This is a guest blog post from Kate Fletcher. She joined HRMS provider Fairsail in 2013 as Market Specialist, focusing on global cloud HR solutions. Kate focuses on issues surrounding the modern workforce and “workforce experience”, writing about the role of technology and how it is shaping and changing the way we manage and engage people at work.
Diversifying the workforce makes business sense. Most products and services are used by a diverse group of people around the world; from multiple generations and ethnic groups to gender and sexual orientation. A company’s make-up should surely reflect the range of customers?
In fact, there’s evidence – as recently reported by the BBC – that boards of directors with greater diversity generate more dividends; meaning greater returns to shareholders. In addition, McKinsey & Company, released a ‘Diversity Matters’ report in January showing that companies in the top quartile for gender or racial and ethnic diversity were more likely to have higher financial returns above their national industry medians.
Director of McKinsey’s London office, Vivian Hunt, said, “While correlation does not equal causation (greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit), the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful.”
Why is it then that only 4.6 per cent of chief executives of S&P 500 companies are women, and that there are just six black CEOs of Fortune 500 companies? Apple’s CEO, Tim Cook – who came out as homosexual late last year – has gone on record stating he isn’t satisfied with his company’s diversity, which is largely white or Asian and male. Less than a third of its global workforce is female and just 20 per cent of its technical workers are women. While, blacks and Hispanics make up just nine per cent of Apple’s management ranks. Twitter, Yahoo, Google, Facebook, eBay and LinkedIn have also reported that their staff are overwhelmingly male.
So how does all of this impact employee participation and engagement? Are parts of the workforce more likely to be disengaged because of the imbalance in their workforces’ diversity?
Well, for a start, it sends signals to existing and potential talent – many of whom will probably be millennials – if the organisation’s diverse it’s also mature, modern and culturally-aware. It can also be a sign to investors and partners that the company is adaptable in an ever-changing business environment.
Furthermore, different generations and gender groups have different skill and knowledge sets to offer an organisation. For example, Millennials may be tech-savvy but employees from the older demographics can help nurture younger talent by becoming mentors and coaches; providing informal learning more tailored to the individual in the workplace. This transmission of skills and knowledge can be the essential ingredient that turns a promising young starter into a mature and valued long-term employee.
Hunt commented, “More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns.”
While this data on current organisations certainly is interesting, it’s often reflective of large well-known companies. There are many smaller and successful multinational enterprises – and so this raises the question: are the same trends reflected in companies regardless of size? Are smaller organisations able to capture these sorts of data points easily? Would they even know what their diversity and inclusion metrics look like?
Is this where HR departments should take advantage of today’s technology? A cloud HR management system could easily bring together a global and diverse workforce in one place.
Isn’t it time the workforce experience was consistent across the diverse groups which make up the teams that help companies succeed? Managing demographic diversity is going to become an increasingly important consideration to attract and retain talent, reap the benefits of the workforce and, potentially, offset skills shortages.
How does your company fare?