The Importance of Diversity in the Workforce: Where We Are, Why We Need It, and What We Can Do
By Ellen Zhang
Chief Marketing Officer
Learn about the current state of diversity in the workforce, the difference between diversity, inclusion and equity, why you should invest in all three, how to create and foster a work environment that promotes all three, and how internships can help with the diversity problem.
What is the current state of diversity in the workforce?
Image from Pew Research Center
In the U.S. alone, there will no longer be any single ethnic or racial majorities by the year 2065, according to Pew, and immigrants and their children will make up 36% of the population. The U.S. Census Bureau reported in 2015 that 44.2% of people identified themselves as other than “white” and women are more likely to possess a degree than men (30.2% to 29.9%). In a Gallup survey, the number of adults that identified as LGBT in the U.S. rose from 8.3 million to 10.052 million from 2012 to 2016. Religious diversity in the U.S. is undergoing transformation as well. According to the Public Religion Research Institute (PRRI), 43% of Americans were white and Christian in 2016 compared to 81% in 1976. Though non-Christian religious groups make up only 10% of the population as a whole, they are growing and nearly 1 in 4 Americans are now religiously unaffiliated. As the U.S. and the world continues to become a melting pot of diverse identities, so too should our workplaces.
Image from the N.Y. Times
While nearly every major company has some form of diversity initiative in place and around 90% of the Fortune 100 companies have a Chief Diversity Officer, true diversity in the workplace still lags. In recent years, the N.Y. Times found that there were fewer women in chief executive positions than men named John, Robert, William, or James despite the fact that women are more likely to possess a degree than men. In addition, there have only been 16 black CEOs of Fortune 500 companies since 1999, and in 2016, 4 out of 5 new board appointees at Fortune 500 companies were white. The share of African American appointees did not significantly change from 2015, though the number of Hispanic or Latino and Asian American appointees both grew to nearly 6.5% each from 4% and 4.8% respectively.
Atlassian’s 2018 survey on diversity in the tech industry found that less than 30% of people in underrepresented groups had retention and a sense of belonging. In addition, there was a decrease in up to 50% in individual participation in diversity initiatives year over year. While most respondents agreed that diversity initiatives were important, people complained of “diversity fatigue” in the workforce, where too much focus became on buzzwords and not enough action and actual progress was occurring. Less than 50% of respondents would rate diversity initiatives in their organizations, teams, or the tech industry as a whole with an “A”.
In addition, people may say they think diversity initiatives are good, but there are unconscious biases towards promoting diversity. A study by two professors at the University of Colorado showed that female and non-white executives who exhibited diversity-valuing behaviors were rated worse by their bosses than their counterparts who did not actively pursue diversity-valuing behaviors. Working adults were also asked to review hiring decisions by a fictitious manager and rated female and non-white hiring managers as less effective when they hired a non-white, non-male candidate than when white males hired any type of candidate.
While progress in diversity, inclusion, and equity has been made, there is clearly a lot more work to do.
What is the difference between diversity, inclusion and equity?
We often think of diversity as an umbrella covering inclusion and equity. This is a misconception. A great blog post by Meg Bolger, founder of Same Team, breaks down the differences between diversity, inclusion and equity.
Diversity is when differences are present within a collective group. Individuals represent different identities from race and gender to age and socioeconomic background. Diversity exists in relationship to others.
Inclusion is making sure individuals with differences feel welcomed and valued. Just because you have a diverse workforce doesn’t mean every employee feels like they belong.
An equitable workforce recognizes that not every employee has had access to the same opportunities and seeks to correct this imbalance.
All three work together to create a sustainable and fair workforce for the future. Diversity, without inclusion and equity, is insufficient.
Why should I invest in diversity, inclusion and equity in my workforce?
Diversity, inclusion, and equity have various key benefits for your workforce and several research studies by reputable sources support this. A study by Forbes shows that diversity is a key driver in innovation. Because diversity encompasses many silos, each individual has a unique set of experiences and perspectives that contributes to new ideas. Another study from Tufts University involving a mock trial with mock juries and a panel also indicates that diverse groups perform better than homogeneous groups. Diverse panels raised more facts about the case, conducted broader deliberations and overall performed better. The study points out the value of diversity in discussion. By bringing in multiple viewpoints, businesses can find different and new ways of solving problems, overcome tunnel vision, understand a diverse range of customers and make better decisions. In addition, top talent in the workforce often seek diversity at their jobs, and in order to attract them, it becomes imperative to have programs in place. In less than a decade, millennials will make up about three quarters of the workforce, and diversity is a hot button issue many millenials care about. Making sure your diverse workforce is equitable and inclusive will also reduce employee turnover rates and cut down recruiting costs.
Diversity also contributes positively to a company’s financial performance. According to the American Sociological Review, companies with the highest levels of racial diversity bring in almost 15 times more sales revenue than companies with the lowest levels of racial diversity. Additionally, McKinsey’s “Delivering Through Diversity” 2018 report shows that companies in the top quartile for gender diversity on their executive teams were 21% more likely to have above-average profitability over companies in the last quartile. Credit Suisse published a study that echoes McKinsey’s findings. It found that large businesses with women on the board outperformed all-male boards. Companies with boards that included women were found to have higher returns on investment, lower debt to equity ratios, higher price/book values, and higher net income growths.
People have tried to prove otherwise. Dr. Scott Page, a professor at the University of Michigan, designed a simulation to show that groups of “very able people” (students in his complex systems analysis class) would outperform the “able and more diverse groups” (people outside the class). Instead, the simulation showed that the “able and more diverse groups” actually outperformed the “very able” groups and came up with more out-of-the-box ideas. This is because interacting with those who are different forces us to be more prepared for alternative ideas and put in more effort to collaborate towards a consensus.
How can I create and maintain a diverse, inclusive and equitable workforce?
Creating and maintaining a diverse, inclusive and equitable workforce needs to be a thoughtful process and continuous effort. Here are several ways you can work your way towards a diverse, inclusive, and equitable workforce:
1. Clearly define and break down your diversity initiatives. What are some goals that you want to accomplish? For example, maybe you want your workforce to be 50% female in the next 5 years. In that case, conscious efforts need to be made during the hiring process. Seek different avenues of recruitment and make sure you’re interviewing x amount of women. Clearly-defined goals will help guide your efforts.
2. Use data to get buy-in from upper management. Sometimes it can be difficult to begin a diversity initiative in your workplace due to push back from senior management. Perhaps you’ve hired a Chief Diversity Officer and they think the job is now done. Provide data to prove that x amount of your workforce is still from the same background or that out of the last 10 people you hired, they are all x. Concrete data will serve as hard proof for senior management that change still needs to happen.
3. Listen to your employees. Create a safe space where employees can be vocal without repercussion. If someone is feeling uncomfortable, being called racial slurs, or getting sexually harassed, there needs to be processes in place that ensure these concerns are heard and taken action upon.
4. Embrace vulnerability. Perhaps the CEO’s child is a transgender woman. Giving your CEO and their daughter a platform to speak about their experiences can be a powerful indicator of acceptance and inclusion in the workplace and cause a ripple effect of more conversations. Create programs where employees can socialize and educate each other about their backgrounds. Even electronic communications such as a weekly newsletter with employee profiles highlighting their culture, history, hobbies, and more could help.
5. Assume the stereotypes you’ve heard throughout your life have affected your unconscious biases. No one is safe from having unconscious biases. The key is to acknowledge and to help others acknowledge patterns of unconscious biases. Once you recognize these patterns, you can seek to unlearn them by opening up your network exposure.
6. Create training programs that can help level the playing field. Equally capable and intelligent employees have not all been given the same opportunities in life to succeed. Part of being equitable is ensuring that employees who may not have had the opportunities to learn or be trained on certain job aspects are able to acquire that knowledge without being deemed as falling behind or less capable.
7. Be proactive. It’s easy to roll out a couple of initiatives and think that you are all set. Making sure you’re creating a work environment that’s not only diverse but also inclusive and equitable requires continuous thought and work. Stay ahead and constantly research and experiment with new initiatives.
On top of these tips, there are great startups and technologies out there that specifically seek to help organizations with their diversity challenges and to help underrepresented populations get hired. For example, Tech Connection is a recruiting company that helps connect minority tech workers with software and IT companies, and Infor Talent Science uses predictive analytics to eliminate intentional and unintentional recruiting biases. Leveraging these resources can help ease your diversity initiatives.
How can internship programs help with the diversity problem?
According to the National Association of Colleges and Employers (NACE)’s 2014 Internship & Co-Op Survey, 64.8% of interns received full-time offers from employers, making internship programs the perfect place to start with diversity initiatives. Hiring diverse interns will help ensure your talent pool for full-time employees is diverse as well. One non-profit, CODE2040 is seeking to solve the tech industry’s diversity problem through internships by placing top performing students of color at internships in the world’s most renowned tech companies.
Internship programs are also great for experimentation. College students are often eager to try new things and contribute their value. Tasking them to think of new diversity initiatives can lead to innovative ideas for the entirety of your organization.
In addition, using an internship management platform like Symba allows companies to scale and virtualize their internship programs, expanding the scope of who can be hired and when. Students from all different backgrounds, including those who can’t afford to travel to the major cities where internships are often offered, will have access to internships and a more equitable launching point to career success. If we want to create a more diverse, inclusive and equitable workforce, then we must address the creation of workforce pipelines.