A diverse workforce isn’t a box-ticking exercise to satisfy onlookers and look good on paper. A diverse workforce means better results across the board.
Companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians than those that do not. Companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians than their peers without.
Why does it have such an impact?
There isn’t enough space to list every benefit a diverse workplace can bring to a business. Here are just three big ones. If you want to hear more, you should watch Vicki Pickering’s talk.
It’s great for business
PwC have found that companies embracing diversity gain higher market share and a competitive edge in accessing new markets – a ‘diversity dividend’ first quantified in a recent study by the Center for Talent Innovation (CTI). Business leaders increasingly recognise this. In their most recent 18th Annual Global CEO Survey, 85% of the CEOs surveyed whose companies have a formal diversity and inclusiveness strategy said it’s improved their bottom line.
It may seem obvious, but the greater your diversity, the more potential customers you can reach. When you bring a variety of different people from various backgrounds together, you’ll end up getting better solutions to business problems. If you don’t have a diverse workplace, you might not be able to tackle problem the best way. For instance, if you have no Asian employees and you’re trying to sell to the Asian market, it will be much more difficult for you. You can search on Wikipedia all day long, but having someone who is actually part of that culture is a great advantage.
Within Redington, having staff that speak the same language as European clients has directly resulted in deeper relationships being formed and new business won.
It gives people the chance to learn and grow
Ultimately, a business is a collective of individuals. The business will live or die according to who it hires. For most CEOs, growth is always the goal. So, it stands to reason that your people need to grow too. Working with people from unfamiliar backgrounds, who think and reason differently, is a great catalyst for personal growth.
By working with people from different backgrounds and with different experiences and working styles, we learn and get another view. Diverse views make for better decisions, and thus drive a high-performance culture.
It’s the right thing to do
Progress is being made on improving diversity – but there is still a long way to go. Let’s take the issue of gender equality; Women account for 60% of college graduates but only 3% of leaders worldwide. Women and girls also represent two-thirds of the world’s illiterate population.
Good workplace diversity doesn’t just benefit the businesses themselves, but also the economies they operate in – a fact underlined by research from the non-profit organisation Catalyst. This shows that increasing the level of female employment could help raise GDP by 5% in the US, 11% in Italy, and 27% in India. And that’s before you start to quantify the positive social impacts that would also arise.
The world is becoming more connected and open than ever before. It is up to business owners to make sure their people reflect the world we are now living in. A diverse workforce is no longer a ‘nice to have’. It’s necessary for a business to flourish – those who ignore it will be left behind.
Simple actions you can take to create a diverse workforce
There needs to be a real focus on avoiding affirmative action. The aim is to ensure diverse recruitment initiatives and produce a diverse output, not a good prospective photo.
The focus is always on hiring the right people, regardless of their background. Ensure gender and ethnic diversity – remove sexuality and gender bias from the recruitment process.
- At senior level
- A great deal of research suggests lateral female hires take longer and require a more involved process, but the time it takes is worth it.
- ‘Return to work’ schemes work! Invesco perpetual have cited Redington as the reason they took the plunge and ran a similar programme.
- Use a broader range of recruiters i.e. not just financial services recruiters.
- Use different channels e.g. recruiters, databases, social media, referrals.
- Junior level
- Recruit from the top 10 students from ‘lower-ranked’ universities rather than top 100 students from ‘higher-ranked’ universities.
- Non-university recruitment e.g. offer internships to students we come across through RedSTART, Investment 20/20 and our CSR activities.
- Non-school routes – charities/youth reform organisations – work with social mobilities foundation (looking at top students at lower ranked schools)
- University of Southampton is an interesting case of producing top employees but not necessarily from top A-level achieving school-leavers
- Being present at non-finance career fairs and at specific society events i.e. sponsoring a girls’ netball team, Afro-Caribbean societies etc.
3 organisations we love
- The 30% club – The 30% Club launched as a campaign in the UK in 2010 with a goal of achieving a minimum of 30% women on FTSE-100 boards. It has expanded its remit to include 30% gender diversity at senior levels across FTSE 100 organizations
- Key member of Investment 20/20
- We’ve signed up to the Diversity project – The purpose of the Diversity Project is to accelerate progress towards an inclusive culture in the investment profession