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Data shows that investing in diversity is a fundamental driver of business success. Getting diversity, equity and inclusion right in any business has proven to have great returns on investment and according to Gartner it can give a business 30% “better performance.” Unfortunately, diversity is sometimes seen as an optional extra in the workplace instead of an essential component, and the importance of fostering an inclusive environment is often overlooked.
Many leaders have made the mistake of neglecting the importance of individuals in their efforts to successfully and inclusively scale up. This oversight has resulted in significant costs, harmed company culture, and hindered innovation.
Often business leaders use budget constraints as an excuse for not investing in diversity. But, in reality, failing to prioritize diversity and its inclusion, can result in significant financial losses. Making a genuine effort to promote diversity and establish a supportive network for everyone should be an ongoing and daily commitment for a business.
McKinsey & Company reports indicate that companies that invest in authentic Environmental, Social, and Governance commitments tend to attract a higher number of individuals who are eager to join their firm and stay. Here are the big impacts that can be made to ensure sustainable success and growth of a business by putting diversity investment at the forefront.
ESG Gives Back
Many fintech companies spend a lot of money on hiring and training new employees who end up leaving quickly. In addition, they also waste resources trying to attract candidates who ultimately turn down job offers. Potential employees, particularly the newer generations, are increasingly valuing companies that align with their own values and demonstrate a genuine commitment to making a positive impact on society and the environment.
By investing in authentic ESG initiatives, companies not only improve their reputation and brand image but also create a more appealing work environment. This, in turn, increases the likelihood of attracting top talent and reducing the financial losses associated with staff turnover.
Soft Skills Are The Real Hard Skills
Soft skills, often overlooked in the past, are now proving to be crucial for success in businesses. Traits such as agility, curiosity, and emotional intelligence are highly valued by resilient companies. In the fintech industry, these attributes are driving innovation and progress as businesses prioritize ideation and positive challenge.
Effective communication and the ability to bridge the gap between technology and business have become essential. LinkedIn shared these communication skills are the most in-demand skills for 2023 in a recent Data Insights report. This enables diverse voices and opinions to be heard, leading to more robust outcomes. Fintech companies that invest in people teams and foster a positive culture are creating safe environments where employees can thrive.
Agility, curiosity, emotional intelligence, and effective communication drive innovation in the fintech industry. By investing in people and culture, fintech companies are creating safe and inclusive environments that enable these important skills to flourish. This in turn increases profits.
Truly Reflecting The Markets You Serve
The financial industry is actively seeking to reach untapped customer segments, making it crucial to understand these new audiences. Building a culture that embraces diversity of thought, change in process and evolution of methods to reflect this, is essential for achieving greater success rates. When a business aligns itself with a higher purpose and actively involves its employees in that mission, we see lower employee turnover and longer tenures, leading to significant cost savings. Moreover, increased productivity resulting from this approach has a profoundly positive impact on the company's ability to rapidly scale operations.
Valuation And Funding Rounds
As the evidence continues to mount, demonstrating the higher profitability of diverse businesses, there is a growing need for measuring and reporting on the demographics of people in the expanding fintech industry. Venture capitalists and investors are increasingly interested in understanding the data and demographic breakdown around pay, promotions, and leadership roles when making investment decisions.
As Cyrus Taraporevala, former president and CEO of State Street Global Advisors, told the Harvard Business Review: “ESG issues have become much more important for us as long-term investors.”
In any workplace, the emphasis on diversity and inclusion should revolve around the individual and their unique experiences. Every person deserves fair compensation, recognition, and opportunities for growth and advancement. When we genuinely prioritize these aspects for our employees and peers, we also lay the foundation for the long-term success of our businesses. Neglecting the well-being, opinion and needs of each employee can jeopardize the very survival of a company.
