Think diversity recruiting is all style and no substance? Think again.
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According to numerous studies, more diverse workforces lead to more profitable, thriving organizations. McKinsey Company reports that women account for a quarter of U.S. GDP, which suggests that a diversified workforce that allows more people to participate in labor leads to economic growth in general. On the organizational side, McKinsey also notes that "companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians" and that "companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians."
"Gone are the days when businesses simply needed to be seen as being diverse to make up the numbers," says Roopesh Panchasra, VP of global executive recruiting at SAP. "Instead, there is an intrinsic desire from the very top of global organizations to be authentic, create harmonious cross-cultures, and create environments that are full of innovation."
Panchasra says that diversity recruiting in today's day and age means more than just employing a multicultural workforce – it means "embracing people of all backgrounds that represent different age groups, notions, ideas, and thinking."
It's this diversity of perspectives that leads to increased innovation, better overall organization performance, and higher levels of company growth. When you bring multiple perspectives to the table, your organization is much less likely to be stymied by obstacles. If everyone thinks the same, a roadblock that stumps one will stump all. However, if your teams represent all sorts of thought processes, then the challenge that leaves one person scratching their head may be a piece of cake to another.
"Diverse opinions are highly likely to encourage better, healthier, and enhanced decision making by drawing on the assortment of experiences," Panchasra says. "The more diverse a team, the greater the chances of analyzing the appropriateness of key decisions as opposed to when a team consists of people with the same or similar backgrounds."
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And it's not just individual departments that can reap the benefits of diverse teams. The C-suite has a lot to gain from diversity recruiting as well.
"At the very top of organizational structures, there is less chance of one-directional decision making if the management teams are made up of decision makers from a wide range of backgrounds who bring different perspectives," Panchasra explains. "This helps when having to make critical business decisions. There is more scrutiny and debate when perspectives are broad, thus reducing the chances of critical errors in judgment being made."
Your Customers Dig Diversity
Diversity doesn't just improve employee performance – it also pleases customers.
"A gender diverse, multicultural, and trained employee base gives companies a strategic advantage," Panchasra says. "Today's customers want to be seen as partnering with companies with the same philosophies and beliefs as them. A partnership with companies that are driving change in this area – who have recognized the measurable and meaningful results that increased gender [and ethnic] diversity brings – is something your customers would be proud to [have]."
Businesses' reputations matter a lot to today's consumers, who often conduct extensive research on companies before purchasing goods or services from them. If you earn your organization a reputation for diversity and inclusion, then you'll strike the right chords with a lot of customers.
Diversity: It's Good for Your Employer Brand, Too
So diversity can make an organization more innovative, boost the bottom line, and attract consumers, but the benefits don't end there. It turns out that diversity is also good for your recruiting efforts.
"If your company embraces diversity in its hiring strategy, the resulting diverse workforce sends a very powerful message to candidates who could be considering your company as their future employer," Panchasra says. "Being seen as an employer that prides itself on inclusivity ... helps enormously when creating a compelling proposition for candidates."
In the age of the war for talent and the consumer candidate, it behooves any company in the market to create and present an employer brand that catches the eyes of the best candidates out there. If a candidate sees that your organization is dedicated to equality, inclusion, innovation, and growth, then there's a good chance that candidate will have a high opinion of your company and want to work for you.
Panchasra says that as long as your employer brand accurately reflects your organization, diversity recruiting can also boost retention rates: "Once the candidate becomes an employee, if the environment allows [employees] to be their true selves, then morale levels tend to stay high, which has a direct impact on retention. If a business is able to retain its best talent for longer, this increases the chances of company growth being maximized."