There was a time when the term “diversity” rarely came up in corporate conference rooms or business meetings. But in recent years, and particularly after the global spread of the Black Lives Matter movement in 2020, it has been vaulted onto the center stage of dialogue in these settings.

But for clarity, “diversity” does not include solely race and skin color. According to a Forbes article published in November 2021, diversity and inclusion comprise the complete gamut of “gender, religious and political beliefs, sexual orientation, cultures, and even disability.”

And all signs are pointing toward its continued relevance as a topic of conversation in the business world for years to come. But this precedent was already set a while back. In 2014, the prestigious McKinsey & Company already reported that in the US, the top-quartile companies for racial and ethnic diversity were 35 percent more likely to have financial returns above their national industry medians, while companies in the top quartile for gender diversity were 15 percent more likely.

And adding to that, just last year, Forbes alluded to a citation on the subject by the World Economic Forum, which stated, “A Boston Consulting Group study found that companies with more diverse management teams have 19% higher revenues due to innovation.”

Thus, as companies around the world continue to walk the tightrope between the aftermath of the pandemic and the financial throes of the war in Ukraine, hiring committees, management, and decision-makers would be wise to contemplate the tried-and-tested merits of diversity on the work floor.

But what are the benefits beyond the financial potential?

Diversity provides companies with different perspectives, and in many cases, this provides a better way of solving problems. Also, having a diverse staff on hand provides a better understanding of customer demographics, which, in turn, puts companies in a position to better serve customers, enhance the customer experience, and expand their client base. Not to mention, it also gives a significant boost to innovation — members of a diverse staff tend to go above and beyond to bring value to the team, a key driver of innovation.

Still not convinced? Then just look at the cases of Kaiser Permanente, Johnson & Johnson, and Sodexo. These globally-renowned companies are among the shining paragons of diversity excellence in the corporate world. People of color make up 60% of the staff at Kaiser Permanente, a healthcare provider. And 75% of its workforce is female, as is half of the executive team. Meanwhile, Johnson & Johnson is a founding member of the Unstereotype Alliance, which seeks to eliminate gender gaps in advertising, while women make up 37% of Sodexo’s executive committee and 60% of its board of directors.

Europe still lags behind

But despite these promising examples, these companies are still the exception, not the rule. There is still a long way to go when it comes to diversity and inclusion in business. The recent developments in this field in Europe are unfortunately a telling indication.

In late 2021, PricewaterhouseCoopers (PwC) published a report on the state of diversity and inclusion, which included the results of a survey conducted at more than 970 corporations in 26 industries across 19 countries in Europe. And of all the surveyed organizations, only 2% had a diversity and inclusion program that had reached a stage in which the companies were executing real-world results that saw employees experience the positive results of the program. This means that equal opportunities are ensured within those companies, no matter of race, gender, sexual orientation, nationality, and/or religion.

But diversity and inclusion in business is not solely an American or European discussion. The issue remains a contentious talking point across all avenues of society all around the world. Take the cases of Brazil, South Africa, and the Philippines, for example.

Brazil

In Brazil — which has the third-largest economy in the Americas and the tenth-largest in the world — there is a general belief that the South American country is overflowing with meritocracy, neutrality, gender blindness, racial blindness, and racial democracy.

In reality, it is a country where 90% of CEOs are white men, and women make up only 14% of boards of directors. And statistics for indigenous peoples in organizational leadership don’t even exist.

However, Brazil was not immune to the global wave of public outrage that followed the murder of George Floyd in the US in 2020. The public outpouring there was heightened by the murder of João Alberto Freitas, a 40-year-old black man who was beaten to death that very same year by three security guards at a Carrefour unit in the Passo d’Areia neighborhood of Porto Alegre, a city with a predominantly white population. A further aggravating factor was that the murder occurred on the very eve of Black Awareness Day, an annual celebration of Brazil’s black community that is held on November 20.

The massive public reaction forced many Brazilian leaders of industry to take notice. Many companies have since rolled out diversity and inclusion plans for their workforce in the coming years. Now it remains to be seen if these plans and policies will stand the test of time and trends.

South Africa

Meanwhile, workplace diversity is mandated by law in South Africa — a multiracial, multicultural, and multireligious nation with 11 official languages — and many businesses have adopted a largely compliance-driven approach.

But, in practice, workplace diversity has progressed at a slow rate. In a 2016/2017 nationwide survey of 26.255 South African companies, only 11% of the senior management were found to be black African, whereas around 62% were white African. Additionally, just 19.1% of directors and 29.5% of executive managers in the 277 Johannesburg Stock Exchange (JSE) listed companies in 2017 were female. Also, there were no female directors at 45 of the 277 listed companies. 

The Philippines

And in the Philippines, although the country continues to move in the right direction, ranking 2nd in the Asia Pacific in closing the gender gap, income and wage gaps continue to persist. Women tend to still earn less even if they hold similar positions as men, according to the 2020 Global Gender Gap Report by the World Economic Forum (WEF).

Main takeaway

While it is true that there have been numerous advancements in the area of workplace diversity, there is still a long way to go before it becomes a way of life that doesn’t even require discussion. The world’s tech and digital companies should also take note. Despite several corporate commitments to diversity, particularly from “Big Tech” companies, the diversity numbers in the tech industry have only modestly increased over time. More work needs to be done to increase diversity in tech, as was previously highlighted here.

And while digitalization is usually acknowledged to be of high value, as this April 2022 Forbes article demonstrates, it takes diverse perspectives to get people on board with the available options for innovation through digitalization.

At the end of the day, the truth is that a company’s most valuable assets are neither its technology nor the services it offers, regardless of the era we live in or the industry we work in. It’s the people that constitute its workforce. And as this article has shown, it greatly benefits companies to ensure that those people reflect modern society.

As things stand, society will continue to remind them of this long after it is trendy for them to listen.