The Value of Diversity Part I: The Reason

This is the first article of a three-part series where we discuss the reason, value, and method for achieving workplace diversity.

According to McKinsey's Diversity Matters report [1], diverse teams have a higher likelihood of producing above-average business returns.

"Companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns."

Furthermore, in McKinsey's survey, 87% of respondents stated that diversity 'possibly' or 'definitely' has a positive impact on performance. This reinforces the correlation between organizational diversity and financial success at the corporate level.

This study is worth reading as it highlights several other key benefits to racial and ethnic diversity in organizations. For example: [2]

• Racially diverse teams outperform non-diverse ones by 35%
• Teams with equal numbers of men and women earn 41% more

There is still a long way to go toward achieving workforce diversity that reflects the demographic profile of society, but beyond the humanistic reasons, there are financial motivators as well. Sometimes those tangible benefits must be pursued before attitudes and mindsets catch up.

The State of Diversity in America's Workforce

The ideal state of diversity in an organization would reflect the diversity of the population in which it exists and the customers it serves. Sadly, that is not the case in American business today.

Corporate Leadership

• Women make up 51% of the population yet only 4% of Fortune 500 CEOs are female.
• There are only five Fortune 500 CEOs that are African American. Even fewer are openly gay.

Hiring and Rank

• Men are 30% more likely than women to be promoted from entry level positions to manager.
• Resumes submitted by people with African American-sounding names are 14% less likely to get a call back than those with white-sounding names.
• When applying to jobs, white applicants receive 36% more callbacks than equally qualified African-Americans, and 24% more callbacks than Latinos.

Pay

• African-American women earn $0.63 for every dollar white men earn in the same positions.
• White women are paid $0.79 and Latina women are paid $0.54 for every dollar white men earn.

Diversity and the Core Values Index

Psychometric assessments like the Core Values Index can help add valuable understanding about others that transcends differences like race, ethnicity or gender. They can reveal commonalities between individuals that are not obvious at first glance. These commonalities can bridge the gap between assumed stereotypes and people's true selves.

Age diversity can bring huge benefits to an organization. There is often too much emphasis placed on youthful energy and moldability, especially in the tech sector, but there is tremendous value in embracing the wisdom and experience of older workers. Those who have been in the industry for a while exhibit beneficial attributes like leadership, emotional intelligence, strategic thinking, and other soft skills that often take years to develop.

Another advantage experienced workers have is they are more established in their lifestyles, often owning homes and putting down roots in their community. This makes them less likely to quit their job and move to another part of the country or even another continent. Turnover has a huge negative impact on the bottom line.

Don't let anyone tell you an old dog can't learn new tricks. Empowered and engaged top performers of any age are always willing to grow and expand their skills and knowledge base. In fact, having a lot of skills under their belt can actually make it easier for older workers to pick up new ones because they have refined and streamlined the learning process that works best for them. [Author's Note: I have learned 25 programming languages in my career dating back to FORTRAN and Pascal, and I can attest that once I had learned two or three, additional languages became easier to pick up.]

Benefits of Diversity

• Ethnically diverse companies are 35% more likely to outperform their respective national industry medians
• Gender diverse companies are 15% more likely to outperform their respective national industry medians
• Companies reporting the highest levels of racial diversity in their organizations bring in nearly 15 times more sales revenue than those with the lowest levels of racial diversity.

Harness the benefits of an age diverse team and embrace what employees of all levels of experience have to offer.

A person's value and worth is not diminished by their status in a particular group, it is enhanced by it. The harm comes not from their status but by the stereotypical assumptions others make based on that status.

Economic disparities are a common factor in the perceived differences between people. Yet a person's economic or social status has no bearing on their innate core values. A person's ability to contribute to the world around them is not visible from the outside, but is revealed through their psychometric profile.

To improve diversity, reduce bias in the hiring process. Candidate information can be redacted that triggers stereotype bias. Bias can also be reduced by making choices only after objective information has been reviewed and not before.

It is through processes that leverage psychometric assessments, and when active policies and actions are implemented from the top down, that the real and just benefits of diversity can manifest not only in today's business world, but in the world at large.

In the next article in this series, we will highlight an example demonstrating why diversity matters in today's business world.

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Sources:

[1] https://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters

[2] https://blog.clearcompany.com/10-diversity-hiring-statistics-that-will-make-you-rethink-your-decisions