Focusing on diversity and inclusion in the automotive industry has shifted from being a “nice-to-do” to an essential business initiative. Many automakers have started to prioritize these efforts, while some dealers are also following suit. How are diversity and inclusion shaping the automotive retail experience and impacting how dealers do business and interact with their customer bases?
In this two-part series, we’ll take a look at the business case for diversity and inclusion and how auto retailers can enhance their plans in this area.
The Power of Diversity and Inclusion in Automotive Retail
Investing in diversity and inclusion and connecting those strategies to automotive retail isn’t just the “right thing to do.” It has the option to have far-reaching positive effects on diverse groups and the auto retailers who serve them as merchants and employers.
The Business Case for Inclusion
Diversity and inclusion go beyond “morality” to also primarily impact the company as a whole. It can have a massive impact on business outcomes, particularly attrition. According to Deloitte’s Global 2022 Millennial and Gen Z survey, millennial and Generation Z workers are more likely to stay with employers over five years if they are satisfied with their company’s diversity efforts and societal programs.
The benefits also extend to profitability. Between 2014 and 2019, McKinsey tracked diversity and profitability outcomes. Companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability in 2019. This was a 10% increase compared to 2014. Gender diversity wasn’t the only indicator of higher profitability; teams who had higher numbers of ethnic diversity performed even higher, with profitability up 36% compared to other comparable companies.
With newer generations, particularly Generation Z being more diverse than previous generations, companies with teams that mirror this demographic shift are in a better position to thrive.
Beyond Traditional Barriers
Barriers when it comes to diversity can impact a variety of individuals, whether it be those from underrepresented gender, race, age, or disability groups.
It will always be crucial to address initiatives for these groups. However, it’s also essential to develop an inclusive environment for another growing minority group: those within the LGBTQ+ community.
LGBTQ+ Inclusion in Automotive Retail
Currently, LGBTQ+ employees only make up 5.9% of the U.S. workforce. It’s safe to assume that those numbers drop within the automotive retail industry. This presents a unique problem for dealers who want to hire individuals from this group or invite them to become part of your customer base.
LGBTQ+ Market and Consumer Power
According to SCORE, LGBTQ+ purchasing power is just short of one trillion dollars. As with anyone, the key to encouraging this group to spend their resources with you is to appeal to them authentically. This step is where including LGBTQ+ representation (and causes that are important to them) in your marketing and sales strategies becomes crucial.
Any marketing strategy needs ambassadors, and the best representatives to add perspective to LGBTQ+ marketing campaigns and make connections with this audience are your employees. Building an employee base with the group that mirrors who you want to reach out to is an essential strategy.
Creating an Inclusive Workplace
Again, when people step into any store, whether buying a car or a frozen pizza, seeing people who look like them (or any indication that you support their group) can strengthen brand loyalty and trust. For that reason, it’s essential to invest in creating an inclusive workplace.
Here are some helpful strategies that support LGBTQ+ employees and customers:
- Promote diversity training – Offer situational and hands-on diversity training. Ensure senior leadership is engaged, as it will inspire all employees to follow suit.
- Invest in employee resource groups – ERGs are an excellent way to allow individuals from underrepresented minority groups to meet one another, advocate senior leadership on issues vital to them, and collaborate to build their careers.
- Develop LGBTQ+ allyship initiatives – Solid diversity training can help individuals understand how to be allies. Use this information to build initiatives addressing issues important to this community.
It’s Important to Start Somewhere
Prioritizing diversity and inclusion has to involve intentional steps and strategies. By starting with understanding where you are, creating goals, and then establishing steps to get there, you can set in motion the plans to increase diversity in your customer and employee base.
In the next section, we’ll cover strategies for retaining top talent and some success stories of auto retailers who succeeded with their diversity and inclusion initiatives.
