Whether you are a company of one or one thousand, each person you employ is your greatest investment. Getting the highest rate of return on your “people” investment involves another investment—embracing diversity.
Demographic trends identified by Pew Research Center include racial and ethnic diversity in the United States on a continuous rise. By 2055, it is projected that the U.S. will not have a single ethnic majority due in large part to Asian and Hispanic immigration. Today, 14% of the country’s population is foreign born, compared with just 5% in 1965.
Diversity is not only about race and ethnicity. Age, gender, color, religion, sexual orientation, and mental and physical special talents and special needs are also included in the definition of diversity. Changes are taking place in many of these demographics. Approximately one-fifth of the workforce is aged 50 years or more and the retirement age is increasing as more and more Baby Boomers choose to work past the traditional retirement age of 65. Women-led households, adults who have never been married, interracial families, and Americans with no religious affiliation are all on the rise as well. Two-parent households, and Christianity are on the decline. These trends affect not only the workforce, but the marketplace as well.
What does diversity mean for companies?
Having a diverse workforce that understands your current (and future) customer gives companies a distinct competitive advantage. In fact, companies on the DiversityInc Top 50 list of the most diversified have outperformed the overall market by a healthy margin for the past three years. DiversityInc’s Top 50 list has been compiled since 2001. According to Fortune, the Top 50 list is more objective and data-driven than many similar lists and awards. And, each year the business case for inclusion becomes more tangible.
27 women (5.4%) now serve as the CEO of Fortune 500 companies, compared to zero women in these roles 20 years ago. The number of women board members has more than doubled, from 9.6% to 20.5% in the same time period. Credit Suisse Research Institute conducted a global analysis of 2,400 companies which found that organizations with at least one female board member yielded higher return on equity and higher growth in net income than those with no women on the board.
According to AARP, older workers have better attendance records, have better customer service skills, and are more loyal, reliable, and dependable than younger workers.
Companies with a diverse workforce tend to have a competitive advantage in recruiting and retaining employees. Inclusiveness is shown to improve employee retention as two-thirds of job applicants consider diversity important. By blending a variety of talents, skills, and perspectives, diverse companies trend toward greater productivity, engagement, and increased customer service.
People are your greatest asset. A variety of people is your greatest investment.