Companies that maintain a diverse workforce tend to outperform those who don’t, many studies have shown. In fact, diverse firms benefit not only from higher financial returns, but have more satisfied workers and attract better talent.
Global consultancy group McKinsey & Co. quantified some of the benefits in a 2015 report that examined 366 companies from a range of industries.
“In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent,” researchers found.
Meanwhile, gender-diverse companies are 15 percent more likely to outperform non-gender-diverse firms, and ethnically diverse firms more likely to surpass their competitors by a staggering 35 percent, the same study found.
The research isn’t being ignored by the private sector. Many U.S. companies are embracing diversity not as a challenge to overcome, but as an opportunity to create a vibrant and successful workplace culture.
Last year, American retailer Build-a-Bear Workshop Inc., for example, was named one of the top 10 best workplaces for diversity by Fortune magazine. Women account for 87 percent of its workforce, while minorities make up 35 percent. Breaking the numbers down further, 16 percent of the company’s workers are Hispanic or Latino, 10 percent are African-American, and 2 percent are Asian.
Build-a-Bear’s Director of Di-bear-sity Arvetta Powell attributes a large share of the company’s success to finding employees who reflect the customers it serves.
“We believe that diversity in our team enriches us, challenges us and makes us all more successful,” she said. “Creating and maintaining a multicultural, diverse and inclusive work environment is a high priority for our organization.”
Nowhere is the discussion about diversity more prominent than in Silicon Valley, where some tech entrepreneurs are taking it upon themselves to help other companies build diversity.
Take San-Francisco-based engineer Stephanie Lampkin, for example. Her job-matching app, Blendoor, seeks to remove racial and gender bias from the hiring process by obscuring the names and faces of workers so employers can hire the best individual based on merit alone.
“I know a number of really successful, Ivy League-educated, African-American people between 35 and 45 who refuse to use LinkedIn out of fear of discrimination,” Lampkin explained earlier this year to Forbes. “As a woman of color, that’s driven how and why I’ve shaped the product the way I have.”
Joelle Emerson, founder and CEO of a consultancy called Paradigm Inc., is also working hard to inject more diversity into companies. Her business, based in San Francisco, has worked with tech startups such as Pinterest and AirBnB to improve training and inclusion initiatives.
Some of Silicon Valley’s biggest names are getting in on the act, too. Slack, the creator of a workplace collaboration tool of the same name, is emerging as a leader in terms of tech sector diversity.
Since 2015, the proportion of women working at the global firm has grown to 44 percent, up from 39 percent and much higher than the industry average of 29 percent. The number of black engineers has grown to 7.8 percent globally, up from 7 percent. Still, the proportion of Asian and Middle Eastern employees has stayed essentially the same.
Last month, 30 tech companies ranging from GitHub to Apple pledged to diversify their workforces.
There’s still ample room for improvement and innovation when it comes to diversity in the workplace. However, it’s promising to see so many American companies in the tech sector and other industries not only taking it upon themselves to build more diverse work forces, but also push other businesses do the same.
“We live in a deeply connected and global world. It should come as no surprise that more diverse companies and institutions are achieving better performance,” Mckinsey & Co. said in its diversity report. “Given the higher returns that diversity is expected to bring, we believe it is better to invest now, since winners will pull further ahead and laggards will fall further behind.”