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Why diversity in tech is good business

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Posted on 11/12/2020 by Diane Scally

 

There is now substantial evidence that businesses with diverse workforces have a competitive advantage over their non-diverse counterparts. In 2019, McKinsey & Co found that diverse companies outperformed industry norms — ethnically diverse companies by 36% and gender diverse companies by 25%. Despite this, lack of diversity (usually referring to traits such as age, gender, ethnicity, race and sexual orientation) remains an issue for the tech industry in 2020.

Unfortunately, not all companies view diversity as a priority. Many cite the pipeline problem (wider educational and socioeconomic factors that reduce the number of potential diverse candidates). However, companies also struggle to retain diverse employees. Wage gaps and a lack of meaningful cultural change within an organisation contribute to this attrition. Remedying this issue can be seen as costly and time-consuming, but the business case for diversity and inclusion is stronger than ever — here are a few examples of the benefits.

 

Innovation

Boston Consulting Group study reported that companies with more diverse management teams have a significant competitive advantage, with innovation revenue being 19% higher than those with less diverse teams. The large-scale links between diversity and innovation have been backed up by controlled experiments. For example, studies have shown that racially diverse groups outperform non-diverse groups on problem-solving tasks and that people work harder when preparing an argument against someone socially different from themselves (e.g. political ideology). It seems diversity encourages innovation by forcing teams to consider differing perspectives and work hard to justify their opinions.

 

Attracting talent

Firstly, hiring from a more diverse candidate pool increases the number of potential applicants. Therefore, the organisation has a broader group to choose from, which results in a higher average quality of hired talent. Already having a diverse workforce increases the likelihood that people from minorities will feel welcome and apply, so establishing diversity as soon as possible is good for future recruitment.

In addition, diversity is particularly important for the millennial workforce. When surveyed, nearly half of millennials said that they actively seek diversity and inclusion when considering potential employers. They also reported that diversity was key to creating a better workplace and improving morale.

 

Diverse Skills

Hopefully, it’s clear you can’t assume anyone will have specific skills because they belong to a certain group but, on average, there are some differences. For example, the Korn Ferry Hay Group conducted a research study with 55,000 professionals across 90 countries and found that women outperform men on the metrics of inspirational leadership, mentoring, organisational awareness and adaptability. Increasing the diversity within an organisation usually increases the variety of skills as a pleasant side-effect.

 

User insight

The workforce needs to reflect its users. This is particularly important in the tech industry, where a lack of diversity can have serious implications. For example, facial recognition frequently misidentifies people of colour — it’s vital that technology is designed for everyone.

Furthermore, half of all technology users are women and research has found that 85% of all purchasing decisions are driven by women’s choices, making them a large and financially valuable group. Being a member of a minority group doesn’t make someone an expert on designing technologies for that group, but a diverse workforce means that a variety of perspectives will be considered in the design process.

To summarise, the growing consensus is that lack of diversity results in lacklustre innovation, a complacent workforce and technologies that do not work for their user base. While there have been numerous industry initiatives and wider campaigns to raise address this systemic problem, there are still barriers preventing this from translating into reality. However, it’s clear that organisations simply cannot afford to ignore diversity in the tech industry.