Why Diversity in Hiring is Good for Business

Businesses with a diverse team can better serve their customers. These 3 tips can help you to effect change via diversity in hiring.
August 10, 2015

Diversity and equality in business have lately been getting the increased attention they deserve. Times are changing, and businesses that haven't yet adapted can no longer afford to ignore their failure to hire more diverse teams. Not only can it be unethical, there’s also a legitimate business case for changing their ways. 

For one thing, traditionally underrepresented groups now represent a vast majority of consumers in America with increasing purchasing power. A more diverse team may enhance your ability to do customer outreach, which may expand your market share. Keeping a diverse team that can see things from many different perspectives could help your business remain accessible.

Meanwhile, younger consumers—one of the most desirable market demographics—are speaking out more about discrimination. Case in point: A 2009 Pew Center study confirms that 44 percent of millennials agree that society as a whole should do everything it can to improve the position of minorities, compared to 25 to 30 percent in other generations. Millennials also prioritize spending wherever possible with socially responsible businesses. A company that makes a good faith effort to increase diversity on its teams may appeal more to millennial workers and customers.

Finally, when companies have a breadth of perspectives from which to view a problem, they’re more likely to come up with an efficient solution, and the benefits are especially compelling in the area of gender diversity. A 2009 recent study found that companies could increase revenue by 41 percent by shifting to a team with an even gender split. Attracting and retaining more women requires rethinking how to recruit and support diversity in the workplace.

How to Increase Workplace Diversity

Clearly, diversity can add value to business. So what should we as business owners do to make our teams more heterogeneous? The answer lies in focusing on both recruitment and retention. Businesses should be willing to change their very culture in order to make new hires from all backgrounds want to stay.

Create policies that encourage diversity in hiring. Psychologically, people often tend to favor others who are similar to themselves in beliefs, attitudes and especially background. This means if you or the person in charge of hiring don't consciously choose policies that increase diversity, you may unconsciously create a homogeneous team.

If you're a smaller company (as we are at Hubstaff) and you don't yet have a human resources department, consider making changes to your hiring process to attract more diverse candidates. You could require a 50/50 mix of men and women in a candidate slate before proceeding to interviews, or institute recruiting referral programs for women and minorities. At Hubstaff, we've been working on adding more women to our team since October of last year.

Make political correctness a priority. It should be clear to everyone in your organization that there will be consequences for being disrespectful of another person’s gender, race, age or sexual orientation. Consider making diversity training mandatory for your employees. Even implicit biases can create a pernicious, toxic environment for employees from minority groups. It should go without saying, but you have to explicitly enforce basic standards of decent behavior if you want to retain diverse talent and, ideally, spark innovation.

At Hubstaff, we have a multicultural team from around the world, and we make it clear that only the utmost standards of respect are appropriate. This empowers our staff to voice their opinions and gives us the full value of their insights.

Use upward feedback to improve retention.  If inappropriate conduct or comments take place, members of a minority group can face a strong disincentive to publicly complain. That’s because few people want to be seen as complainers who spend time monitoring coworkers’ behavior instead of getting their job done. Unfortunately, this means that HR and managers might not always hear about the instances of passive discrimination in their office, and consequently not perceive the problem in time before women and minorities decide to leave. 

Instituting a system of anonymous feedback is a great start in that direction. Feedback can be anonymous but also public in certain situations, like a comment board that everyone reviews at company-wide meetings. Managers may want to ask for reverse mentoring and upward feedback. Often, employees have innovative ideas on how to promote diversity and inclusion in the workplace that managers might not have otherwise considered.

Businesses can no longer afford to keep building teams that bear little resemblance to the users they serve. The companies which realize that diversity is no longer a buzzword but an actual business necessity will be the ones best positioned to adapt to a changing market.

Dave Nevogt is a co-founder of Hubstaff, a time tracking software for remote teams, and a member of Young Entrepreneur Council (YEC).

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