Workforce Diversity – why does it matter?

diverse group of employees

Striving for Diversity in the workplace is a challenge for management consultancy firms. Is it worth the effort?

Much of the current discussion on diversity is around gender disparities which is a relatively straightforward issue.

However, when diversity also encompasses (but is not limited to) race/ ethnicity, age, religious and political beliefs, education, disability, socioeconomic background and sexual orientation then businesses might struggle to see how this mix can be achieved! Especially outside the major employers that arguably have the depth and breadth of resources to do so.

Why is Diversity important?

1. Equal opportunities.

It is widely accepted that society should create equal opportunities for all. However, the gender pay gap and homogeneity of senior management in large corporates is evidence that more progress is required. By putting diversity on the agenda it becomes a clear objective that aims to level the playing field, reducing the disadvantage that someone may have because of a particular characteristic and increasing fairness. With certain events sometimes raising the profile of this issue, it is helpful to see more and more how diversity is a goal more companies are working towards.

2. It has a direct impact on a company’s results.

McKinsey’s report Why Diversity Matters finds that companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians. Furthermore, companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians.

3. Clients expect and value diverse consultancy teams.

There is an increasing requirement for management consultancy teams to be as diverse as the industries in which their clients are operating. In addition to this, teams working on client projects are expected to gather insights from the widest possible range of perspectives.

4. Organisations who don’t embrace diversity will struggle to compete for talent.

Millennials in particular place value on working in a diverse workforce. According to a study in the US by the Institute for Public Relations (IPR), forty-seven percent of Millennials actively look for diversity and inclusion when sizing up potential employers. Furthermore, companies who do not strive for a diverse workforce will be fishing in a much smaller candidate pool.

How does diversity improve a firm’s performance?

Data shows that diversity within a company is correlated with better performance, but does not per se prove that it is the direct cause. However, decades of research show that socially diverse groups (that is, those with a diversity of race, ethnicity, gender and sexual orientation) are more innovative than homogeneous groups.

Diversity is shown to enhance creativity and aid problem-solving. Individuals will each bring different information, opinions and skills to a team. This is clearly essential when working on a task requiring multi-disciplinary skills. Experiments have shown that diverse teams handling information and ideas were more creative and innovative with that information due to the varied perspectives within the team. Furthermore, because there is an expectation that a diversity of opinions will make it more difficult to reach a consensus, team members work harder.

Many clients and potential clients have diversity objectives and recognise the benefits. Organisations therefore place value on diversity within the management consultancy teams they employ. If a consultancy firm can demonstrate its commitment to diversity then it will be in a better position to win more clients and grow the business.

Are there any negative effects of diversity?

An increase in the diversity of employees, while improving creativity and productivity, could at the same time increase friction and tensions within the workplace. An unwanted side effect of working in an environment where individuals are more likely to challenge one another’s perceptions could be an increase in staff turnover and potentially an increase in workplace bullying.

It is therefore important that a commitment to diversity should be led by senior management to minimise this risk. Training is one way to mitigate any potential problems, by recognising where these might arise and putting in place the support and tools for people to understand how to handle them. This approach is another way for a company to demonstrate a clear commitment to diversity and to encourage the positive results it can reap.

How do you recruit a diverse workforce?

The starting point can be a commitment to diversity from the leaders of an organisation. This might include a Diversity and Inclusion policy as part of a firm’s mission statement and a review of the current workforce to develop tangible constructive action. The different elements to consider as part of this policy may include the following:

  • Assess your current workforce and identify priorities, for example gender, age, ethnicity etc. Set goals but realise targets are not reached overnight.
  • Review the company brand and representation of diversity within the images on the company website.
  • Address accessibility, both in terms of physical constraints, but also job application processes for differently abled candidates.
  • Consider flexible working. Remove obstacles as far as possible to candidates who have commitments as carers.
  • Where possible be aware of unconscious bias when recruiting. It is tempting to favour a candidate who seems familiar – they talk, dress, and have the same values as you. Although this may on the face of it seem a lower risk option, it will not result in the overall benefits diversity provides.
  • Consider the implications on diversity of using referral schemes to source new staff. Recruiting too many candidates in your own homogenous image is not good. However, if you ensure that your existing staff are aware that you embrace diversity and inclusion as a business you may be able to reach candidates from a broader range of backgrounds.
  • Work on your job advertisements. Studies have found that even small differences in wording can send very different messages to prospective applicants. Use tools such as the free website Gender Decoder for Job Ads. This allows you to paste your text into a web form and have it analysed to highlight potential problems.
  • Removing certain information from CVs, such as the name and gender of the applicant can help employers minimise the impact of unconscious bias by forcing hiring managers to focus solely on the applicant’s qualifications and experience.
  • Consider the use of pre-hiring testing to assess personality and skills, which are blind to hiring methods.
  • Check your interview questions and assessments. Some companies favour unstructured interviews and there is some merit to that approach. However, one downside is that it can lead to a lack of diversity. A more structured approach can help you to compare candidates more fairly. Ask the same set of questions in the same order to each candidate, and then do a comparative evaluation.
  • Employ a good executive recruitment firm to work with you or for you to source diverse talent. They have experience in removing bias from the recruitment process and may well have access to a more diverse candidate pool than you do.
  • Monitor success in workforce diversity on an ongoing basis and modify and improve processes accordingly.
  • Take care with innovative recruitment processes and unintended consequences! Video interviews and CVs might be leading edge but could disadvantage some of the groups you are trying to attract

Employers must of course be careful to ensure that a side effect of well-meaning hiring or talent policies is not in itself discriminatory e.g. rejecting/overlooking white middle class males. Achieving Diversity should be an inclusive process.

For an informal, confidential, no commitment discussion or advice please email Chris Sale, Managing Director on [email protected] or call him on 01344 636 443 (direct line). More information can be found about Prism Executive Recruitment at and details of our unique Recruitment Healthcheck service.

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