Diversity has become a buzzword in business, and it’s clear that corporate America has a long way to go, with executive and c-suite numbers that don’t come close to representing the current population breakdown. A venture may be up-and-coming; it may be the next big thing; but is it diverse?
Companies are going to great lengths to find diverse talent for a variety of reasons: they want to level the playing field for minorities and women, they are getting increasing pressure from community leaders and their own boards to increase diversity, or they just think it’s the right thing to do.
Making the Case for Diversity
If you’re not sure whether diversity matters for your company’s recruitment efforts, recent research may sway your opinion. The McKinsey organization reported in 2015 that gender-diverse companies – those in the top 25 percent of female board representation, executive positions, and top management – were 15 percent more likely to exceed the average financial performance for their industry.
Companies with greater ethnic diversity are 35 percent more likely to perform above their national industry medians, making a strong case that your company will be more successful with greater diversity in top positions.
The research also found that the least diverse companies had lagging performance compared to national averages. And in the United States, earnings before interest and taxes rises .8 percent for every 10 percent racial diversity increases.
Diversity Leads to Success
Researchers haven’t yet figured out completely why greater diversity works, but more and more research is showing that it does. It makes sense that greater racial and ethnic diversity leads to more diverse ideas being shared. Assuming the best ideas rise to the top and are implemented, the company will become more successful.
For some start-ups, diversity seems to come naturally because some of the key founders and supporters are women or minorities. Others have an open mind about different ideas and methods of doing business. An attitude of openness toward new ideas and diversity has a beneficial impact on the company as a whole, however, even if diversity is not an innate part of the company from the start.
It stands to reason that those looking at the broadest pool of talent will be able to recruit the best possible executives and other top staff. When start-ups limit the talent pool, they miss out on top talent that can benefit their companies and bring new ideas and creativity to the table.
With all this in mind, companies owe it to themselves to make diversity an important part of their recruiting efforts. Increasing racial, ethnic, and gender diversity could be crucial to reaching goals and achieving future success for many ventures starting out on the ground floor.
The ThriveTRM recruiting system can help your company find the best possible talent and increase your diversity in the process. Contact us for information on our unique solutions for finding the best talent for your company.