Diversity seen as integral to business performance

Diversity is believed to be important to business performance by a majority of executives, with around 62% of businesses setting objectives to support cultural change in their organisations. Companies that value diversity meanwhile tend to be much more interested in leveraging developments in managing the issue from the wider changes in the best practice, according to a new study.

Over the past decade particularly, diversity has become an increasingly prominent issue in the business community, as the societal advances pushed through by movements for social change increasingly impact on business practice, ethically and economically speaking. Various studies now highlight a business case for improved gender diversity, while for the market as a whole, change in this regard could see $12 trillion added to the global economy. Many businesses and consulting firms have built targets into their corporate plans to boost diversity in their organisations as a result.

A new study from executive search firm Stanton Chase, titled ‘2017 Global Consumer Products and Services Survey’, surveyed 600 participants worldwide , of which 300 were executive or board level, about their current thoughts pertaining to diversity across their businesses.

Diversity was found to be important for business success over the coming 12 months, having been revealed by various studies to be ‘best practice’, with 61% of respondents here stating it was important to their plans. 28% were neutral to the proposition, while just 11% said it is not important.

In terms of responsibility for diversity efforts at the businesses, the board was found to most often be seen as the leader of diversity as a business objective. Human resources followed, at 20% of businesses surveyed, while the CEO came in third spot, cited by 11% of respondents as the driver of the business objective. 36%, however, said there was no area in the business responsible for the business objective.

Respondents were further asked to identify the major focus of diversity related initiatives at their organisation. The recruitment process was found to be the primary driver at the largest cohort of respondents’ organisations, at 46%. Human resource processes followed, cited by 34% of respondents.

The firm did note some discrepancies however, between companies that placed high value in diversity and those that lacked such value. The difference appears to be that those that value diversity were much more willing to take aboard new and developing practices for cultural change in organisations, compared to those that are playing lip-service to diversity, which tend to utilise methods that have been shown to fail in the past.

The study also identified a correlation between companies that place a high value on diversity and a number of key leadership related outcomes and trends. For instance, for organisation with a high placement of value on diversity, 84% said that they will utilise an executive search within a year, compared to 63% at companies with a low value placed on diversity. In addition, companies that place a high value on diversity were much more satisfied with the innovation displayed by leadership, at 35% of the group vs. 21% companies with a low value placed on diversity.

Pay disparity remains a major hurdle for recruiting more diverse talent however. Female workers for example remain disadvantaged, with wage disparity in the UK standing at £85 billion in lost wages. Individual women are deprived an average of £6,100 per year by gendered salaries.