The Diversity Advantage

Today's post comes to us from Workforce Institute board member Neil Reichenberg. Here Neil discusses research that highlights the advantages of investing in increasing diversity in your organization.

Multiple reports have highlighted the importance of diversity and inclusion to the success of organizations. The 2017 Global Human Capital Trends report issued by Deloitte found that 2/3 of 10,000 leaders who were surveyed cited diversity and inclusion as either important or very important to business. A report by McKinsey, “Delivering through Diversity” issued in 2018 reaffirmed the link between diversity efforts and improved company financial performance.

While organizations are investing in diversity programs, the results would indicate that more needs to occur before organizations can claim that they are diverse and inclusive. For example, the Boston Consulting Group did research in 14 countries that found between 96-98% of large companies with over 1,000 employees are investing in diversity programs. Despite this, ¾ of employees in underrepresented groups do not believe they have personally benefited from their companies' diversity and inclusion programs. The top recommendations from the over 16,000 employees who were surveyed included: consistently following antidiscrimination policies; providing effective training to reduce biases and increase cultural competency; and removing bias from evaluation and promotion decisions.

The Canadian Center for Diversity and Inclusion conducted research with Dalhousie University   examining the diversity and inclusion practices in Canadian organizations. The survey  found that 100% of senior leaders are committed to diversity as a business strategy, although only 73% indicate they emphasize diversity and inclusion in their business strategies and 5% less indicate they frequently communicate about it to their employees. While 73% of senior leaders say they emphasize diversity in business strategies, only 64% agreed that the diversity strategy of their organizations is aligned with the business strategy. There were only 32% who said they were satisfied with the resources and time their organization dedicates to diversity education and training. Only 28% agreed that the diversity of employees receiving promotions is tracked against the organizational goals. The study shows that there is a gap between the statement that diversity and inclusion is a business strategy, and more concrete investment in diversity and inclusion.

Changes in law may need to be made in some countries to support diversity and inclusion. For example, in Great Britain, Sara Thornton, the chair of the National Police Chief Council, in comments made this year to the Guardian, called for allowing police forces to discriminate positively in favor of potential employees from minority ethnic backgrounds in order to make themselves more representative of the communities they serve. She recommended that new laws be passed to “shock the system.” Over the past 20 years, British police forces have been trying to get the proportion of officers from ethnic minorities to match the proportion in the populations they serve, but so far not one police force out of the 43 in England and Wales has achieved this, with 2052 being the earliest year in which this is estimated to occur. Positive discrimination where a recruiter makes an employment decision based on a protected characteristic is currently illegal in Great Britain.

Two examples from the public and private sectors where a commitment to diversity and inclusion has been made are:

  • Multnomah County, Oregon where an Office of Diversity and Equity (ODE) was created to ensure access, equity and inclusion in the county's services, policies, practices, and procedures. The County has developed a Workforce Equity Strategic Plan that has the strong support of the county leadership and in the employment area contains several focus areas, objectives, minimum standards and performance measures on organizational culture, promotion and professional development, retention, and recruitment and workforce pipelines.
  • Goldman Sachs which made a commitment recently to diversity by establishing goals that it expects will result in hiring more workers from underrepresented groups. The firm has set aspirational goals for the hiring of analysts and associates, since more than 70% of new hires are in these positions. For more experienced hires, the bank requires managers to interview at least two qualified diverse candidates for each vacancy. Like much of its industry, Goldman Sachs is dominated by white males, especially at senior levels where in the United States 80% are white. The firm has expanded a program begun last year and the senior leadership is confident that the aspirational goals can be achieved.

As the population becomes more diverse, those organizations that want to be able to recruit, retain, and engage top talent will need to increase commitment and resources devoted to ensuring a diverse, inclusive and equitable workforce.