Companies should invest in diversity for their own good, as well as for the greater good

Recent events have sparked some much-needed introspection among businesses regarding their progress in the field of diversity. And while terms like ‘diversity’ and ‘inclusion’ have become common buzzwords in recent years, they represent important and valuable principles. Not only are companies under increasing scrutiny to prove they can back up their statements of intent with action, it’s in their own interests to do so as the business case for diversity is a compelling one.

State of the landscape

As of May this year, only 7% of Fortune 500 companies have a female CEO (a ‘record high’) and despite making up 47% of the workforce, women only hold 19% of board seats. When it comes to BAME representation the figures are bleaker still. More than a third of FTSE 100 firms have no board members of colour, and just 7% of board and executive level positions in the UK are held by someone from a BAME background. Further, 70% of FTSE 250 companies lack any ethnic minority representation at board level.

This is only a snapshot. There is clearly a lot of work to be done before corporate teams reflect the levels of diversity in our communities. Important business decisions are still being made overwhelmingly by a white male majority, and while working to diversify those teams might seem like a lot of work (and it is), businesses stand to gain much more in the long term.

Diversity gives businesses a competitive edge

While improving representation in the workplace is something we should all be striving for, it shouldn’t just be viewed as an ethical initiative. It makes considerable sense from a business perspective. The proof is in the data – a Boston Consulting Group study found that companies with more diverse management teams achieve 19% higher revenues, while research from the US Centre for Talent Innovation recorded up to 80% improvement in business performance among companies with high diversity levels compared to homogeneous organisations.

Different backgrounds and experiences lead to different perspectives, so if your employees come from a diverse pool of backgrounds, you are more likely to benefit from ‘cognitive diversity’ (diversity of thought) as well as different skill-sets (it’s reported that women are 25% better at mentoring than men, for instance). Teams which demonstrate a wider range of thinking and ideas can reframe problems with more innovative solutions, and are therefore better able to respond to customers’ needs.

Lastly, younger people in particular are now less willing to work for or do business with companies that don’t embrace diversity, so it’s something companies need to consider if they want to attract the best talent and the right customers.

Distinguishing between diversity and inclusion

The words diversity and inclusion are increasingly used side by side as something of an umbrella term – for instance, many companies now have a dedicated ‘D&I’ department or team lead. However, the terms aren’t synonymous and it’s important to clarify the distinction.

Diversity refers to representation among the people within your organisation and encompasses race, gender, socioeconomic background, sexual orientation, religion, disability and more. It is therefore easily measured. Inclusion is less clear cut as it refers to the sense of belonging felt by these communities, something that’s embedded in a company’s culture and is incredibly nuanced.

So if diversity is about improving representation among staff, inclusion is about making sure those underrepresented employees are treated equally and made to feel a part of the team. The two need to co-exist, and organisations shouldn’t be focused on one without the other.

How do I make sure my workplace is tackling both?

When it comes to hiring, blind recruitment is a good starting point to ensure teams aren’t unconsciously swayed by an applicant’s name or gender. Companies may also need to rework their job descriptions to appeal to a wider pool of applicants. For instance, studies show that job specifications which include an exhaustive list of qualifications can discourage women from applying, since they are less likely than men to apply for jobs where they don’t fit every requirement.

Companies should look to offer paid-for internships and traineeships to avoid socioeconomic discrimination, and target advertising to inner-city universities as well as more traditional institutions, since the former are more likely to attract a diverse mix of graduates. If you rely largely on recruitment firms, make sure they are aligned on your diversity policy and that it informs how they source applicants.

At the interview stage, it’s important to have a representative panel so that candidates feel more comfortable and you’re eliminating as much unconscious bias as possible. Secondly, standardise the interview process, as unstructured interviews lead to less considered hiring decisions, with people more likely to hire in their own image. Employee training and coaching plays a hugely important role here. There are many diversity experts dedicated to coaching people in areas such as workplace discriminiation and how to recognise and tackle unconscious bias.

It’s equally important to create a work environment that’s safe and inclusive so that diverse communities can thrive. This always needs to come from the top, which is why training senior leaders and decision-makers in these initiatives is just as (if not more) important than the wider team. Senior leaders need to show they are receptive to new perspectives and ideas, and encourage people at all levels and from all backgrounds to speak their minds in meetings and brainstorms. On top of ensuring everyone is treated equally, this prevents the ‘groupthink’ pitfall and means no potentially great idea is left unsaid.

A commitment to progress towards equal opportunity in the workplace is long overdue, and the business case for diverse teams is clear. Organisations that demonstrate their commitment to the cause through personnel time and expense or by establishing dedicated diversity programmes, are very likely to see a positive ROI.