How to Boost Business Profitability: Improve Diversity Within Your Business
In my earlier blogs I have written about the importance of fairness and compassion in society from a social justice viewpoint. However, there is also a wealth of evidence to show that businesses which have a culture of diversity and inclusiveness outperform businesses which are not diverse. In light of the huge disruption caused by COVID, I am going to highlight why it is even more important than ever before to make sure your business has the best people at all levels if it is to thrive.
Some key facts
BAME hold less than 7% of director positions across FTSE 350 companies (Guardian, December 2019).
3 % of FTSE 100 and 11% of FTSE 250 do not have a policy on board diversity
11 Black partners out of 3000 of the Big 4 Accountancy firms
"The UK's record on boardroom ethnicity is poor. It is unacceptable that talented people are being excluded from succession and leadership simply because companies are failing to put in place appropriate policies on boardroom ethnicity"
Sir John THompson, CEO Financial Reporting Council
Until the unfortunate events of George Floyd, diversity has been a subject which struggled to gain much attention within the business world. Of course there's been the obligatory reports from the Government such as the Parker Report but what impact did it have? And how much attention did UK companies pay to it?
And then, around the same time, the full impact of COVID 19 started to take affect which has impacted every person and business. Six months later, it's clear that there will be lasting and fundamental changes in our lives - in how we work and how businesses operate. Those who thrive will be the ones who can adjust the best to the new environment and who are shrewd enough to grasp new opportunities.
For businesses, this means making sure they have the best people working for them - they will ensure they are using the talent, skills and experience available from a diverse community. Those businesses who continue to operate as before such as those who have a very narrow leadership and management structure devoid of diversity (typically white, male and middle aged!) will struggle against other more open minded and talent based businesses due to better inclusivity and diversity. Consequently, profit, performance and productivity and even reputation are all likely to be better in those diverse businesses.
But why is diversity so important for business success?
"The business case for diversity in the workplace is now overwhelming"
World Economic Forum
1 Employees are much more demanding about the culture of organisations
A new generation of young people is much more aware of their environment and the culture within the workplace. They are much more likely to ask potential employers "What's your policy on divers