Why Workforce Diversity Matters for Your Business
Have you ever thought of yourself as a role model? Well, you are. When you own one of the country’s 30 million small businesses (a group that accounts for 99.9% of all U.S. businesses and employs 59 million people, according to the SBA), the world is watching you. That’s why it’s so important for entrepreneurs to commit to creating workforce diversity.
Like it or not, our businesses tend to reflect us. So even if you think you’re doing a great job of diversifying your workforce, you may not be doing as well as you think.
Consider a recent survey by Gusto. A whopping 93% of small business owners polled say they actively make an effort to hire diverse employees. Sounds great, right? But look a little closer, and the same study found that a founder’s racial, ethnic, and gender characteristics tend to be the biggest factor in what types of employees they hire.
- While 47% of minority founders say a majority of their employees are racial or ethnic minorities, just 13% of white founders can say the same.
- Only 36% of male founders say women make up more than half their employees. In contrast, 70% of female founders have a workplace that’s more than 50% female.
How workforce diversity can help your business
Workforce diversity isn’t just “nice to have”—it’s actually beneficial to a business’s bottom line. In a 2018 McKinsey study, companies ranking in the top quartile for gender diversity are 21% more likely to have above-average profits than companies that rank in the bottom quartile. Companies ranking in the lowest quartile for both gender and ethnic diversity are 29% more likely to have below-average profits.
When your workforce all looks the same, it not only hurts your profitability and competitiveness, but it also negatively affects your company’s image. I don’t have to tell you how competitive today’s hiring environment is. Don’t you want your business to be seen as a good place for all kinds of people to work?
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Remember, ethnicity and gender aren’t the only factors to consider in creating a diverse workforce. Workplace diversity also means hiring employees with disabilities, employees from different age groups, and employees from different geographical, experiential, and cultural backgrounds. Whether you’re hiring first-generation Americans, seniors looking for part-time work, or mothers returning to the workforce after raising kids, your business can’t help but benefit from all those different perspectives.
5 steps to diversify your workforce
The following hiring tips will help you build a diverse team:
- Look outside traditional sources of job candidates. Make an effort to reach out to people outside your social circle. Share job openings on sites or with organizations that help minority, female, or disabled workers. If you normally only recruit entry-level employees from nearby colleges, why not open it up to …read more
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