The Why

Small businesses with established cultures of diversity and inclusion outperform businesses without. Research shows that organisations with an inclusive culture are twice as likely to meet or exceed financial targets, and eight times more likely to achieve better business outcomes [5]. 

Diverse organisations are more profitable and creative, and have better governance. Employees from diverse backgrounds bring different lived experiences, ideas, and perspectives to their work, boosting the overall creativity and resilience of the business, and supporting it to outperform businesses that do not invest in diversity. Bringing together employees with diverse backgrounds, experiences, and perspectives also makes businesses more innovative and better at solving complex problems. Companies with gender and cultural diversity are more likely to have financial returns above national industry average — it’s clear that diversity is good for business [6]. 

Having a gender-inclusive and diverse leadership group improves market value and profits. Increasing the number of women in key management positions by 10 per cent or more leads to an average 6.6 per cent increase in market value of Australian ASX listed companies [7], while companies with ethnically and culturally diverse boards are 43 per cent more likely to experience higher profits [8]. 

Having a D&I policy and associated actions might improve your chance of winning work with major clients. Increasingly, clients in Australia want to work with businesses that are aligned to their values. Large private companies, and federal, state, and local governments, can leverage procurement to support social policy and demonstrate their commitment to D&I. This means that some major purchasers will ask their business partners and contractors to provide evidence of a commitment to D&I, and to include actions within their tender responses that provide explicit benefits to these areas.

Employees who feel celebrated at work and who know their employer is committed to diversity, are more innovative, collaborative, and responsive to changing customer needs [9]. Research has found that when just 10 per cent more employees feel valued and have a place within the business, work attendance increases by almost one day per year, for every employee. Promoting diversity, preventing discrimination, and providing a safe and respectful workplace has real and direct benefits to the health and wellbeing of all employees. There is strong evidence that discrimination leads to higher rates of poor health, particularly for mental health and wellbeing, leading to anxiety, depression, and stress [11]. 

By committing to a workplace that is free of discrimination and bias, and by providing equitable access to support, opportunities and resources, SMEs can capture the growth benefits of diversity and create the kind of workplace where employees are motivated to perform their best.

In Australia, all employers have a legal obligation to prevent discrimination in the workplace. State and Commonwealth anti- discrimination laws make it unlawful to discriminate, harass, victimise, or vilify an individual on the basis of specific characteristics [12]. It is also unlawful to bully someone in the workplace [13]. 

There are significant consequences for breaching these laws. The NSW Anti-Discrimination Tribunal estimated the average costs of resolving a serious or complex complaint to be $35,000, including wages and lost productivity [14].

Discrimination complaints can also seriously damage the reputation of a business, which can harm the ability to attract and retain staff, and reduce productivity. An estimated 70 per cent of workers exposed to violence, harassment or discrimination take time off work as a result [15].