Diversity targets are a tricky subject, on the one hand a company that has set a goal to increase the diversity of its workforce should be commended, however setting number-based diversity targets can also be linked to phrases such as tokenism and positive discrimination; both of which are bad traits for any company to possess. Ultimately diversity targets are a bit like putting a plaster on a punctured bike tyre, a temporary fix that wont last long.
It seems that for many businesses cultural changes are only made when there is a business argument to do so. Fortunately, when it comes to diversity the financial argument is a strong one. Time and again research by major consultancies, such as McKinsey for example, has shown the direct correlation between increasing diversity and increasing profits, McKinsey’s research showed that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians and companies in the top quartile for gender diversity are 15% more likely. [1] The McGregor-Smith government report suggested that the benefit of having a representative black and ethnic minority workforce would equate to an additional £24 billion a year to the UK economy, which represents 1.3% of GDP.[2]
Even with such a strong economic argument it is also important to remember that diversity is more than a numbers game, increasing diversity is morally right, it is important for both the corporate culture of a company and the way employees feel about their place of work. This morale obligation will become more acutely visible to company boardrooms as Gen Z becomes an ever-increasing proportion of the global workforce (over 25% by 2025), companies will soon realise that those born after 1996 will have more of an interest in company values than any previous workforce in history. The digital transformation and increase in connectivity throughout their formative years has made Gen Z acutely sensitive to social issues, from plastic in the ocean to diversity in the workplace.
As a result of this increased awareness, for companies to attract the best talent they will have to be more vocal about their values and show why they are, for want of a better phrase, a ‘good’ company for ‘good’ people, especially after young people witnessed the events of the Cambridge Analytica scandal. (For more on the subject of Gen Z in the workforce read “The Kids Are All Woke: Relevancy Amidst Demographic Change” by Hamish Docherty)
Based on the above, the focus for employers should be on making the process more meritocratic and fairer for candidates, rather than actively imposing bias to ensure diversity quotas are met. This approach will allow employers to talk openly about diversity and their inclusive approach to recruitment, without resorting to simply saying we have this many people from this place, that colour, this gender or that demographic.
By taking even small steps to make the process fairer, democratising opportunity by supporting those from disadvantaged backgrounds to become more aware of their skills, educating in-house recruitment teams on how to attract more diverse talent, giving diversity and inclusion managers a budget to make meaningful change and helping assessors and interviewers to identify strong candidates from a different background to the one that is familiar to them, should begin to have a positive impact on workplace diversity.
If you would like to discuss any of these topics further, please do not hesitate to comment or get in touch with us here at Occumi.
[1] https://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters
[2] https://www.telegraph.co.uk/business/business-reporter/uk-business-needs-to-catch-up-with-uk-society/