Most business leaders understand that diversity in the workplace matters. We often hear of anecdotal benefits to problem-solving, decision-making and even employee satisfaction that diversity provides. However, not everyone has heard about the research that clearly shows companies that embrace gender and ethnic diversity outperform their less diverse counterparts.
To help you understand how diversity impacts business performance, here is some hard data based on research from global management consulting firm McKinsey & Company, which takes the idea out of the concept phase and into reality.
McKinsey gathered data from 366 companies in multiple industries that operate in the United States, Canada, Latin America and the United Kingdom to examine how diversity and financial returns may be related. What the research found was companies in the top quartiles for ethnic or gender diversity notably outperformed those in the bottom quartiles. For ethnic diversity, the businesses were 35 percent more likely to have financial returns above the national median in their industry, while gender-diverse companies were 15 percent more likely to reach the same result.
Additionally, when examining U.S. companies exclusively, the relationship was linear. With every 10 percent increase in ethnic diversity among senior leadership members, the earnings before interest and tax rose 0.8 percent.
While McKinsey acknowledges that correlation does not equal causation, it appears organizations committed to diversity tend to be more successful. This could be due to a number of factors that increased diversity can influence.
For example, a company dedicated to gender or ethnic diversity may be better positioned to attract top talent to their organization, improving the quality of their hires. Additionally, employee satisfaction may also be higher, directly impacting productivity. Decision making is also impacted, as a more diverse employee base can introduce new ways of thinking. Cumulatively, these can all bring a competitive advantage and create a self-perpetuating cycle for continued success.
The task of hiring a more diverse workforce isn’t an easy one. It requires focused efforts and often needs a variety of hiring approaches to cultivate success. However, there are methods that can make the process easier to start.
First, reevaluate your current methods for advertising job vacancies. This can include everything from how job postings are phrased to where the announcements are posted. Certain language choices are more likely to appeal to particular segments of the population, and not all candidates use the same job sites when searching for jobs.
If you don’t currently, consider reaching out to local, regional or national organizations to help you connect with a more diverse population like cultural institutions, university organizations and various nonprofits that work to promote opportunities for diverse groups. You can also work with recruiting firms, like Validity Solutions, to gain insight into how you can adjust your job announcements to bring in a more diverse set of applicants and access to candidates you may otherwise miss.
If you are looking for strong candidates for your current vacancies, Validity Solutions has the expertise you need. Contact us to discuss your hiring goals and how our services can help you achieve them.