How Your Company Can Improve Diversity in 2017
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Addressing diversity and gender parity is top of mind for business leaders and organizations across Canada and around the world, and it makes sound business sense. Statistics show that organizations with a diverse workforce perform better, are on the cutting-edge of new technologies and ideas, maintain an engaging organizational culture and in return see a positive impact on their bottom line.
Why Does Diversity Matter? It Drives Performance
Research by McKinsey, in a report titled Diversity Matters, finds that more diverse companies experience financial gains.
“Our latest research finds that 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. And diversity is probably a competitive differentiator that shifts market share toward more diverse companies over time,” says Vivian Hunt.
The report found:
- Ethnically diverse companies are 35% more likely to outperform
- Gender diverse companies are 15% more likely to outperform
- While certain industries perform better on gender diversity and other industries on ethnic and racial diversity, no industry or company is in the top quartile on both dimensions
Diversity and Gender: Women Continue to Be Underrepresented
Only 41% of the global workforce are women, and even though there has been an increased effort to improve diversity, research by Mercer, When Women Thrive, Businesses Thrive, finds that we are actually working backwards and the economic gender gap will not close for another 170 years – 52 years longer than originally projected.
“We see increased focus on hiring and promotion of women into executive ranks, but these hires appear to be ad hoc and not supported by systemic practices. Even when we examine additional opportunities to close gaps in hiring, promotion and retention that disadvantage women, the forecast still falls short of parity,” says the report.
Key findings include:
- Only 38% of organizations says that male employees are engaged in gender diversity efforts
- Just 28% of organizations say women are as represented in P&L roles as in functional roles
- Only 29% of organizations routinely review performance ratings by gender to check for disparities
- Only 35% of organizations have a pay equity analysis built on a robust statistical approach – 34% have a formalized remediation process to address identified inequities
Even with all the effort to improve gender diversity, there are still a number of glaring issues:
- A global female labor force participation rate of 54%, compared with 81% for men
- A significant gap in pay between women and men
- A persistently small number of women in senior positions
How to Improve Diversity in Your Organization
“Vowing to make a company more inclusive and diverse requires understanding what many underrepresented people face in the workforce and coupling that with why organizations should be more proactive in recruiting them. This conversation is anything but new, yet most industries are making scant gains. The only way to overcome that is to analyze what the underlying problem is. Following that, they can formulate a strategy to build better, stronger, and more successful teams. It’s as easy as that,” says Cale Guthrie Weissman on Fastcompany.com.
Here are some things that you can do to take steps in the right direction:
- Acknowledge that you have a diversity issue: Stop playing the blame game and take an internal look at your organization’s hiring, promotion, and HR practices.
- Examine the state of your organization: Who holds leadership positions? How diverse is your organization currently? What trends exist?
- Assess your recruitment and talent sourcing practices: Where do you look for talent? Where else could you be looking for talent? What new approach to recruiting could you implement to attract a more diverse talent pool?
- Understand that diversity means more than meeting a quota: Having a diverse organization is not just for appearance. If you hire to simply fill a quota, you could actually be doing a disservice to your organization by impacting performance and culture.