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Why workplace diversity is key to company performance

Why workplace diversity is key to company performance

In our post-Black Lives Matter moment, diversity and equality in the workplace is a hot topic. At the beginning of this month David Lammy, Labour MP for Tottenham, gave a compelling keynote speech at the CIPD Annual Conference. He nailed down the difference between equality and equity, highlighting that essentially, achieving true equality requires a more nuanced understanding of equity – that is, how where we come from impacts our opportunities.

He remarked that in the context of racial equality, this means a deeper appreciation of whether or not the individual in question lives with the socio-economic consequences of racism. For example, he explained that people often conflate white privilege with being rich and wealthy, when it is actually about “the absence of having to live with the consequences of racism.”

Definitions and details aside, one very important point Lammy made on the podium was the strong business case for a diverse workforce. Citing data from a recent McKinsey report, “Diversity wins: How inclusion matters”, Lammy explained how bosses and businesses benefit from an inclusive workforce.

Diverse businesses outperform the competition

The McKinsey report certainly contains some remarkable statistics. According to their research, which analysed a thousand large firms globally, the more diverse the workforce, the better the company performance. Organisations whose executive team was more than 30% female were more likely to outperform those with between 10-30%, and in turn, those companies would outperform those with fewer or none at all.

The same went for ethnic and cultural diversity. McKinsey’s business-case findings discover that companies in the top quartile for diversity outperformed those in the bottom quartile by 36% in profitability. As with gender, the likelihood of outperformance increased with greater ethinic diversity.

Lammy speculated that this edge is borne from the root of equity, that is, where we all come from. This is because the “journey travelled [by each person] matters”, and with this journey, comes different skills. According to Lammy, this is why diversity in terms of background and culture make an impact, as well as gender.

Diversity is key to attracting top talent

Moreover, a diverse workforce is essential to attracting this key talent in the first place. According to a study from Glassdoor, one in three job seekers would not even bother to apply for a job at an organisation that lacks diversity in its workforce. Therefore, applying actionable strategies to hire diverse candidates is key.

Suggestions are simple: establishing clear, timely and achievable diversity targets are crucial. Equally, a multi-cultural religious observance policy will set the company apart from the pack. Another idea that’s particularly relevant to the engineering and construction sector is offering internships and apprenticeships, which are particularly useful for attracting women or candidates from lower-income backgrounds.

Whatever the approach, the first step will always be recognising the benefits of a diverse workplace, not only for company reputation but also the material gains that result from different perspectives and approaches. Promoting diversity in the workforce has become an essential component of any good recruitment strategy – and any successful business.

 

 

 

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