Intro: Diversity matters
Removing bias from important people decisions is both a legal expectation and socially the right thing to do. But it’s more than that. Research shows gender, ethnic, and cultural diversity, particularly within executive teams, correlated to financial performance.
Research by McKinsey covering over 1000 companies across 12 countries found that companies in the top quartile for gender diversity on their executive teams were 21 percent more likely to experience above-average profitability than companies in the fourth quartile. For ethnic and cultural diversity, it is a 33 percent likelihood of outperformance.
The quest for top talent is as fierce as the competition for customers and profit. Not hiring for diversity can make a workplace less attractive to minority groups triggering a vicious cycle. The well known case of Uber’s prolonged lack of diversity and poor culture leading to a major upheaval of its leadership and HR functions in mid 2017 is a good example.
A diverse workforce is more likely to unlock innovation and drive market growth compared to a less diverse one. Hence diversity and inclusion are business imperatives to stay competitive and establish a virtuous cycle of attracting, hiring and sustaining the best talent.