Organisations identified by McKinsey as being in the top 25% quartile for racial and gender diverse senior management teams are more likely to have returns above their industry national medians.
Grant Thornton found that the difference in performance between companies in the FTSE 350 with all male board members was lower by 0.53% when compared to companies with at least one female member. This doesn’t sound much but that percentage equates to a return on investment across the FTSE 350 that is measured in billions of pounds.
This increased diversity at work could boost the UK economy by £24bn per year. But according to a study published by the Harvard Business Review, female employees of companies without diversity in their management teams are 20% less likely than heterosexual, white male colleagues to win endorsement for their ideas.
Why you shouldn’t ignore diversity
Being the only person in any situation is unnerving for even the most confident person. This is especially true for people who are invisibly different, because of their religion, sexual orientation, gender identity, or health (including mental health).
It is a situation that can be addressed by business owners encouraging employees to find out about each other’s culture and lifestyle away from work, in a way that champions inclusion and understanding.
The connection between diversity and improved results is, however, not automatic. Simply appointing more women or more BAME managers will not directly create better financial returns.
Linking diversity to company values
Having diverse voices in the workforce can confront the status quo and encourage out-of-the-box thinking which in turn drives innovation. This can then lead to new ideas, new products and services and new ways of working that will result in growth.
Studies show that the most successful organisations have stopped treating diversity as a separate initiative and have effectively integrated diversity into all their operations and employment policies.
50% of employees at the Imperial College London’s Department of Surgery and Cancer are female. They have recently announced that the number of mothers returning to work after maternity leave has increased to 87% since the introduction of family friendly policies. At the same time, a change in approach to flexible working is seen as the reason behind a doubling of the number of female scientists it employs since 2013.
Acceptance leads to productivity
It is important for employers to demonstrate through their employment policies, procedures and culture that they value employees as individuals and not just for their work performance. Employers must be able to recognise the value that their employee’s culture and lifestyle brings to and adds to the success of the business.
Business owners can benefit from employees who bring language skills, cultural experience and creativity to their businesses. Diversity is critical to a company’s ability to adapt to a fast changing environment as it brings a fresh and new outlook to perspectives, experiences, culture, gender and age. Other employees can also learn from co-workers whose work styles vary and whose attitudes about work vary from their own.