If companies want to deliver value for their clients they need diverse talent, strategies and opinions. CEO’s need to foster the development of a business that is inclusive of all and reflects the wider society that their service or product exists to serve.
Diversity is power
Teams with a mix of genders, ages, ethnicities and sexual orientation are truly representative of customers.
Research by McKinsey highlights that companies in the bottom quartile both for gender and ethnicity diversity are less likely to achieve above-average financial returns than those companies that promote diversity.
Organizations such as Schneider Electric also recognize that diversity of people, and an environment of inclusion generate greater engagement, performance, and innovation. Schneider Electric will not be able to live up to their statement that “access to energy is a basic human right” if they are not inspired by a range of different people.
Recruitment costs for employers of any sizes can be very costly. The higher the employee turnover rate, the higher the cost. In tech, women are twice as likely to leave as men. Black and Latino tech workers are 3.5 times more likely to quit than white or Asian colleagues. A company with a reputation for being a good place to work for diverse groups will save money and time on recruitment.
The purchasing power of “minority” groups is growing quickly. The UK’s ethnic population is growing by 2.5% a year. If companies do not pay attention to minorities, they will miss significant market opportunities.
Women mean business
For companies to really succeed, women need to be on the C-Suite and in executive positions. Companies that intentionally pursue the appointment of women to their top leadership ranks are better positioned to outperform competitors.
Companies with the highest representation of women on their top management teams generate an average return on equity of 10.1% per year, compared to an average of 7.4% for those without top women leaders.
It is vital that companies set targets for women in leadership to boost their bottom line. HSBC has signed up to the 30% Club CEO Campaign commitment to reach 30% women in senior leadership roles across the bank globally by 2020. Aggregate Industries is another great example of taking this seriously and aim to achieve a minimum 30% gender diversity at all management grades by 2030.
Women have tremendous spending power. 85% of consumer purchases come from women. Additionally, women consume social media at much higher rate than men do. It is vital that women help inspire the companies of tomorrow.