#Diversity
Having diverse people and diverse perspectives in a team is indisputably a good thing for any business. Research shows that there is a direct correlation between gender, ethnic and cultural diversity and profitability in an organisation. What’s more, diversity leads to innovation – a key ingredient for successful and sustainable technology businesses. Yet remarkably, the technology sector continues to lag behind others in diversity polls across the US and Europe. So is having a diverse team really all it’s cracked up to be?
We take a look at the arguments for diversity in tech and some hacks you can apply to diversify your team.
Diversity isn’t good for business – it’s great for business
Let’s start by taking a high-level look at why diversity is good for business. A number of recent studies present evidence that diversity is good for financial performance, customer acquisition, and talent attraction amongst other things. Here’s a snapshot:
Companies with diverse teams are more likely to perform well financially.
2018 research by McKinsey found that diversity positively impacts on company financial performance. The research found that gender diverse teams are 21% more likely to experience above-average profitability, and ethnically and culturally diverse teams are 33% more likely to outperform those companies with less diversity.
Diverse teams have a better understanding of their customers.
LinkedIn found that 49% of companies focus on culture in order to better represent and understand their customers.
The diversity of an organisation can influence customer purchasing decisions.
In 2017, Deloitte found that in the preceding 12 months, up to one-half of customers’ purchasing decisions had been influenced by an organisation’s support for equality.
Diversity is important for job seekers.
According to Glassdoor, 67% of active and passive job seekers said that a diverse workforce is an important factor when evaluating companies and job offers. What’s more, is your competitors are focusing on diversity. LinkedIn found that 62% of companies are focusing on diversity in order to attract talent and improve company performance.
So what exactly does a diverse team look like?
Having a diverse team starts with having lots of different perspectives and backgrounds in the room. In recent years, most companies have been focusing the majority of their diversity efforts on:
- gender
- race and ethnicity/culture
Recent commentators have highlighted the danger of defining diversity too narrowly. Other areas to focus on include:
- Age
- Education
- Disability
- Religion
- Socio-economic background
- Nationality
- Geography
EY has highlighted four disruptors to help companies go beyond gender and cultural background and leverage the competitive advantages that diversity brings:
Cognitive diversity.
Loosely defined as the inclusion of people who have different styles of problem-solving, cognitive diversity can arm your team with unique perspectives. Teams need a strong culture of trust in order to unlock the potential of cognitive diversity.
Diversity of machines in the workforce.
EY argues that the real power of AI and Ml is in augmenting human capabilities at work.
Age/generational diversity.
Older workers are deferring retirement and can bring a wealth of knowledge – multigenerational teams have a wider breadth of experience.
Contingent or gig worker diversity.
Contingent and gig-workers also tend to bring a wealth of experience and high levels of exposure from the tech sector. They can bring fresh perspectives and new skills, particularly when working remotely.
Beyond diversity to belonging
The idea of “diversity and inclusion” has been around for many years. A relatively recent development has been the idea of moving beyond inclusion – to belonging. Having a diverse group of people in the room is only part of the journey. Having a psychologically safe space, where your team feels not only that they are included but also a sense of belonging, is equally as important particularly for creativity, productivity and innovation. Even in the most diverse teams and companies, if people don’t feel like they belong they will disengage or leave. Creating and maintaining an open and transparent culture will help you reap the benefits of diversity. This author puts it best:
“Diversity is being invited to the party, inclusion is being asked to dance, and belonging is dancing like no one’s watching.”
So what are the benefits of diversity for your team?
There are numerous benefits of having a diverse team, and they’re very much interconnected. Diverse teams are more likely to:
- Make better decisions
- Have a wider range of skills
- Retain team members for longer
- Have better cultural and customer insights
- Recognise and mitigate risk
- Foster innovation
Make better decisions
Diverse teams tend to make better decisions. Cloverpop found that gender diverse teams make better business decisions 25% of the time, and including age and geographic diversity increases that advantage to 50%.
The really interesting part (albeit unsurprising) is that effective decision making is linked to team and company performance. Bain & Co found a clear correlation – 95% – between decision making and performance.
Retain team members and attract talent
Retention is higher in teams and companies known to value diversity. Companies with a reputation for valuing diversity not only retain diverse hires but their approach also attracts talent.
PwC found that 86% of female millennials consider prospective employers’ policies on diversity, equality and inclusion before applying for a role.
Have better cultural and customers insights
As mentioned above, the research suggests that diverse teams better understand their customers. A recent article about how a lack of diversity increases the risk of product failures describes a simple, yet powerful, example. In this case, an automatic bathroom soap dispenser failed to activate for people with dark skin. Having a more diverse product testing team could have helped better represent the customer base, identify a risk, and avoid an embarrassing product failure.
Fostering innovation
When employees see that their company is committed to and supportive of diversity, their ability to innovate increases by up to 83% according to Deloitte. That’s a pretty powerful finding.
Consider what happens when you ask a group of people from, for example, different professional backgrounds, to analyse a product or solve a problem. It’s often the collective knowledge and experience in the room that provides the key insights. When you add other elements of diversity into the mix, you benefit from the multiplier effect. You’re ultimately tapping into a host of unique experiences and perspectives – not only based on professional background but also, for example, gender, nationality, socio-economic background, religion and race.
Hiring hacks for building a diverse team
Ultimately, your goal is to get as many perspectives in the room as possible. Here are some suggestions for unlocking the potential of diversity in your team.
- Get creative in how you recruit. Move beyond traditional means of recruitment and broaden your horizons – literally.
- Write inclusive job advertisements like this
- Hire remote workers to help you access a wider range of talent
- Post your jobs in a variety of places: LinkedIn, Lever, Glassdoor, AngelJobs and well-known job boards are a good place to start – but get creative and use alternatives
- Take applications on social media – reach different demographics through multiple means of communication
- Hire at job fairs and through meetups
- Run your own hiring events where you get to meet candidates face to face – this can also help overcome the challenges and time consumed when getting candidates onsite for one to ones
- Partner with organisations in the third sector that are focused on diverse hiring
- Be prepared to look beyond traditional qualifications; consider when an applicant may not have had access to traditional education opportunities
- Hire professionals who have changed careers (there’s a huge benefit from cross-pollination of workplace cultures)
- Interview and hire graduates from tech bootcamps and academies
- Make a commitment as a team to increase diversity – just like Gusto.
- It’s a company thing – focus on company culture. Creating a great environment that actively welcomes and celebrates diversity will help attract and retain diverse people.
- Flexible work arrangements will help you attract a variety of people. Flexibility isn’t just about lifestyle. Flexibility allows people who are excluded from the traditional nine to five – for whatever reason – to contribute.
- Review your hiring process. Are there any elements that are potentially removing diverse candidates from your pipeline?
So how does all of this add up?
There are certain attributes of high-performance teams that make them stand out. Diversity is top of the list. It not only boosts team performance – it can lead to better products, better decision making and above average profitability at a company level. The secret is to think broadly about diversity and the benefits it offers you, your team and your business, today and into the future.
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Zartis is a Digital Services provider helping clients build high performing remote (a.k.a. nearshore or extended software development) teams in Europe. Feel free to get in touch if you are interested in setting up a culturally fitting team or if you would like to consult with us on achieving a diverse tech team!
