Companies Reap What They Sow: Exclusion Costs Far Outweigh Inclusion Risks

The Cost of Exclusion Is Far Greater Than the Risks of Inclusion Work In a significant shift in corporate culture, companies are realizing that the cost of exclusion is far greater than the risks of inclusion work. According to Julie Kratz, an allyship and inclusion keynote speaker and college professor, "While there are legitimate challenges to doing inclusion work, the risks of not doing the work are far greater." In 2018, Starbucks closed over 8,000 U.S. stores for a single day of racial bias training, a decision that cost them over $16 million in lost revenue. In 2023, Goldman Sachs paid a staggering $215 million to settle a gender bias lawsuit. These financial penalties and long-term reputational stains are far greater than the cost to administer and maintain a strong inclusion program. Kratz emphasizes that "inclusion is already the expectation for the next generation of employees." She notes that her undergraduate business students, who are predominantly women, expect their employers to prioritize diversity, equity, and inclusion. "They're not just looking for a job; they're looking for a company that shares their values," Kratz says. The cost of exclusion is not limited to financial penalties. Companies that fail to prioritize inclusion risk losing top talent, damaging their reputation, and ultimately, their bottom line. As Kratz points out, "the benefits of inclusion far outweigh the costs." In recent years, companies have begun to recognize the importance of inclusion work. In 2020, Microsoft launched a comprehensive diversity and inclusion initiative, which included training programs for employees and a commitment to increasing diversity in hiring practices. While there are still challenges to implementing effective inclusion programs, experts agree that the benefits far outweigh the costs. As Kratz concludes, "the cost of exclusion is far greater than the risks of inclusion work. Companies must prioritize inclusion to remain competitive and relevant in today's business landscape." Background: The concept of inclusion emerged as a response to growing concerns about diversity and equity in the workplace. In 2015, the U.S. Equal Employment Opportunity Commission (EEOC) reported that employers who failed to address bias and discrimination faced significant financial penalties. Additional Perspectives: Dr. Laura Morgan Roberts, a professor at Georgetown University's McDonough School of Business, notes that "inclusion is not just about diversity; it's about creating an environment where everyone feels valued and respected." She emphasizes the importance of leadership buy-in and commitment to inclusion initiatives. Current Status and Next Developments: As companies continue to prioritize inclusion work, experts predict a significant shift in corporate culture. With the next generation of employees expecting inclusive workplaces, companies that fail to adapt risk losing top talent and damaging their reputation. In conclusion, the cost of exclusion is far greater than the risks of inclusion work. Companies must prioritize inclusion to remain competitive and relevant in today's business landscape. As Kratz emphasizes, "inclusion is not just a moral imperative; it's a business necessity." *Reporting by Forbes.*