The global market for diversity, equity and inclusion (DEI) is estimated to reach a whopping US$15.4 billion by 2026; up from US$7.5 billion in 2020.
That’s a compound annual growth rate (CAGR) of around 12.6%, according to the report by ResearchAndMarkets.com. Employee Resource Groups (ERGs), one of the segments analysed in the report, is projected to reach US$5 billion; 12.1% CAGR over the same period. ERG are employer-recognised workplace groups voluntarily led by employees – also known as affinity groups, business resource groups or employee/team member networks – are popular in many big companies today.
These groups offer a unique, employee-driven way to achieve a cohesive work environment. Growth in the External Partnerships segment is readjusted to a revised 11.5% CAGR for the next 7-year period. The market in the US was estimated at US$3.8 billion in 2021. The country currently accounts for a 45.5% share in the global market. China, the world’s second largest economy, is forecast to reach an estimated market size of US$1.8 billion in 2026; at a CAGR of 11.4% through the analysis period. Among the other noteworthy geographic markets are Canada and Europe; each forecast to grow at 9.7% and 12.4% respectively over the analysis period.
GLOBAL RUSH FOR DIVERSITY
We live in an increasingly complex and interconnected world where shaped by globalisation and technological advancements diversity has become the fabric of modern society. Companies eager to establish a strong presence in a variety of emerging new markets have initiated the global gold rush for multicultural markets; diverse employees; and untapped consumer bases, highlights the report.
Success in global markets requires multicultural initiatives; and a sustained effort to integrate distinct demographic and cultural diversity into an inclusive environment that fits into the broader vision of the company’s growth and advancement. This is opening up rich opportunities for companies to spearhead growth by leveraging their access to a diverse talent pool.
While global diversity of the labour force is good and beneficial for companies to enhance creativity and drive innovation; the same also challenges long held traditional business ideas and assumptions. Companies are being forced to effect major structural reorganisations spanning all key areas of business operations; including marketing, talent recruitment and retention functions, notes the report.
BUSINESS CASE FOR DIVERSITY
Even from a business standpoint, the case for diversity in workplace is overwhelming given its ability to foster innovation, creativity and empathy in ways that homogeneous environments can never do. As markets evolve to become more competitive than ever before and the business environment gets tougher amid the crisis, companies need to remain alert, aware, agile and responsive to remain afloat, profitable and successful, highlighted the report.
To be successful in a world that is constantly changing, companies need to be leading the change rather than responding to it, highlighted the report. Companies with more diverse teams and inclusive are better able to lead change than those with a more homogeneous workforce. A strong organisational culture and robust structural foundation are critical for achieving agility that comes from internal strength. Diverse companies earn 2.5 times higher cash flow per employee; and inclusive teams are productive by over 35%, notes the report. High-diversity environments and all-inclusive culture has clear benefits and advantages.
Yet, global DE&I initiatives are particularly challenging to successfully implement and measure. Achieving real equality and inclusion is a challenging task; and over 65% of employees are of the opinion that their managers do not foster an inclusive environment. Achieving greater diversity in the workplace is relatively easier as it represents the mix or the make-up of an entity.
CREATING INCLUSIVE CULTURES
However, the inclusion piece of the puzzle is more complex; and ensuring the same is immensely tough as it involves integration of the contributions, presence and perspectives of different groups of people into the environment. Inclusion is all about making the mix work together as a cohesive whole by respecting, welcoming and valuing the diversity of every individual’s unique background, experiences, race, ethnicity, sexual orientation, gender identity, faith, tradition; and most importantly perspectives.
An inclusive culture allows for collaborative daily learnings, full freedom to decide and experiment; and provides excellent mobility across the organisation, and encourages long term thinking. Diversity without inclusion can create a toxic culture; and similarly inclusion without diversity can create an uncreative and infertile environment where a company can stagnant.
In short, a successful company is one which implements DEI not only as a moral obligation, but also as a business imperative, concluded the report. Click here for more information about the report.
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