5 Reasons You Can't Afford to Overlook It the Power of Diversity
First, the good news. Diversity in the workplace is increasing, which gives organizations greater access to talent. It also generates a more inclusive corporate culture that mirrors the society in which we live. The not-so-good news? Diverse workplaces are not always easy to achieve, for many reasons. Some geographical areas are more conducive to diversity recruitment than others, and a commitment to diversity can often be overlooked the higher up the corporate ladder you go.
Here are five trends we’re observing today. Let’s take a closer look:
1. Workplace diversity is improving.
More than half of workplaces report a rise in diversity over the past five years, according to XpertHR's Diversity in the Workplace Survey, published in 2016. Having a more diverse workplace has affected corporate policies for the better, too. Companies with diverse workplaces are more likely to permit unpaid time off for employees to observe religious, cultural or ethnic holidays.
2. Businesses are recruiting with diversity in mind.
The XpertHR survey found that companies hire for ethnic and racial diversity first, with military veterans a close second. However, the study also identifies some obstacles to diversity recruitment efforts, such as lack of minority candidates in some geographic areas, lack of time or other resources to move such recruitment efforts forward, resistance to change and the persistence of unintended biases that can manifest in a “like-hiring-like” phenomenon.
3. Business leaders realize diversity is not optional.
Many corporate leaders recognize inclusion and diversity as essential criteria for attracting and retaining top talent. The 2016 Diversity Competencies for Leadership Development Survey from the University of North Carolina Kenan-Flagler Business School found that top business leaders see an inclusive corporate culture as being an important factor in attracting and retaining employees, as well as a means to improving innovation and collaboration among its ranks.
4. Minorities are fast becoming the majority.
Within 20 years, projected growth among Asian, Hispanic and multiracial groups will put traditionally underrepresented populations in the U.S. majority. As HR experts observe, the companies that do best are the ones whose employee base has a similar demographic makeup to that of their customer base. Beyond the benefits of mirroring the country’s demographics, there are also performance benefits. According to global management consulting firm McKinsey & Co., companies with ethnic diversity are 35 percent more likely to outperform businesses that don’t have this diversity. The performance benefits are even higher -- 53 percent -- for those who are in the top quartile of executive-board diversity.
5. Diversity is lagging in the C-suite.
An unfortunate exception to the diversity trend is occurring in C-level positions. Women are sorely underrepresented, with a Korn Ferry Study finding only 24 percent of C-suite positions being held by women. The top-most position, CEO, has just 5 percent representation from women. A recent study by Peterson Institute for International Economics confirmed just how important gender diversity can be, identifying a 15 percent increase in profitability for companies that have a 30 percent share of women in C-suite positions. The representation of minorities in high-level positions is even bleaker. There have been only 15 African-American CEOs in the history of the Fortune 500, and just five currently hold the top role.
While companies may be recruiting and hiring with diversity in mind, they also need to ask themselves: Where do we go from here? Don’t assume that your corporate culture is immediately conducive to diversity. These steps can help ensure that it is.
- Implement workplace diversity initiatives. According to the XpertHR survey, many companies are moving forward with such initiatives as the formation of affinity groups, instituting mentoring programs and/or career development and focusing on supplier diversity.
- Embrace other points of view. Hiring a diverse workforce is only the beginning. It’s also important that you actively seek advice, opinions, and ideas from a wide range of employees to truly be inclusive.
- Create diversity-friendly policies. Some examples include flex-time and telecommuting opportunities, which are helpful for young parents who are juggling career and home life. Make sure your office is physically accommodating to those with disabilities. And be cognizant of religious holidays and cultural celebrations that may be important to your employees.
- Strive to change diversity in the C-suite. Recruit employees with advancement potential in mind, and focus on professional growth and employee development so that you have qualified minority and female candidates to choose from when top positions open up.
Corporate leaders can feel justifiably proud that diversity is more prevalent than it’s ever been before. However, that shouldn’t cause them to lose sight of the undeniable truth: We still have a long way to go.