Employee Diversity: A Valuable Investment.
Every company talks about their ‘commitment to diversity’. And rightly so. But how can we truly achieve it?
Aside from it being a legal requirement (in the UK) for public companies to ‘promote equality in everything they do’, purely from a logical perspective it makes sense. If you want a wide user-base, from a range of backgrounds, the best way to achieve this is to have a team that reflects the market you are targeting.
If you, as a business owner, want to expand— whether the goal is to become a public company, or a unicorn, or even just a small business with a die-hard fanbase — you need to build a diverse team.
Diversity has to do with more than just gender or ethnicity (though of course these are hugely important aspects of it). Diverse workplaces are composed of employees with varying characteristics including, but not limited to, religious and political beliefs, gender, ethnicity, education, socioeconomic background, sexual orientation and geographic location.
But hey, don’t just take my word for it. The evidence is there.
McKinsey released a report last year, which showed that gender-diverse companies perform on average 15% better, and ethnically diverse companies 35% better. Of course, correlation does not necessarily equal causation, but the evidence suggests that when companies commit themselves to a more diverse workforce, they perform better.
Companies that embrace diversity and are competent at inclusion enhance customer loyalty. When the workforce is diverse and representative of target customers and partners there is an inherent understanding of the unique requirements of different markets. It has been found that “more than half of all international joint ventures fail within two or three years, due to a lack of cultural competency versus technical or professional expertise.”
Communities seek out organisations they can identify with or feel supported by. For example, in 2008, when the estimated spending power of the lesbian, gay, bisexual and transgender (LGBT) community was £81 billion in the United Kingdom and $712 billion in the United States , it was also estimated that 78 percent of the LGBT community and their friends and relatives would switch brands to companies known to be LGBT-friendly.”
But if the evidence is there, why is it proving so difficult for employers? Most HR Departments are desperately trying to promote diversity, so why is the change so painfully slow?
I would argue that the main challenge facing employers is inclusion. This may sound obvious, but it is an important point to be made. If the culture, mindset and hiring criteria of a company’s past has largely resulted in a certain demographic of employee tending to get the job, it is vital to ensure that future employees fit in and feel comfortable when they join. If they don’t, they will not perform to the best of their ability, and will leave, meaning that at a managerial level, diversity will still be a huge issue.
Thus, entry-level recruiters must be the key drivers of diversity, not just externally, but internally too. A diverse workforce must be created from the bottom-up, so that the overall culture of a company can shift over time. It is all well and good saying ‘we are pursuing diversity’, but with a general reputation that does not reflect this, not only will employers struggle to have a diverse range of applicants in the first place, but they will also struggle to retain those hires who feel like they don’t fit in.
Recruiters must find people from diverse backgrounds, with diverse skills, but who share many of a company’s perspectives and values. That way it’s more likely they’ll fit in and contribute towards a cohesive, productive team. And let’s not forget just how important it is to get that right fit: the most expensive part of the hiring process is when the wrong hire is made and the whole process has to start again.
So how can an employer make this change?
It is going to take a dramatic shift in the way in which employers recruit graduates to significantly improve diversity. A sole emphasis on qualifications and work experience — of which, students tend to have very little — leaves companies very open to hiring candidates from the same demographics over and over again.
My team at Headstart have decided to take a different slant on how to make this leap towards diversity, and we are looking forward to trying out what we have validated.
Students are more than just an application form. They are individual ‘fingerprints’ with unique backgrounds, perspectives and personalities. The best way for companies to ensure that they can pursue diversity, whilst emphasising inclusion, is to be aware of what demographics, skills, personality types and outlooks are missing from their team.
We have created an Applicant Matching System that is able to understand what qualities and backgrounds are missing from a team, and rank candidates accordingly. With a completely diverse team as an ultimate goal, we are able to recommend candidates who not only would be a cultural fit to an organisation, but who also have the missing skills, perspectives and experiences that will drive growth and expansion. As such, we can create a diverse workforce, whilst increasing talent and retention levels, something that researchers more qualified than myself have shown will happen.
This is the key. Diversity should not be forced. It should be a natural progression towards a better future. If everyone is aware of the value diversity can bring, and if everyone has the right tools to ensure that teams are balanced in their backgrounds and attributes from the bottom-up, then growth and increased productivity will naturally come.
Diversity is a necessity for companies of every size — if you want to keep up, it should be of primary concern. But don’t think of diversity as something scary and unknown, as something businesses should be worried about pursuing. Diversity is all around us — the different skills and qualities, the different perspectives and experiences — think of it as something you need to have in order to grow and succeed. The best innovations come when you put many different points of view together.
Diversity is a valuable investment.
Check out our site if you are interested in learning how Headstart can help you build a more diverse team at entry-level. And as always, feel free to contact us for more information, or just to have a chat! My next article is going to be looking specifically at the issues with current graduate recruitment processes, and analysing how best to improve these, for both small and large businesses.