Diversity is More Than Just a Buzzword—It’s Actually Good for Business

Although 21st century American culture has been putting a lot of emphasis on diversity hiring, many business leaders still see it as just another P.C. box to be checked-off rather than as a truly beneficial business strategy. However, study after study has shown companies whose workforces are diverse, especially at the executive level, actually perform better than those whose leadership is more homogenous.

As noted by business authors Sylvia Ann Hewlett, Melinda Marshall and Laura Sherbin in The Harvard Business Review (December 2013), there are actually two types of diversity: inherent and acquired. Inherent traits are biological, such as race, gender, age, and sexual orientation. These are in our DNA and are, for all intents and purposes, unalterable. Less recognized, especially in the business arena, are acquired traits, those skills and sensibilities we pick up through life experience. These can include socio-economic background, culture, language, religion, and employment history.

Each type of diversity brings with it a range of expertise and perspective that can spur business innovation. For instance, coming from a different social class, ethnic culture, or age bracket provides opportunities for the kind of “out of the box” thinking that allows companies to solve difficult problems, identify new opportunities, and appeal to disparate audiences. 

The latter is particularly important as we move deeper into the 21st century. Not only are more and more companies doing business overseas, which necessarily requires cultural sensitivities to the markets in which they intend to operate—but, as the 2020 Census revealed, the United States itself is rapidly becoming more and more ethnically diverse. 

Case in point, the White population (non-multiracial) has fallen 8.6 percent since 2010 and now account for just 55.8 percent of the country’s populace. The Hispanic/Latino population grew 23 percent over the past decade and now account for 18.7 percent of the population, while the Asian/Pacific Islander population grew 81 percent, making it the country’s fastest-growing ethnic group, now accounting for 7.2 percent of the U.S. population. As a percentage of the total population, Black/African Americans held steady, dropping just a tick to 12.4 percent of the population compared to 12.6 percent in 2010.

But the biggest change was among those who identified themselves as “multi-racial.” In 2010, this number was 9 million. It’s now 33.8 million, an increase of 276 percent. The bottom line: A company dominated by the traditional cadre of white, straight, upper-middle-class, college-educated males is just not going to have the tools to communicate to the culture kaleidoscope that is modern American.

One area that is frequently overlooked when it comes to diversity hiring is socio-economic background. As discussed in this recent Harvard Business Review article (January-February 2021), companies tend to draw employees, especially top-level management, from the same schools and business backgrounds, which results in cultural homogeny, regardless of the color of a candidate’s skin. 

On the other hand, people from lower socio-economic background—be they white, black, or brown—typically lack the social networks, private tutoring, extracurricular activities, and even family stability enabling people from more privileged circumstances to get ahead. Yet, many people from these backgrounds can be just as bright, just as creative, and just as hard-working—perhaps even more so—than people who went to the “best” schools, joined the “top” clubs, and hung out with the “right” people. 

Successful implementation of DEI (Diversity, Equity, and Inclusion) initiatives, on the other hand, helps make space for difficult conversations around race, gender, and ethnicity, a topic I moderated during a panel at Builder 100 Live, hosted by Zonda Events in Orange County last week.

As discussed at this event, as a leader, you must be vulnerable enough to say you don’t know what to say when put in an unfamiliar or socially awkward situation. It’s also imperative to be humble enough to ask others about their perspectives, especially those who don’t look like you or share your background. After all, the best organizational cultures include leaders in whom employees place a lot of trust. Part of being trusted is being willing to say something in a less than perfectly packaged way and asking for others to help fill in blanks for you.

Pay equity is another important part of the DEI conversation. It’s crucial to ensure you are paying employees based upon tenure, performance, and other bona-fide business factors, and that you don’t have pay inequities that look like they could be driven by race, gender, or ethnicity. (I do audits in this area and am especially diligent with my clients to get this right.)

Finally, it’s helpful to review your company’s job descriptions to make sure they don’t include unnecessary position requirements. For instance, do those jobs listing college degrees as a requirement really need them? Perhaps you could create mid-level jobs providing the opportunity for on-the-job training and development capable of acting as a bridge for those without degrees to transition from lower to higher level jobs at your company.

I’m hopeful you found this article helpful. If you’d like to learn how to better expand your hiring policies and practices to spur innovation informed by greater diversity, please email me at laura@conoverconsulting.com.