When people talk about diversity in the workplace, it often comes with general acknowledgement that it needs improvement across the board. Office managers and administrators are well aware of the social benefits and it’s been proven many times over that greater diversity within a company increases the likelihood of better financial returns. In recent years, this knowledge coupled with the tangible examples has encouraged more companies to prioritize diversity and inclusion policies.
However, for many companies, achieving this balance of diversity has proven to be more difficult than expected for managers and administrators. In response many companies have put an emphasis on creating a more inclusive workplace through specific Diversity and Inclusion (D&I) strategies, rather than addressing the lack of diversity retroactively.
To better understand the state of workplace diversity and the different types we encounter in the professional world, Kisi has completed a comprehensive study of four major elements of diversity, including:
3. Sexual Orientation
4. Disabilities, Cognitive Disabilities, and Age
Some key takeaways revealed in the study include:
- Above-average diversity teams reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity.
- For every 100 men promoted and hired to manager, only 72 women are promoted and hired.
- LGBT-friendly workplaces lead to improved health, increased job satisfaction, better relationships with co-workers and supervisors, and greater work commitment among LGBT workers.
- According to AARP, 64 percent of workers have witnessed or experienced age discrimination.
- High-performance organizations are 37% more likely to hire people with a cognitive disability because they are good talent matches for open positions.
While some findings indicate not enough progress has been made, it is important to understand what is happening in the workplace to see where we can move forward and the benefits of being more inclusive. Here are our findings for four of the major categories of diversity that we’ve identified in the workplace.
Often confused in general conversation, ethnicity and race are factors that are constantly being weighed during the hiring process, despite people’s best efforts to remain unbiased. Ethnicity is based on the idea of a shared geographical background, cultural, or history, whereas racial backgrounds are seen more as social constructs, rather than a biologically-defining category.
A 2015 McKinsey study of more than 300 public companies found that “those in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above national industry medians.”
Not only are ethnically diverse teams more profitable, but there is a significant correlation between the diversity of the leadership and overall innovation output of the organization. Companies that stated they had above-average diversity on their management teams also had higher levels of innovation revenue, or revenue earned from products or services launched within the last three years. The above-average diverse teams reported 45% of their total revenue came from innovation, whereas companies with below-average diversity scores only reported 26% of their revenue coming from innovation. More inclusive companies also prove to be able to evolve and adapt to consumers’ demands more efficiently.
When looking at inclusion in the scientific field, the numbers tell a similar story. A recent study showed that scientists might be more likely to collaborate with people who are the same ethnicity as them. However, when an ethnically-diverse group of scientists collaborated on the same paper, the scientific impact was 10.63% higher for the papers, and 47.67% for the scientists, reinforcing the affect that greater inclusion has, particularly in STEM industries and organizations.
Despite clear evidence that diverse companies tend to be more profitable and innovative, corporate America still lags behind on inclusion of minority groups, particularly women, in leadership positions. A study of more than 460 companies employing 19.6 million people, found that white men and women represent 87% of C-suite positions. Men of color represented 9% of C-suite positions and women of color just 4%. This lack of diversity starts from the bottom, as men and women of color are hired for just 33% of entry-level positions.
The disparity between these two groups continues to widen as employees move up the corporate ladder. People of color are less likely to be promoted to managers than their white counterparts.
Because these disparities start early within the corporate ladder, it has a significant impact down the line. Because there are fewer women and men of color to be promoted to higher positions from within, companies are more likely to turn to an outside hire or rely more heavily on executive level recruiters for high level positions. Our findings show that, whether it is subconscious bias or simply a lack of awareness of inequality, gaps in company performance, innovation and culture directly correlate to the amount of ethnic and racial representation.
While gender equality has been an issue in the average workplace for decades, little progress has been made towards greater balance in the US. Currently, only 33 leaders of Fortune 500 companies are women, and this number is at an all-time high. In other words: Men represent 93.4% of all Fortune 500 CEOs.
Similar to the disparity in ethnic and racial diversity, the problem with gender equality often starts at entry and mid-level hiring processes. For women climbing up the corporate ladder to a leadership position is often halted early in favor of their male counterparts. According to a survey by McKinsey, for every 100 men promoted to a manager position, only 79 women received that same promotion.
Decades of inequality and under-representation have had a long-term impact on the amount of women in leadership positions and studies have shown that women, particularly women of color, are more likely to be on the receiving end of microaggressions in the workplace:
However more global corporations are slowly but surely making efforts to rectify gender inequality. Most notably, in 2015, one of the largest multi-national tech businesses recently performed a company-wide salary audit to discover how deeply gender inequality had seeped into operations.
Salesforce has traditionally been more progressive and inclusive than most tech companies, however CEO Marc Benioff, didn’t realize the extent of gender equality in his company until he was approached by two female executives. They confronted him about the salary discrepancies they had noticed between men and women in the same positions. After agreeing to a massive investigation, Benioff was embarrassed to admit that, despite his best efforts to include more women in leadership roles and in important executive meetings, gender inequality still proved to be an insidious problem in the pay structure of the company. In response, Benioff made an unprecedented decision for a company that size; he closed the pay gap across the board.
Holding equality as a value is not just a matter of fairness or doing the right thing. Nor is it about PR or “optics” or even my own conscience. It’s a crucial part of building a good business, plain and simple.
Marc Benioff - CEO of Salesforce (Wired)
Like Salesforce, other companies have tried to eliminate this problem. In 2015, women represented 17% of C-suite positions. In 2019, they represent 21%. While some progress has been made at the top leadership positions, the numbers are slowly growing at the bottom, with just a one percent increase in women in manager positions from 2015 to 2019.
The McKinsey study also found that 87% of companies are committed to gender diversity, a major increase from past years. Employee commitment to achieving gender diversity, especially among men, has also grown stronger in recent years.
While companies might say they are more committed than ever to gender diversity,
employees don’t often see the problems resolved at the bottom of the ladder. Only half of the employees surveyed believe that gender diversity is a top priority within their company. Unfortunately, that number hasn’t increased within the last five years despite the fact that companies that are committed to gender diversity tend to have happier workers and better employee retention rates.
Incorporating more women into the workplace doesn’t just serve the purpose of being more inclusive; companies focusing on promoting women tend to be more profitable. Peterson Institute for International Economics completed a study of more than 20,000 public traded companies and found that the number of women in executive positions correlated with increased rates of revenue and profits.
Countless studies have found that, despite recent wins in the Supreme Court, many LGBTQ workers still experience discrimination in the workplace. A study by Out Now Consulting showed more than 40% of lesbian, gay, and bisexual individuals, and 90% of transgender people had experienced discrimination, harassment, or mistreatment by their coworkers or company.
This mistreatment isn’t just detrimental to the LGBTQ community, but it can also have a negative effect on the company’s bottom line. The LGBTQ buying power in the US marketplace has grown to approximately $800 billion.
Adding to the strength of the LGBTQ community are “allies,” people who aren’t members of the LGBTQ community, but advocate for their rights. One study found that 72% of ally job hunters would prefer to work for an LGBTQ-friendly employer over a less inclusive one.
The LGBTQ community is large and encompasses people from all races, genders, backgrounds, and experiences. Because of this, it can be challenging for companies to understand how to teach employees to be inclusive. Currently, no federal laws are in place to protect LGBTQ employees from employment discrimination. Some companies, however, have decided to enact policies on their own. 96% of the top 50 Fortune 500 companies include sexual orientation in their non-discrimination policies, and 70% include gender identity.
The majority of the top Fortune 500 companies also provide benefits to the same-sex domestic partners of employees. While this might seem like a financial burden to the employers, they end up reaping benefits in multiple ways. Most of these companies stated that there was a positive impact on their businesses after these policies were implemented.
Studies have shown that the US economy would save $9 billion each year if organizations had more effective diversity and inclusion policies implemented for LGBTQ employees. Businesses who have more inclusive policies find that the organization outcomes approve, as well as lower health insurance costs because the overall health of their employees has improved.
Some other financial benefits companies experience might include recruitment and retention. As previously mentioned, allies were more likely to work for an LGBTQ-friendly company, helping organizations to attract the brightest talent. Because of these inclusive policies, employees tended to feel more valued and comfortable at work, leading to higher levels of productivity. In addition, because of the diversified workforce, employees produce more ideas and innovations.
Not only does having an anti-discrimination policy help the company's bottom line, but it also helps improve the lives of the workforce. LGBTQ-friendly workplaces also lead to better relationships with coworkers and supervisors, greater work commitment, improved health, and increased job satisfaction for LGBTQ workers.
Other: Disabilities, Cognitive Disabilities, and Age
Perhaps the most underrepresented social group in the global workforce, people with disabilities, cognitive disabilities, and ages tend to be overlooked as assets than can add positively to a company.
As the average age expectancy continues to increase, the average worker isn’t retiring as early as they used to. According to the Pew Research Council, about 20% of people over the age of 65 worked in 2016. By the end of 2019, over 40% of people over the age of 55 will still be working. That means that more than 25% of the US labor force will be people over the age of 55.
In some fields, particularly in tech, the correlation between youth and innovation is heavily emphasized. Because of this, a survey of tech workers found that 43% feared losing their job due to their age. Even more troublesome, 18% said that they worry about this happening all the time. And according to the AARP, 64% of workers have either experienced or witnessed age discrimination.
The workers surveyed by the AARP showed that age discrimination can go both ways, with half saying that they were let go because they were deemed too old, and 45% saying it was because they were too young. Younger employees might be passed over for a promotion, despite having the work ethic and skills to handle the added responsibility, whereas older employees might not get the same career development opportunities offered to younger employees like education coursework, reimbursement for continuing education or industry conference attendance.
Even though 85% of tech workers believe that their employers consider diversity to be important, age remains an issue. Excluding candidates based solely on their age might be limiting companies to their expertise, maturity, and experience. 87% of the tech employees said that diversity definitely or possibly had a positive impact on performance, which might include more customers, sales revenue, and higher profits. However, despite the obvious benefits, only 40% of their respondents consider their employees to be very diverse.
Another group that is underrepresented in the workplace is people with intellectual and developmental disorders (IDD). Workers with IDD often face problems even getting hired because of perceived misconceptions and concerns. According to a study by the Institute for Corporate Productivity, the preconceived concerns regarding hiring people with IDD average 42% higher than the actual challenges that occurred once they were hired.
Some major concerns include a lack of positions that were a good fit, the need for extra supervision, or productivity and performance issues. However, this discrimination often proved to be unfounded when the employee with IDD began working. In fact, 75% or more of employers said that in general, employees with IDD were dependable, motivated, and integrated well with co-workers.
People with disabilities have also found it difficult to be fully represented in the workforce. In D&I discussions and policies, it can be challenging for some companies to create a policy that works for everyone. According to the survey, 85% of adults with developmental disabilities do not have a paying job in the community. Currently, more than 50 million people in the US have a disability and have nearly $200 billion in discretionary spending power. By being more inclusive, companies might find that they are attracting a new workforce and client base.
Thirty-seven percent of high-performance organizations surveyed said they are more likely to hire a person with IDD because they tend to have the necessary skills for office work, facility maintenance, and food preparation, showing a stronger trend towards hiring workers with IDD and other disabilities
Other surveys found that hiring workers with IDD is also better for their companies in general. Among employees with IDD, work attendance is higher, the turnover rate is low, and productivity and initiative are high. By adding to the diversity of the office and hiring workers with IDD, companies can add dedicated workers to their team, keeping the company running smoothly.
Diversity in the workplace helps to create an inclusive environment for everyone to thrive and grow. By exploring how companies can become more diverse, it can help improve the employee experience and lead to increased profits businesses of all kinds.
About Kisi: Founded in 2012 in Brooklyn, Kisi is a cloud-based keyless access control system providing mobile-first security solutions. Businesses of every size and industry use Kisi's hardware and software to secure their spaces, streamline operations and build a vibrant office culture.
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