Blog | Why a Diverse Workforce Gives you a Competitive Edge
As a female leader in the technology sector, the topic of equality is one that's very close to my heart. I’ve been very fortunate throughout my career to receive the support and encouragement I needed to take advantage of the opportunities made available to me, but this isn’t the case for everyone. How people think, feel, look and act, can still hinder their chances of professional success.
There are of course strong ethical reasons why it’s important to provide equal opportunities and create a diverse and representative workforce, however, if ethical reasons aren’t compelling enough for you, consider this…fostering a culture of diversity, equality and inclusivity isn’t just good for the soul, it’s also great for business!
There's an increasing body of evidence showing that a diverse workforce can lead to solid, tangible business benefits. So, what are the top 5 business benefits you could expect to see?
1. Strengthened employer brand
The key to the success of any business is their people. Your ability to attract and retain top talent has never been more of an imperative, and the issue of diversity and inclusion has become a differentiating factor. In a 2017 survey by PwC, 54% of women and 45% of men said they researched if a company had a diversity & inclusion policy before taking their most recent position. A further 61% of women and 48% of men said they assessed the diversity of the company’s leadership team when deciding to accept an offer. Put simply, by promoting diversity and inclusion you can improve your chances of bringing in great people and keeping them!
2. Increased innovation and collaboration
Once you have that top talent, you want to get the most from it. Research by Deloitte shows that if employees believe their organization is committed to, and supportive of, diversity it improves their ability to innovate. Furthermore, the study also reported that feeling included within a diverse workforce leads to improved team collaboration.
3. Better business decisions
High cohesion is the feeding ground of 'Groupthink'. A team with a broad mix of experiences, perspectives and opinions, will tend to make more considered and robust business decisions. People are forced to consider alternative viewpoints and work harder to reach agreement.
4. Improved customer experience
For me, this one is common sense. If your business is one that serves a diverse customer base, then having an equally diverse and representative workforce at all levels of your organization means you are better positioned to understand and empathize with your customers. Equally, diversity and equal opportunities are important social issues, not just for the candidates you're looking to hire, but for companies you're looking to do business with. I personally experienced this a few years ago, when a large corporate customer of the technology vendor I worked with at the time explained that one of the reasons they decided to do business with us was the fact that we had a diverse team representing our company during the pitch. By comparison, our competitors’ pitch teams were largely made up of 'white middle-class males'.
5. Improve your financial performance
All of the above benefits, if capitalized on, should, of course, lead to improved financial performance. But if you are yet to be convinced, a study by McKinsey revealed that companies ranking in the top quartile for diversity within their executive-boards achieved a 53% higher Return On Equity (ROE) on average than those positioned in the bottom quartile for boardroom diversity.
So, there’s plenty of evidence to show that diversity provides businesses with a clear competitive advantage, as well being something to strive towards for sound ethical and legal reasons. But of course, it’s not always easy for an organization that’s not currently diverse to transform itself into one that is!
Diversity and inclusion are easier said than done
Here are some of the biggest challenges I think you may face:
Becoming more diverse takes time
Even if a business is strongly committed to becoming more diverse, its leadership can hardly just snap its fingers and magically change the make-up of its workforce. In most cases, you are going to have to wait for natural attrition. Gradually as people leave, you can look to replace them with more diverse talent.
Diversity needs to be embedded
You can have a committed leadership team, a Diversity and Inclusion department, and all the right policies, but the hard part is often embedding diversity and equality into the culture and fabric of your organization (in other words into the way individuals naturally think, operate and make decisions). For organizations who currently have a very homogenous workforce, that’s going to require a major shift in culture.
Psychology can work against diversity
Think about the last time you went to a party where you didn’t know many people. In this kind of situation, many of us will gravitate towards those people we believe we will have the most in common with, feeling more comfortable surrounding ourselves with people who look, feel and think like us. Being with people who are very different to us can be more challenging and can sometimes take us out of our comfort zone. But this inclination to surround oneself with people ‘just like us’ works directly against diversity.
The problem of unconscious bias
A lot of the biases that operate against diversity and inclusivity in organizations are unconscious. For example, despite an average pay disparity of 30% in favor of men within UK financial services companies, a survey we undertook found that 72% of men and 68% of women believed that people succeeded on merit within their organizations. Significantly, 90% of senior managers believed this to be true showing that those with the most power to influence and drive change don’t always recognize the severity of the problem. In the same survey we found that whilst employees tended to cite characteristics they defined as feminine, such as empathy and compassion, as the traits required of a good leader, they identified traits they defined as masculine, such as confidence and assertiveness, to be the ones that were most recognized and rewarded in their organization. These unconscious biases are a hurdle we need to overcome.
Stepping stones towards a diverse and inclusive culture
Whilst I do believe that creating a culture that truly embraces diversity and inclusion can have its challenges, I also believe that all can be overcome. Here are some simple steps you can take on your journey to becoming a company of equality, diversity and inclusivity:
1. Start with your employer brand: Your brand needs to show that the company values and promotes diversity and inclusivity in order to attract diverse talent.
2. Remove bias from your processes: For example, use blind recruitment techniques in the early rounds of your recruitment process, and ensure that the people making your hiring and promotion decisions represent a diverse group, even if the rest of your organization is not yet diverse. This can help mitigate against unconscious bias.
3. Diversify your decision making: Establish diverse teams to help you with all your critical business decisions.
4. Prioritize diversity training for middle managers: This will help them understand the real business benefits of diversity and make them aware of how they can be unconsciously biased in their decision making. You want to educate and support your middle managers so that they are comfortable building and supporting a diverse team.
5. Celebrate diversity: To really create a culture of inclusivity you need to celebrate all the things that make us unique and special. This can be as simple as making sure you are celebrating lots of religious festivals and not just Christmas, through to recognizing ‘awareness days’ such as World Mental Health Day or International Women’s Day.
6. Create a diversity and inclusion “task force”: Find people in your organization who are passionate about diversity, equality and inclusion, and get them to help champion the changes needed within your organization. Hopefully, this goes without saying, but this task force should comprise of a highly diverse group of employees!
I consider myself very lucky to have had the opportunities that I have over the last 20 years of my career. It’s now in our hands to make sure that everyone has equal opportunity to develop and grow professionally, and then we can all reap the rewards of a happy, diverse and inclusive workforce and society at large! If you enjoyed this blog, take a read of my other one on Secrets to 360 Degree Feedback Success.