The globalisation of postmodern society over the past 20 years has created a culture of openness and accessibility.
As a result, it’s become critical for organisations to embrace diversity when recruiting, onboarding and supporting new candidates.
A series of studies undertaken by McKinsey & Co over the past six years analysing the link between diversity and profitability have all provided one inescapable truth: and that’s that diversity wins!
The Irrefutable Case For Gender Equality
In a first analysis back in 2015, companies in the top 25th percentile for gender diversity on their executive teams were 15% more likely to have above-average profitability than companies in the fourth quartile. Four years later, that number grew to 25%.
Companies with more than 30% female executives were also more likely to outperform companies where this ranged from 10-30%, with those in turn bettering those with even less.
In addition, the gap between the most and least gender-diverse companies in terms of likelihood of outperformance stands at 48% – a substantial gap that is perhaps amplified by the current pandemic context.
Fewer White Men In Grey Suits At The Top
The case is equally captivating when switching attention to the recruitment and championing of candidates or employees from ethnically and culturally diverse backgrounds.
In 2019, top quartile companies outperformed those in the fourth one by 36% in profitability, up from 33% in 2017.
The numbers don’t lie!
A report by MarketWatch suggests that companies with a more diverse workforce are not only better-positioned to meet the needs of varied customer bases but the cash flows of diverse companies are also 2.3 times higher than those companies with more monolithic staff bases.
Put simply, companies that are more diverse are much better-placed to capture new markets than organisations that do not actively recruit and support talent from under-represented groups.
How Do I Go About Creating A More Diverse Workplace?
No doubt you’re sitting there thinking: “It’s all well and good giving me the statistics, but how do I promote diversity within my own company?”.
Of the 1,007 companies analysed by McKinsey & Co, the common thread of market leaders in diversity was a systematic approach to strengthening inclusion with five key methods:
1. Representation Of Diverse Talent
An obvious point but an essential driver for inclusion nonetheless. Representation should be considered at all levels within the company, be it into executive, management, technical, administrative, logistical, customer service, creative or board roles.
Attracting and recruiting diverse talent is not enough, however. Diverse employees may feel underappreciated and disengaged if they feel tokenised or isolated in the workplace.
Executing actual inclusion strategies requires innovation; and the companies which recognise that often outperform those who view it on an opta or statistical level.
2. Leadership and Accountability
Company leaders should be at the forefront of this effort. Beyond HR function, leaders should not only promote the notion of inclusion, but be held accountable for progressing diversity.
Lacking role models is a common roadblock, particularly for women and ethnic minority employees. Providing education tailored to certain groups can alleviate the disparity between leaders and employees.
3. Equality Of Opportunity
To advance towards a true meritocracy, it is critical that there is equality of opportunity. Promoting a level playing field through openness and transparency is extremely important when seeking to advance diversity.
4. Tackle Discrimination
Like every other aspect of life, companies should uphold a zero-tolerance policy for discriminatory behaviour, such as bullying or harassment.
Beyond that, companies should actively help managers and staff identify and address microaggressions.
5. Foster Morale
Togetherness and belonging are critical to work culture. Having an environment where each and every employee feels like they can bring their full potential to the table only advances the company further.
Communicating and embracing a commitment to multivariate forms of diversity within the workplace could be the key difference between profit and loss.
Don’t Be A Laggard!
Although diversity has been proven time and time again to promote higher levels of productivity and profitability, progress surrounding the diversification of the working environments remains slow.
McKinsey reports that Black Americans only hold 4% of senior executive positions at US- based firms, despite making up 10% of all university graduates in the country.
It’s a similar story in the UK, where – despite making up 22% of university graduates – Black and Ethnic minorities only hold 8% of all executive roles up and down the country.
Women in the UK only hold 15% of all executive jobs, and 22% of other board seats.
Be A Champion For Diversity
Despite this bleak reality, there is hope!
The polarisation between industry leaders and laggards in regards inclusion and diversity is noticeably growing.
For example, in 2019, industry leaders, companies with the highest levels of diversity within their executive teams were 62% more likely to outperform their competitors in terms of profitability.
The conclusion is simple. DON’T BE A LAGGARD.
Now’s the time to make your stamp and champion diversity in your company and industry – and society as a whole.
Talking about new groundbreaking policies and recruitment is one thing; but when it comes to diversity and inclusion, it’s all about walking the walk.
Embedding inclusive values into the culture of your business will fundamentally bring a positive top-down change that will undoubtedly be reflected in higher profitability, while also causing ripples across the business world in general.
Recruitrite is very proud to be an extremely diverse company where people are judged on the content of their character and their merits.