The (Real) Benefits of Diversity in the Workplace

The concept of diversity in the workplace has had such considerable air time in the past several years that one can, at times, become desensitized to the idea and forget the immense value that lies behind what it represents. 

Additionally, “diversity for diversity’s sake” is a phrase that gets parroted from time to time and can confuse and mislead organizations from the real, measurable benefits that manifest when a workplace is truly inclusive. 

To clear up this misconception, we’ll shed some light on the latest professional insights and real statistics that, besides simply being the right thing to do, make a strong case for organizations across all industries to take diversity seriously for the health of their business. 

Diversity and innovation 

One of the more powerful correlations consistently revealed in diversity studies is the link between diversity and overall innovation. 

A study from Boston Consulting Group in which 1,700 companies in eight countries across a variety of industries and company sizes were surveyed found a “strong and statistically significant correlation between the diversity of management teams and overall innovation.”

Companies that reported above-average diversity among their management teams reported innovation revenue 19% higher than companies with below-average diversity (45% of total revenue versus 26%). The study defines “innovation revenue” as revenue from products and services launched in the past three years. 

This finding makes a strong case that diversity better situates companies to adapt quickly in response to ever-changing customer demands—and in today’s increasingly dynamic business environment, this quality matters more than ever before. 

Diversity and performance

A study from McKinsey of companies across multiple industries and countries provides strong evidence that companies with diverse executive boards enjoy significantly higher earnings and returns on equity. 

In findings that they describe as “startlingly consistent,” Mckinsey’s research showed that companies ranking in the top quartile of executive-board diversity had ROEs 53% higher (on average) than companies who placed in the bottom quartile. Their EBIT margins were also 14% higher. 

While much of the evidence in favor of diversity’s benefits in past years has been anecdotal, studies like these help dispel any sort of snake oil associations and prove diversity’s value in purely business terms. 

Diversity and profits 

If, after reading about diversity’s close correlation to performance and innovation, you assumed diversity would also be correlated to profits, you’d be right. 

Another report from McKinsey on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean. 

This correlation extends beyond just ethnic and racial lines as well. The study also found that companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians. 

This is just one example of many studies conducted in recent years that repeatedly reach similar conclusions. 

Besides intuitively striving towards a more diverse and inclusive work environment, organizations are continually faced with more incentives as the professional body of literature supporting diversity’s contribution to a variety of key business metrics steadily grows year after year. 

Concepts like innovation, engagement, and morale may seem amorphous and difficult to quantify, but the hard, measurable financial benefits attributed to healthier diversity throughout an organization’s management structure is plain and clear. 

At Huffman Associates, we’ve specialized in helping great organizations across multiple industries find the great diversity candidates their business needs to thrive. Get in touch with us today to learn how we can do it for you.


If You Think It’s Expensive to Hire A Professional, Wait Until You Hire An Amateur

When it comes to identifying, attracting, and hiring top executive-level talent for hard-to-fill positions, you can choose one of two routes—(1.) hire a professional and get professional results or (2.) hire an amateur because you think you’re getting a deal.

The price is always paid, but the results can vary greatly.

LinkedIn research indicates that only 18% of professionals are actively seeking new opportunities and applying to job postings. These candidates are unhappy with their situation— unemployed, underappreciated, lacking growth prospects, or feeling like they deserve more when, in fact, they’re exactly where they’re supposed to be. These are the candidates your internal HR department screens when they apply to a job posting on the company website or LinkedIn.

The same research says that 20% of professionals are super-passive, meaning they aren’t interested in opportunities no matter the approach.

That means 62% of professionals are open to hearing about a new opportunity but are not actively looking at or submitting resumes to job postings. These top performers are too busy crushing it to look for and apply for a new role.

This pool of candidates should be at the top of your list when looking to expand your team. They’re the talent you want when searching for the best talent available.

Why do you need these candidates?

  • They’re highly qualified. Day in and day out, they are excelling in their current roles and focused on what needs to be done for their current employers.
  • They’re driven. No time to apply to jobs online, they have tasks that need to get done, sales targets to beat, and processes to improve.
  • They aren’t playing games. They have a job, they don’t need you, and they’re not desperate to leave their employer, or desperately trying to gain employment. If someone they trust calls them, they’ll listen.
  • They think strategically. If the role, company, leadership, and culture make sense, they’ll move. But, it needs to be right. They aren’t looking for the first offer they get; they’re looking for the RIGHT offer.

“Acquiring the right talent is the most important key to growth. Hiring was – and still is – the most important thing we do.

-Marc Bennioff, founder and Co-CEO of Salesforce

Here’s the catch: 

You need a recruiter who can target and actively recruit from within the 62% if you want to land those top performers.

Recruiters who have built relationships with these candidates and their peers have what it takes to deliver them to you.

You don’t know what you’re missing if you don’t open your eyes to the full market of talent.

A good executive search partner can weed out the amateurs from the professionals, and ensure you hire the best of the best.

Demand the best.


Reviewing Leadership as Part of Your Strategic Plan

Everyone knows how crucial having the right senior leadership and management team is to an organization’s health, success, and future. 

Unfortunately, at many firms, executive leadership (CEO, BOD) fails to include a review of their senior leadership and management team (their single most important asset) annually as part of their strategic planning process.

If you believe that your senior leadership and management team play the leading role in your firm’s success, defining your culture and enabling future growth, then having an annual review would seem to be in order.  What better time than at the time of your annual strategic planning process?  

What are the chances of the firm meeting or exceeding its goals if there are deficiencies in management structure or leadership in finance, operations, technology or any other area? What areas of your firm are not important to achieving the company goals?  Is there any area that does not affect another if the function or department needs a leadership upgrade?

As a major part of your management team’s responsibilities, building high-performing teams, managing change, building bench strength, succession planning and inspiring employee engagement are always critical aspects that senior executives are expected to carry out. 

What’s the Risk If You Don’t?

For as much good as a great leader can do, an underperforming leader can be just as damaging to a company and its mission.  As a company grows it is logical that some managers will have their ability to manage span of control and, as an expanding function, get ahead of their ability to out-perform on a regular basis.  

It is common for firms to upgrade when it becomes obvious that a manager is struggling, but many times that occurs only when there is an operational break, a negative audit finding, or worse.

In order to catch potential deficiencies in senior leadership before there are real consequences for an organization, executive leadership should firmly establish a comprehensive review at a regular interval. Typically, annually is considered to be best practice because if your leadership review coincides with your overall annual strategic review process, you can then seamlessly add any new hires to your annual budget and planning timeline. 

Once the review has been conducted, leadership is then best positioned to make as accurate an evaluation of their management structure as possible to identify whether they need to expand, collapse, maintain, or reorganize.  

Without a regular, reliable means of reviewing your senior leadership, organizations can be inhibiting their potential and exposing themselves to an unnecessary amount of risk. 

Huffman Associates

If you find you’re in need of building out or upgrading your senior leadership team, partner with the proven executive search consultants at Huffman Associates. Our team of veteran recruiters specializes in management and executive-level recruitment across multiple practice areas. Get in touch with us today to learn how our extensive network of proven candidates and 50 years of experience in search consultancy can help you overcome whatever hiring challenge your organization is facing.

Huffman Associates LLC