Diversity is no longer a box ticking exercise but an active method of encouraging innovation and increasing returns to all stakeholders. A good deal of research, particularly in US shows that diversity increases productivity as well as being socially desirable. For example Bank of Nova Scotia began an ‘Advancement of Women’ program in 2003. The proportion of women in senior management went from 19% to 31% within five years and return on equity rose from 16.6% to 22.1%.
Diversity is now big business. In a similar way that the last decade has seen people pay much closer attention to whether their food, drink, clothing, etc is responsibly sourced, or what their carbon footprint is, employees and customers are doing more due diligence than ever before to see if they genuinely identify with a business before parting with their precious time or hard earned cash. The companies that embrace diversity, can reach millions of customers and potential employees through social media and are already seeing the benefits.
Having said this, most of us know relatively little about the subject beyond the equal opportunities statements / disclaimers on a corporate website or job specification. Of course, we don’t discriminate, but are we aware of the benefits a diverse workforce can bring to our business from the share price down to the decisions we make in our jobs on a daily basis?
What is Diversity? – Diversity in the workplace relates to the employment of staff that represent a broad social spectrum of society. Some of the key characteristics of workforce diversity include race, ethnicity, gender, age, religion, disability, and sexual orientation.
Business benefits of a diverse workforce
1 – Connection with the customer
In a global economy, clients and customers represent literally hundreds of cultures, customs and systems. If we want to truly connect with our customers our chances are dramatically increased if our employees reflect not only current but also the desired customer demographic. Take for example the ‘Pink Pound’. A survey by HM Treasury concluded that there are 3.6 million gay people in UK, with the value of their spending power or ‘Pink Pound’ at £70 billion a year. With Gay men earning £10,000 per annum more than the average for straight men and Lesbians earning £6,000 more than the average for straight women.
2 – Employee innovation
Studies by many institutions such as Universities (e.g. Harvard and London Business School) and businesses (e.g. Pepsi and Google) have concluded that a diverse workforce solves complex tasks better. It is more innovative than a homogenous group even if the latter are theoretically more talented. Pepsi attributed $250m of revenue growth per annum to new products inspired by diversity. Google has taken the approach of offering College Scholarships to Women to increase their representation in what is traditionally a male dominated sector.
3 – Continuous quality improvement
Clayton Christensen’s work on disruptive innovation. “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”
An environment where all employees are valued and helped to progress, will improve quality. We are all different, how many times have we said that a good manager knows how to alter their style and manage people according to their individual strengths and weaknesses. It naturally follows therefore that good companies recognise, embrace, promote and celebrate this difference at the corporate level, and as a result they find they get much more out of their employees.
So a brief intro to the business benefits of diversity – not all encompassing by any stretch. If you would like to contribute to the discussion or learn more, please join our networking group on LinkedIn – http://bit.ly/1ErVpbK
Equality & Diversity Linkedin Networking Group with Anne Strike
Paralympian Anne Strike is our group ambassador and will be using her expertise to help firms specifically address how they attract more employees with disabilities. Over time we would like to set up a mentor system where people with disabilities can link up with professionals and get support throughout the early stages of their career in Financial Services.
Born in Kenya, Anne was a fit and healthy child before being diagnosed with Polio at the age of 2. Growing up in a country ill equipped and in many circumstances superstitious about anyone with a disability, she had to overcome numerous obstacles. She graduated from Moi University before moving to Britain and was the first wheelchair racer from East Africa to compete at the Olympics.
Anne recently competed the gruelling 12 mile Tough Mudder obstacle course – becoming the first wheelchair user to attempt and complete the course. She was awarded an MBE in the 2014 birthday honours list for services to disability sport and charity.
Ink Recruitment is a Social Enterprise – we donate an average of >£500 from every placement we make and support charities such as Shine and the London Taxi Drivers Fund for Underprivileged Children.