.

  3. Empower Employee Resource Groups: Establish Employee Resource Groups (ERGs) that provide a platform for employees to connect, share experiences, and drive EDI initiatives. Encourage ERGs to collaborate with leadership and HR to influence positive change.

  4. Ongoing Education and Training: Offer regular EDI training to increase awareness, challenge biases, and foster inclusive behaviors. Provide resources and tools to enable employees to embrace diversity and understand its benefits.


Promoting diversity and inclusion in an authentic and holistic is not only a moral imperative but also a strategic advantage in today's business landscape. Most importantly, EDI is not a list of actions on a checklist but a journey and a complex process that involves engagement with all stakeholders across the business. Businesses that prioritize EDI reap the benefits of increased innovation, improved decision-making, and enhanced employee engagement, however, the task of achieving inclusion in the workplace is a daunting one, that spans well beyond the use of buzzwords or imagery aimed at targeting specific groups when marketing a product. Those practices, without a holistic organisational commitment to EDI are doomed to fail and the backlash that comes from the wider public, can truly damage the image and social standing of an organisation.

At Ethos HR Consulting, we understand the challenges small businesses face and are here to support you in creating an inclusive culture that drives success. By embracing diversity, mitigating risks, and strategically implementing EDI initiatives, small businesses can unlock the full potential of their workforce and create a workplace where everyone thrives. Get in touch today to find out how we can support you and your business in achieving Equality, Diversity and Inclusion in your organisation.

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