Diversity in the workplace is not only important, it’s essential. And the current global unrest over racism and equality is causing most companies to look inward and revisit their own hiring practices and overall company diversity.
What is diversity in the workplace?
Diversity in the workplace means that a company’s workforce includes people of varying gender, age, religion, race, ethnicity, cultural background, sexual orientation, religion, languages, education, abilities, etc. In this blog, we will examine 5 important statistics HR practitioners can source when asked why diversity in the workforce is important.
1 - The US Workforce is Becoming More Diverse
According to CNN Money, the workforce is becoming more diverse. The millennial and Gen Z generations are the most diverse in history. Only 56% of the 87 million millennials in the country are white as compared to 72% of the baby boomer generation.
In a recent article by The Society for Human Resource Management, the workforce and customer base are changing rapidly and companies are taking notice. Due to projected growth among Asian, Hispanic and multiracial groups, traditionally underrepresented populations will hit majority status by 2044, according to the Census Bureau. The article points to companies like Johnson & Johnson and AT&T who are emphasizing the importance of reflecting that reality in the collective makeup of their employees with the understanding that yesterday's workforce can't lead them into tomorrow.
2 - Top Talent Cares About Workplace Diversity
More importantly, more diverse generations have become increasingly more interested in a diverse and inclusive workplace. According to GlassDoor, 67% of job seekers consider workplace diversity an important factor when considering employment opportunities, and more than 50% of current employees want their workplace to do more to increase diversity. Their study showed that 72% of woman, 89% of African-Americans, 80% of Asians, and 70% of Latinos ranked workplace diversity as important in their job search. This means that a diverse workforce is essential to attracting top talent.
3 - Diversity Drives Innovation and Performance
The Harvard Business Review found that diversity is not only an issue of fairness, but a driver of innovation and performance. In researching over 1,700 companies, they found that the most-diverse enterprises were also the most innovative, as measured by the freshness of their revenue mix. In fact, companies with above-average total diversity, measured as the average of six dimensions of diversity (migration, industry, career path, gender, education, age), had both 19% points higher innovation revenues and 9% points higher EBIT margins, on average. All six dimensions of diversity had statistically significant correlations with innovation, both individually and collectively, although industry, nation of origin, and gender had slightly larger effects.
4 - Diversity Improves Engagement
A major benefit of diversity in the workplace is employee engagement. According to a recent study by Deloitte, research showed that engagement is an outcome of diversity and inclusion. Deloitte captured the views and experiences of 1,550 employees in the manufacturing, retail and healthcare space. The study showed that the link between workplace diversity and employee engagement is straightforward – when employees feel included, they are more engaged.
5 - Diverse Companies Gain Higher Financial Returns
Probably the most telling statistic was found in a 2015 study by McKinsey & Company. Their research showed that when compared to other companies in the same industries, companies that are highly gender-diverse are much more likely to gain higher financial returns than their competitors. How much more likely? Try 15 percent. Even more telling was that companies that were ethnically-diverse were 35% more likely to gain higher financial returns.
How can you improve your company's workplace diversity?
To make the case to your company’s executive decisions makers to invest in D&I programming, you have to demonstrate that it is a good business decision. These statistics will give you a great starting point to build your case to launch a diversity and inclusion program.