The financial benefits of diverse recruitment can be quantified. How about the cost?
Let’s start with your budget set aside for recruiting underrepresented minorities. How much of your recruiting budget is dedicated to that mission? If the answer is zero then not only do you have a culture problem, you’re hurting your business’ bottom line.
Let’s look at diversity and inclusion-oriented recruiting by the numbers: the value of diversity to employees + benefits of inclusion-oriented recruitment, and how to present the business case for diverse recruiting.
Quantifying the importance of diverse teams
The employees have spoken, and they’re in favor of diverse teams. 67% of American employees surveyed by
A study of the importance of diversity and inclusion to millennials conducted by Deloitte came up with undeniable arguments for actively pursuing diversity into recruitment practices.
According to the study,
- 71% of millennials argue for diversity and inclusion efforts in the workplace as a business case, and many of those believe that diversity and inclusion-oriented programming aimed should be centered on those improved business opportunities
- Millennials noted diversity and inclusion’s positive impact on “outcomes as a result of the acceptance of cognitive diversity, specifically individualism, collaboration, teamwork, and innovation.”
- 83 percent of millennials report increased engagement when they feel their organization prioritizes engagement, compared to 60% who report decreased engagement for organizations without diversity and inclusion efforts
We’re talking about millennials specifically because they’re the largest generational cohort in the workforce and their influence is only growing. Their presence in the workplace is intrinsically tied to the prioritization of diversity and inclusion because:
- Millennials are the most racially diverse generation in US history, with 44% identifying as minorities
- Over 20% of millennials identify themselves as LGBTQ+
- Over 15% of millennials working in the US were born abroad
With millennials making up such a large percentage of the workforce, we need to be asking ourselves: how much money needs to walk out the door before our companies wake up?
Recommended For Further Reading
Presenting the business cases for inclusion-oriented recruitment
When it comes to getting HR a seat at the table, metrics are what matter. So that’s what we’re going to deliver: cold, hard numbers from proven studies that will help you win over skeptical stakeholders.
- For investing in inclusion-oriented recruiting: According to McKinsey’s 2018 Delivering Through Diversity report (PDF), the lowest-scoring companies for gender, ethnic, and cultural diversity were 29% less likely to achieve above-average profitability than all other companies surveyed.
- For increasing diversity in senior leadership: According to that same McKinsey report, companies in the top-quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation. Companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability.
- For impressing investors: Companies with diverse boards have a 95% higher return on equity than those with homogenous boards.
- For consciously filling your pipeline: A study conducted by diversity hiring study Jopwell and the professional golf organization PGA the found that the top two reasons BIPOC candidates weren’t applying to work at the PGA were lack of awareness (27%) and lack of access to contacts in the industry (26%).
- For increased productivity: Organizations ranked highly for engagement by Ernst and Young report 57% better collaboration.
- For driving innovation: Companies that actively create diversity programs are 70% more likely to enter new markets and 45% more likely to grow their market share.
- For almost-guaranteed financial returns: Not only are gender diversity and increased financial returns correlated, but employee engagement (which is positively correlated with diversity) and gender diversity predict positive financial performance.
- For increased retention: Retention is 19% higher at companies ranked highly for diversity and inclusion than average organizations.
- For increased engagement: Women managers and employees are 6% more likely to be engaged in their work and organizational culture than men.
Knowing what we know about the performance value of diverse teams, we can’t make excuses for not making the effort to diversify our pipelines. These facts and figures should win over any concerned board and help you get the funding you need to hire right.