Inclusion and Employee Diversity: Here are the Numbers - Analytics in HR

Inclusion and Employee Diversity: Here are the Numbers

It’s easy to say that your company is diversified and inclusive. With the recent news of numerous employee diversity and inclusion issues in a lot of...

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2524 1

It’s easy to say that your company is diversified and inclusive. With the recent news of numerous employee diversity and inclusion issues in a lot of industries, including Serena Williams joining a Silicon Valley boardroom to help companies diversify their workforce, companies are becoming increasingly aware of their activities when it comes to hiring. This article provides an overview of how important employee diversity really is, how it is developing in the workspace and how it can be measured.

Employee diversity: the numbers

According to a recent study by the McKinsey Global Institute (MGI), employee diversity is associated with better business results. In the study, titled “Diversity Matters”, 366 public companies were surveyed from different countries in the Western World. Two key findings:

  • Gender-diverse companies are more likely to perform 15% better
  • Ethnically-diverse companies are more likely to perform 35% better

Although being diverse doesn’t directly translate to more sales or profit, companies who have a diverse population tend to be more successful. Here are some other statistics for you to consider:

  • Earnings before interest and taxes (EBIT) increased by 8% for every 10% increase in the ethnic and gender composition of senior executive teams in the United States
  • In the United Kingdom, companies have seen a 3.5% increase in EBIT for every 10% increase in gender diversity in the same senior executive team.

Diversity is good for businessIn other words: employee diversity is good and we see our workplaces becoming more and more diverse.

According to Census Bureau, groups that were traditionally seen as “minorities” in the United States will reach majority status by 2044 due to their projected growth.

Wanda Hope, Chief Diversity Officer of Johnson & Johnson in New York, has said that to cater to their customers efficiently, their workforce makeup must reflect their customer makeup as well. This will allow the company to understand the issues and problems faced by people from different walks of life.

Business Leaders on Employee Diversity and Inclusion

Diversity is an important topic for leading companies all over the world.

Tamara Ingram, CEO of J. Walter Thompson, said that companies are now aiming for diversity and inclusion inside their organizations because “it’s the right thing to do” and “it’s transformation for the business.” Further, she said that the commitment in this strategy should start from the top of the organization – and that it should be measured!

The CEO of Kaiser Permanente, Bernard J. Tyson, said that it’s important to evaluate first the current environment that a company has. Is it welcoming enough? Is it safe enough? Is it open enough for people to bring their “nuances” from their histories? By having an enabling environment, there would be rich conversations inside the company.

Employee diversity is about a company opening and diversifying its recruitment channels. It’s not about expecting people from all walks of life to come in via the same recruitment channel that has been used over and over again in the past. It’s a conscious effort to tap into different types of colleges and universities, and people from different socioeconomic backgrounds to achieve workplace diversity and inclusion.

Women in the Workplace

If you’re closing your doors to women and other ethnicities, you’re attracting a limited skill set and talent. Speaking of women, another study by MGI stated that blocking women from unleashing their talents and potential to be a part of the workforce is going to make the global economy suffer.

Indeed, a specific top performing region could earn more by $12 trillion or 11% of their annual GDP by diversifying its workforce in terms of gender. Moreover, the global GDP could increase by 26%, or $28 trillion.

Based on MGI’s own metric for Gender Parity Score (set at 1.00), the highest is at 0.74 in North America and Oceania. However, South Asia excluding India is at the lowest with 0.44 GPS.

MGI’s Gender Parity Scores represent the data between the gender equality in society and gender equality in work. Furthermore, MGI has said that they haven’t seen any country that has a high societal gender equality while having a low gender equality in work.

Further down this funnel, the number of graduates worldwide is at 60% percent. However, only 3% of women are in leadership roles in their respective businesses. There’s definitely a difference in the entry of women in the workforce and their growth in their career ladders. If there are more women graduates globally, then why is it that only a few of them are managing in the workplace?

Companies in the Diversity and Inclusion Spectrum

According to PwC’s 18th Annual Global Survey, 85% of CEOs have said that having a diversified and inclusive workplace population improved their bottom line.

In another study by PwC, business leaders don’t want to get left behind, so they’re implementing a diversity and inclusion strategy. This is a good strategy on their part because the next generation of the workforce (millennials) are eyeing the companies who are aware of policies on diversion and inclusion at 86% (female) and 74% (male).

Moving on to the company size as a factor, based on a survey by XpertHR, the bigger the company, the higher chances it has of a formal or informal diversity & inclusion program.
Employee diversity and inclusion by company size

It makes sense that bigger organizations have a diversity and inclusion program in place because they simply have to recruit more people.

However, as you know by now, employee diversity has a real impact on society and the workplace.

So, how to get started?

The final question to answer is: how to get started? First of all, you need to measure diversity. This is in line with what Ingram said. When you start to measure diversity, you can set and track targets.Employee diversity dashboard
This image was published in the Guardian, about KPMG’s diversity goals. Tracking this data in a diversity dashboard is an excellent way to start. Using data, you can also track which recruitment channels bring in the most diverse crowd. Leveraging this data can help in reaching diversity goals, which is the second solution.

Creating diversity goals is a second great way to work on increasing employee diversity. They can help to reshape recruitment efforts and hiring practices to be more open towards others.

By setting these goals in stone, it’ll help your recruitment efforts be geared to real changes in your company. You can start by identifying your company’s passion points. Get to know your employees’ issues and experiences. You can use surveys with questions that actually build the data that you want to have. As an example, employee information can be provided by demographic-focused questions. Note: Be aware of data storage rules. Diversity data is oftentimes highly confidential.

Make sure that you inform your employees of these employee diversity goals. Also, don’t forget to measure if you’re hitting them!

A third solution is the creation of workplace diversity and inclusion programs. These programs help to onboard and retain new hires, and create a more inclusive work environment.

Whichever solution you choose, what’s important is you’re working on making your company as diverse and inclusive as possible.


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1 comment

  1. James Reply

    Great article.
    Target setting is an interesting issue though. It conjures, for some people, unfairness in its own way. How are the targets enforced? Monetary encouragement? People might only respond to targets that have an outcome for them but might think them unfair if they feel they can’t control the outcome (even if they can affect them).
    Is it worth thinking of measuring how many actions you take toward encouraging diversity?
    Having the conversation though and education about why diversity (and I extend this to how people dress, think, react to things) is definitely
    Key to success (as a race!) in the future. This article is very good for that.