It is now generally accepted that diversity in the workplace benefits both businesses and employees. Given its ability to boost creativity and productivity, diversity can also contribute to the well-being of families and even entire economies.
A study by the Boston Consulting Group found that companies with management teams with above-average diversity earned a higher percentage of revenue due to innovation. They reported innovation revenue of 45% compared to companies with below-average levels of diversity among managers, which reported innovation revenue of 26%. Also, the more diverse companies had higher earnings before interest and tax.
In addition, diversity efforts can help organizations to improve their reputation among clients, employees, and prospective workers. If companies neglect to institute and promote inclusive policies, they may find it hard to attract and retain top talent. Investors may even bail as more and more attention is paid to environmental, social, and corporate governance. It is, therefore, not surprising that companies are not only implementing diversity plans and programs but going public with them.
What Are Companies Doing to Make Their Workforce Reflect the Population?
There can be no doubt that some organizations are making strides in becoming more diverse. Well-known global companies such as Johnson & Johnson, Mastercard, EY, Coca-Cola, and Marriott International have embraced diversity in various ways, and smaller companies are building out comprehensive diversity, equity and inclusion programs.
However, the question must be asked: Are organizations as diverse as they claim to be? Are they really hiring people from all backgrounds and creating an environment in which workers at all levels can thrive?
Tracking such progress is difficult since companies aren’t mandated to publicize the makeup of their workforce. Some companies have made tangible efforts to make their workforce more diverse, but in many cases, the COVID-19 pandemic has led to some setbacks. Therefore, there’s still lots of work to be done.
Gender Equality Remains a Concern
Prior to the pandemic, research showed that even though companies with more women in corporate leadership are more profitable, a gender gap remained in most companies. Companies hired fewer women even for entry-level positions, and at each step up the ladder, representation dropped further. This situation was exacerbated by the pandemic.
One study found that the pandemic caused workplace gender equality to regress by several years. American women lost 5.4 million jobs in the first 10 months of the pandemic. In comparison, men lost about one million jobs fewer, leading some people to describe the situation as the “first female recession.”
There’s Still a Long Way to Go with Regard to Racial Diversity
Racial minorities are also underrepresented among top executives and they, along with women, earn less than white males. Human resources consulting company Mercer found that while 64% of entry-level workers are white, 85% of the top executive roles were filled by white people.
U.S. Census data from 2020 show that workplace racial demographics most closely resemble national demographics when it comes to supporting staff or operations level employees. However, Latinx people make up 18.5% of the population and only 10% of support and operations staff.
The data shows that the racial disparity is especially significant at the executive level. Even though 13.4% of the U.S. population is Black, a mere 2% of executives are Black, and only 3% of executives are Latinx.
The Need for Age Diversity Often Goes Unnoticed
The population in many countries is aging rapidly. People are living longer, and many either want to continue working or need to do so for financial reasons. At the same time, birth rates are declining. Still, myths about older workers persist, and diversity efforts often center around race and gender even though there is growing evidence that multigenerational teams are highly beneficial.
Both older and younger workers can learn from each other and bring unique skills to the workplace. Since 2000, the European Union has banned discrimination on the basis of age in occupation and employment. In the United States, the Age Discrimination in Employment Act (ADEA) makes it illegal to discriminate against people who are age 40 or older. Yet, many workers over 50 and even some over 40 face discrimination in hiring, promotion, training, and retention.
Improve Your Organization’s Age Diversity Efforts with Help from WiseForce Advisors
Bias and discrimination on the basis of age can go unnoticed in many companies because misconceptions about older people have become entrenched. Research shows that older people can adapt to today’s technology-driven workplace.
However, it can be hard for organizations to take stock of where they are as it relates to age management and make the necessary changes to ensure they cater to employees of all ages.
If your company needs help with assessing the current situation and then attracting and retaining 50-plus employees, schedule a consultation by emailing info@wiseforceadvisors.com.
