International Women’s Day 2023: Why a diverse workforce is the key to success
Connect and support peopleWith its origins in the suffragette movement, International Women’s Day has long had ties to the professional world. However, in recent years, it has become the victim of purplewashing.
Externally, companies leverage the day to proudly celebrate their female staff, proclaiming the benefits of having a diverse workforce. But internally, many foster cultures and conditions that are less than ideal for 50% of the world’s population.
While this is disappointing, it is not surprizing. In general, beyond IWD and this particular dichotomy, it is not uncommon to see companies flaunt a diversity statement on their website, but struggle to articulate it meaningfully to their employees. Many are left asking:
- What is diversity?
- How are women and other minorities treated in the workplace?
- Aside from social clout, what can businesses gain from creating a diverse work environment?
[By Jennifer Reinhardt]
What Is Diversity?
Diversity as a concept means that you try to consciously include and involve many different people in your company. “Different” refers to the various dimensions that one person can be dissimilar from another: This includes traits that people are born with or that are inherent to their personality, e.g., age, ethnicity and nationality, gender, sexual orientation, social background, religion, as well as physical and mental abilities.
These characteristics are those that most often come to mind when people hear the word diversity. There are, however, other dimensions to the concept of diversity that are more related to an employee’s life experiences or are acquired qualities. These include but are not limited to family status, income, place of residence, jobs, or hobbies.
Examining Minorities in the Workplace
Research by McKinsey, carried out in 15 countries and encompassing 1,000 companies, showed that in 2019 the percentage of women present in executive teams was only 15% (2017, the percentage was 14%). In fact, across the surveyed companies, more than one third of executive teams included no women. These numbers were consistent regardless of industry and country the researchers questioned.
The situation is similar when it comes to ethnic minorities: In 2019, they represented only 14% of all executive team members (compared to 12% in 2017).
For Germany, a survey by Ernst&Young among 600 employees – both from organizations that did already commit themselves to diversity measures and from organizations that did not yet specifically do so – showed that diversity management in German companies is a process that has only just begun. Many businesses have not yet taken any steps towards creating a diverse environment.
Why Is a Diverse Workforce So Important?
Diverse teams perform better
Two heads are better than one – and when the two or more heads who are trying to solve a problem are from different cultures, they tend to be more creative. Ensuring that your company is made up of teams with members from all over the world, therefore, is a great way of helping your employees reach their full potential.
Gender is also a big factor when it comes to group work. Teams that consist of people of different genders perform better – when you add women to teams that were made up of only men before, average turnover rates are reduced, the team’s relational skills and organizational citizenship behaviors are strengthened and willingness for shared leadership is boosted.
The reason for this is simple: The more diverse the people that collaborate to find a solution are, the more information, experiences, and perspectives are included on their way to find it. This naturally sparks creativity and fosters ways of thinking outside the box.
Diverse companies improve recruiting and retention of employees
Companies only want the best performers to work for them – and potential hires look at businesses more often from the perspective of how diverse their workforce is. According to Glassdoor, 76% of U.S. employees and prospective employees say that diversity is a key factor for them when they consider an employer or job offer. 32% of them would not even think of applying to a company where diversity is notably absent.
And more alarmingly for businesses: 39% of workers said that there is a possibility that they would leave their current job if they found an employer who offered a more inclusive environment.
Diverse companies improve business success and financial performance
The above-mentioned study by McKinsey surveyed 1000 companies to take a closer look at how gender-diverse, executive teams are. The results make a strong case for hiring diverse employees, as companies with a high level of gender diversity among their leadership team were 25% more likely to be profitable than average.
Looking at ethnic and cultural diversity, this number is as high as 36%. This is supported by a Boston Consulting Group study of 171 German, Swiss, and Austrian companies. It also showed that the revenue an organization gets from innovative products and services is directly linked to how diverse their executive team is – that is if it includes men and women, or people from other cultures, industries, or companies. When members of a company’s executive team are part of the LGBT community, the company tends to perform better, too.
Interestingly, investors pay close attention to high gender diversity and reward companies that showcase this. When tech and finance companies report high percentages of women in their workforce, stock prices rise, according to research from the Kellogg School of Management.
How Can we Champion Diversity?
As we’ve seen, having employees with diverse backgrounds can help make companies more innovative and successful. And many businesses are already trying to improve their practices because they know that diversity benefits them. At TeamViewer, our workforce is comprised of people from over 70 countries, diversity is one of our core values as well as a lived cultural experience at our offices.
But we’re not stopping there. We are still working towards even more ambitious diversity goals: At the end of 2020, women made up 34% of our global workforce, and 29% of management positions were filled with female employees. But we want this percentage to be even higher, so we’re aiming to have 33% of women in those management positions by 2024.