Diversity is good for business.
Today, diversity in the workplace is a top priority for businesses, not-for-profits, government, society, and – most important of all – the vital talent that will drive their future success. There are plenty of research statistics that support this.
McKinsey research finds that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians and that companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns. According to the consultancy, more diverse companies are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns. Other interesting findings from McKinsey include:
• In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.
• Racial and ethnic diversity has a stronger impact on financial performance in the United States than gender diversity, perhaps because earlier efforts to increase women’s representation in the top levels of business have already yielded positive results.
• In the United Kingdom, greater gender diversity on the senior-executive team corresponded to the highest performance uplift in our data set: for every 10 percent increase in gender diversity, EBIT rose by 3.5 percent.
But diversity shouldn’t be reserved to the upper management echelons. Businesses can’t optimise their chances of success if everyone within them thinks the same, acts the same and has the same interests. Diversity at all levels of the organisation makes businesses open to new ideas and new ways of thinking, proven contributors to success.
According to PwC, 77% of CEOs said they already have a diversity and inclusion strategy or plan to adopt one in the next 12 months. The firm has also conducted research that shows that 86% of female and 74% of male millennials consider employers’ policies on diversity, equality and inclusion when deciding which company to work for.
So, if your organisation isn’t taking measures to embed diversity in the workplace, it is already behind the curve. Given the hard benefits that diversity has been proven to deliver and the expectations of the increasingly highly prized talent pool, it’s a subject that cannot - and should not - be avoided!