It has to be said some companies demonstrate a poor record when it comes to practising what they preach on diversity. From a gender diversity point of view, there are famously more men called Dave heading up FTSE 100 firms than there are women CEOs there, while according to research by Deloitte, UK boards are still just 22.7% female (barely changing at all from the 20.3% that existed in 2017). In the UK the FTSE 100 has just six female CEOs.
Combine female diversity with that of women of colour, and progress is even more alarming – all 25 female executive directors working for FTSE 100 are white, while just a single non-white woman heads a Fortune 500 business. Meanwhile, there are whole other areas of diversity where discrimination, or at least subconscious bias, is still rife. For instance, many firms are still privately ageist (despite the fact half of all UK employment growth is expected to come those over the age of 65 in the next ten years1); employers still have fears about accommodating those with a disability (just 16% of autistic adults are in full-time work2), while other types of discrimination are also not improving.
These statistics make for shocking reading in their own right, but they are doubly so because if organisations aren’t mirroring the composition of the workforce in general, then they are not representative of their customer base; are not taking on board different ideas and perspectives, and are continuing to carry on the narrow ‘group think’ that those from predominantly the same backgrounds and experiences will all come to the boardroom with.
The Link Between Innovation, Profitability and Workplace Diversity
In short, when diversity is lacking, so is innovation, so is being able to look at things from different vantage points, and so is the ability for organisations to be met with widespread public connection.
Fundamentally though, all this inability for companies to ‘represent’ at the fullest level lays businesses open to missed opportunities. On its own, gender diversity makes organisations more profitable, with a 10% diversity index ranking increase correlating to a 7% increase in market value3. Altogether, analysis by Boston Consulting Group finds companies that have more overall diverse management teams have 19% higher revenue due to innovation4.
Can Workplace Diversity Lead to Attracting Better Talent?
Interestingly, this business linkage is much more than being about having people with different backgrounds and experiences solving problems differently. Diverse organisations also attract better, more diverse talent to begin with - talent that stays, because they feel the organisation fulfils their need for psychological safety. And with retention comes commitment. As a Glassdoor survey of 1,000 jobseekers recently found5, 67% will consider workforce diversity when evaluating a job offer. According to PWC – in its ‘Winning the Fight for Female Talent’ report (2017), 61% of women look at the gender diversity of the employer’s leadership team when deciding where to work.
Because diverse employees have a better understanding of different cultures, and are able to bring different perspectives and ideas to decisions being made across the company, it ultimately means customers benefit too, with new markets potentially being offered up. There really is little to argue against it.
How can your firm become more diverse?
Just how firms become more diverse is – of course – a decision they have to take for themselves. Some decide to set targets; others will want more direct ‘diversity engineering’ – by having BAME or gender quotas that mean there is positive discrimination. Each have their own merits, and their own supporters and detractors. But one thing that isn’t up for debate is that firms can’t do anything to improve diversity reporting if they don’t know their numbers – ie for instance not having data on diversity ratios at entry-level, and how they change as people progress through the organisation. Nudges can’t be made without the intelligence reporting that tells CEOs that diversity starts to become a problem at management levels, or among certain populations of people (such as amongst women who have children, and who don’t then return to work).
Know your people, and you can start to make a difference – by reporting on diversity and salary data from your current employee base you can begin to see where improvements need to be made. Do it accurately and efficiently, and you won’t just start overturning deep-rooted social and cultural wrongs, but you’ll be able to capitalise on the huge neurodiversity that employing people across all backgrounds brings. Now that’s what you call win-win.
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