Why Diversity in the Workforce Matters
It’s not just a fad – a diverse and inclusive workforce leads to better business performance, and should be driven by HR.
But does diversity matter? Along with the gender pay gap, it’s a topic that comes up again and again, but is it just a vanity parade for HR? In reality, a diverse workforce of different genders, ages, identities, ethnicities and world views can have a direct impact of the success of your company.
It’s the Law
Let’s start with the legal bit. UK legislation forbids companies from discriminating against people by age, disability, race, religion, gender, sexual orientation and more. Aside from being morally the right thing to do, if your company is found guilty of discrimination in the workplace, you could face some hefty fines and toxic PR.
It’s not just a fluffy ideal so your company can appear politically correct – there’s a direct correlation between diversity and financial performance.
A 2018 study by McKinsey found that the most ethnically and culturally diverse companies are 33% more likely to perform above the national average than those who aren’t. For companies who have a mix of genders, it’s 21%.
More Attractive to Top Talent
Companies who are genuinely committed to a diverse and inclusive workforce are more attractive to potential recruits. A study by Glassdoor found that 59% of hiring managers stated a lack of investment in D&I as a barrier to attracting the very best hires, and 20% said it’s among the most significant elements in their decision to join a new organisation.
Once your new recruits are through the door, an inclusive atmosphere will ensure they perform to their full potential. By valuing everyone as an individual you’ll create an environment where all staff feel comfortable, valued and better able to give their all. Presenteeism is already a big issue for UK businesses, costing the economy billions every year, so any step to reduce the effects will be highly beneficial.
Companies with diverse workforces are better at problem-solving and are also more innovative. A 2017 study published in the Harvard Business Review found that cognitively diverse teams solve problems faster than teams of cognitively similar people. A diversity of thoughts, ideas and ways of working means problems can be tackled from different angles.
How can HR Help?
As HR professionals, the power is in your hands to shape D&I in your company. The first step is, simply, to make it a priority. Creating and publicising a strategy that focuses on tackling short term issues, but with long term goals in mind, will demonstrate how much D&I is valued.
Make sure you bring the whole company with you. Surveying employees for their views will ensure you get an accurate reflection on the situation at your business, and give you a benchmark to record future results against. Set up a taskforce (which should itself be diverse, obviously) will drive the changes forward and ensure all departments within the business are heard. IBM did exactly this and tripled its number of female executives, as well as doubling the number of minority executives.
But it’s not a short-term fix. PwC started its journey to diversity in 2004, when just 11% of its partners were female. By focusing on diversity, establishing deep dive D&I analysis to inform purposeful governance and strategies, 26% of partners are now female, as are 44% of the Global Leadership Team. To implement this across a large and diverse group of companies, they ask member firms to adopt a ‘2+1’ approach – focus on the two common issues of ‘gender’ and ‘valuing’ differences, plus at least one further dimension of diversity that is important locally.
Diversity is so much more than a box-ticking exercise or legal obligation – it’s a must for all modern businesses to compete in a diverse world, vital to their long-term future and that of the economy as a whole. By embracing diversity and inclusion, you’ll develop a company culture that gives your employees, and therefore your business, the greatest chance of success.