Diversity has always been a no brainer for us at FDM. We value our employees and consultants for their own unique talents and potential, giving everyone an equal opportunity to be successful, no matter their background.
Diversity can also have a positive impact on business performance in a multitude of ways, from greater innovation and skill sharing to increased productivity and higher revenues. Forbes reveals that diverse teams deliver 60% better results and make better decisions in 87% of cases. The business case for diversity is now stronger than ever, and diversity, equity and inclusion are key pillars that should be a priority for every business.
We explore how hiring a diverse workforce is the key to organisational success.
What’s in this article?
- Key takeaways
- The business case for diversity
- Why is gender diversity important for corporate performance?
- Taking a proactive approach to diversity
“Diversity is not just our people but our ideas, our peers, our information. The importance of these diverse elements of FDM allows us to quickly adapt to changing environments and empower each other.”Sheldan Bristol-Walton, D&I Coordinator at FDM
- A healthy work environment that values all employees will improve employee satisfaction and boost productivity.
- Many job seekers say that diversity is a key deciding factor when considering job offers, so fostering a diverse workforce can help a business tap into the top talent.
- There are a number of ways you can improve diversity, equity and inclusion in your business, including improving hiring and promotion processes, educating your employees and investing in external recruitment companies.
The business case for diversity
There are countless benefits of diversity for team performance, which support the business case for diversity. We outline the value diversity can bring to all aspects of your business and your employees.
Employees from different backgrounds bring a variety of skills, ideas, experiences and perspectives, which will translate into teams that can offer greater innovation and problem-solving capabilities. Hiring candidates with similar ways of thinking can limit the creativity of your teams and, in turn, cap your business growth.
According to Deloitte, employees who feel their company is supportive of diversity and feel included, report an increase in their ability to innovate - by up to 83%! Therefore, building a diverse team will reap continuous benefits, attracting more diversity and expanding an organisation's skill set, fostering more innovation.
Broader skills set
Similarly, tapping into a wider pool of candidates with a variety of skills can also benefit your business. Not only will you have a larger arsenal of skills within your teams, but you will create an environment where employees can learn from one another, encouraging continuous learning and development.
At FDM, we recruit consultants within the business and technology sector, no matter what degree they did at university. For instance, candidates from a technical background may go on to become industry experts, whereas literature graduates make for a well-rounded employee with the potential to reach the same levels of success with the right training. These employees can then share what they have learnt from other academic fields and paths of life, building an overall stronger team.
Improved employee satisfaction
Accepting and celebrating diversity promotes a healthy work environment that makes employees feel valued. As a result, employees will be happier, look forward to coming to work everyday and their overall job satisfaction will improve, and this will be reflected in their work performance. Happier employees can also significantly improve retention rates and reduce turnover, therefore decreasing recruitment and training costs.
Studies reveal that unhappy workers are approximately 10% less productive than their happy colleagues. A company that looks after its employees is more likely to have employees who really care about the business they work for!
Best of all, job satisfaction and productivity are cyclical - the higher the satisfaction, the higher the productivity and vice versa. This is due to the feel-good chemicals released in the brain when we accomplish something. It’s science!
Better understanding of your customers
Diversity doesn’t just benefit employees, it benefits customers, too. According to LinkedIn, 49% of companies believe it is important for diversity to be part of culture as it allows them to better understand and represent their customers. As such, companies should strive to build a workforce that mirrors the diverse profile of their customer base.
Demonstrating strong company values and promoting positive initiatives around diversity, equity and inclusion can also have a positive impact on how customers interact with a business. Deloitte found that up to 50% of customers’ purchasing decisions are influenced by an organisation’s support for equality. Diverse companies have the ability to build more authentic customer relationships, which can have a positive impact on sales and revenue.
Larger talent pool
Job seekers are on the lookout for diverse workplaces that not only hire diverse people, but strive to create a safe and inclusive environment for its employees. In fact, Glassdoor reveals 76% of those actively looking for jobs say that a diverse workforce is an important factor when considering job listings and offers.
So, if you’re looking to recruit the very best talent, you’ll need to make sure you are doing everything you can to improve diversity in your business. You will also need to offer full transparency, so potential talent can see exactly what you offer and choose your business over competitors.
In addition to the social and intellectual benefits of diversity in the workplace, hiring diverse teams can actually prove financially advantageous. Studies by McKinsey & Company find that companies with more diverse workforces perform better financially, with a direct correlation identified between a diverse workforce and higher profits. More specifically, companies in the top quartile for either gender diversity or racial and ethnic diversity are more likely to have financial returns above their national industry averages. Companies in the top quartile for racial and ethnic diversity are 35% more likely, and those for gender diversity are 15% more likely to perform above the national average financially.
Why is gender diversity important for corporate performance?
Research by McKinsey & Company predicts that closing the gender gap could add $28 trillion to the value of the global economy by 2025. However, only approximately 30% of women progress into leadership roles, which indicates there is significant potential for growth for many organisations.
The gender gap is prevalent in the technology industry with just 26% of those in the tech workforce being women, however these figures are similar across industries, including finance, agriculture, engineering and television.
“Companies cannot expect to remain competitive in a global economy if they are not tapping into 50% of the potential workforce; therefore recruiting a gender diverse employee population isn’t just the right thing to do, it is also the smart thing to do. Through our Women in Tech Initiative we work to encourage and inspire women to enter the tech sector and have seen a consistent rise in the number of women joining our company, with 40% of the senior management team identify as female.”Sheila Flavell CBE, Chief Operating Officer, FDM Group
There is a correlation between board diversity and firm performance with recent studies revealing that there is a positive effect of having more women on corporate boards and in C-suite roles, based on various measures such as ROA and PER. These studies analysed S&P 500 companies in the IT sector and concluded that companies should consider having a larger share of women on their boards as a means of influencing firm performance.
Similarly, a 2016 study of 21,980 firms across 91 countries found that mix-gender boards outperform all-male boards, and the Fortune 500 companies with the highest proportion of women on their boards performed significantly better than those with the lowest - with regards to higher stock values and greater profitability.
LinkedIn surveys show that 57% of women at work believe that a relatable role model in leadership is key to achieving career success. Therefore, the positive effects of women in leadership will trickle down and foster a more inspiring workplace. Ultimately, job roles have no gender and candidates should be chosen on their ability to fulfil their job.
Taking a proactive approach to diversity
We’ve compiled a list of some of the steps you can take to proactively support diversity, equity and inclusion in your organisation, improve employee satisfaction and boost business performance.
- Audit your organisation - one of the first things you need to do is identify the barriers that exist for certain groups in your organisation and acknowledge the areas you need to improve to eliminate these obstacles.
- Look at all aspects - you need to consider all aspects of diversity within your business, such as race, gender, age, neurodiversity and sexual orientation. Recognise and appreciate all differences.
- Standardise your hiring processes - it is imperative that you provide equal opportunities to all through unbiased hiring practices, such as blind CVs and strength-based interviews.
- Evaluate your promotion procedures - ensure your internal hiring, appraisal and promotion processes are fair to prevent injustices at leadership level.
- Educate managers and employees - education is key when it comes to creating an inclusive work environment. There are various training programmes and workshops available for diversity education.
- Improve policies for maternity and paternity leave - it’s important to improve your leave policies for new families and make them inclusive to all who need it, and not just for ‘traditional’ families,
- Run a diversity report and make this public - it’s best to be transparent about your diversity, equity and inclusion goals, as well as the current state of play. This way, it showcases your values to potential talent and the direction your business is going. See the FDM gender pay gap report.
- Invest in external recruitment companies - transforming an organisation doesn’t happen overnight and implementing new processes can take time and money. Investing in external recruitment companies who already have this infrastructure in place and can offer a diverse talent pipeline, like FDM, can save you a lot of the leg work.
If you’re looking to build a pipeline of diverse talent, check out our consultant services or get in touch for more information.