Diversity Hiring: Because We Want To, Not Because We Have To
We hear a lot about the need for diversity within organizations, with the most obvious reason to spring to mind being the need, or indeed legal requirement to comply with equality in the US, UK or which ever country in question.
Another oft-cited reason for the need for workplace diversity is due to the demographic shifts that are taking place, meaning that businesses must develop a recruitment strategy that embraces diversity if they are to attract talent from the diverse marketplace and from within their own diverse workforce.
So, while there are good reasons why businesses ‘must’ adopt diversity based recruiting, I feel that we hear a lot less about reasons why we should ‘want’ to embrace diversity in our recruitment strategies and in the interests of fairness and equality I have outlined five of these reasons below.
1. Publicly traded diverse companies perform better
Research by DiversityInc reported by the SHRM found that over a 10 year period, the index of publicly traded companies in DiversityInc’s ‘Top 50 Companies for Diversity’ list outperformed the NASDAQ by 28%, SP 500 by 25% and the Dow Jones Industrial Average by 22%.
2. Diverse boards perform better
A 2009 study by CalPERS (reported by the SHRM) found that firms with a high ratio of diverse board seats exceed Dow Jones average returns. (All of the companies selected contained an executive responsible for diversity)
3. Gender diverse boards do better
Credit Suisse’s Research Institute conducted a study between 2005 and 2011 of over 2,500 companies and found that publicly listed stocks with at least one female on the board outperformed stocks with now females on the board by 26%.
4. Diversity helps drive innovation
In a survey by Forbes of senior executives in companies with over $10 billion turnover, they found that the majority of the executives strongly agreed that diversity was driving innovation in their enterprises. Companies such as Intel, Loreal, ATT and Mattel took part in the survey.
5. Diversity helps business compete globally
The Forbes survey also discovered that having a diverse and inclusive workforce enabled firms to compete more effectively on a global scale as it better enabled them to negotiate the cultural and language barriers.
So, while it is crucially important that recruiters understand both the legal and moral reasons behind a diversity based hiring strategy, I did not want us to forget that there are refreshing reasons to engage with diversity hiring, (beyond simple legal and moral compulsion), and that is that diversity hiring will make your business perform better, be more innovative and perform more effectively on a global scale.