How diversity can make your business better

Women, diverse and other historically underrepresented communities in the United States have long faced inequalities when it comes to employment opportunities. Although the economy and jobs market have bounced back somewhat from pandemic shocks, certain groups have again been left behind:

• 1 million fewer women were in the labor force in January 2022 compared with February 2020. The male workforce, in comparison, recouped all job losses triggered by the pandemic, according to the National Women’s Law Center.
• Black workers were 65% more likely than white workers to be unemployed in Q3 2021, according to the Economic Policy Institute.
• Hispanic workers were 52% more likely to be unemployed than white workers, according to the same EPI data.

“Companies of all shapes and sizes have a responsibility to invest in opportunities for diverse employees and help reverse these disparities,” said Thelma Ferguson, Vice Chairman of Commercial Banking at JPMorgan Chase. “Doing so can help build more well-rounded teams, spark innovation and result in a stronger economy for all.”

The business benefits of diversity

Pushing for greater diversity as a business owner isn’t just the right thing to do—it’s supported by data. Diversity in the workplace can lead to growth, sustainability and efficiencies for your business. According to a 2019 study by McKinsey, “Companies in the top quartile of gender diversity on executive teams were 25% more likely to experience above-average profitability than peer companies.” Additionally, companies with higher ethnic and cultural diversity outperform others in terms of profitability.

Starting at the top

Diversifying leadership plays an important role in building an inclusive environment and setting a positive example for junior employees and potential hires. Many companies have committed to diversifying their C-suite leadership, and recent research shows some progress.

“Hiring leaders from different backgrounds and experiences brings diversity of thought and creative solutions to your company—and can help bolster a more inclusive talent set,” Ferguson said.

Other research suggests more needs to be done. According to McKinsey, female representation in the C-suite increased 5 percentage points from 2016 to 2021—but still falls well short of parity. Furthermore, in 2021, The Washington Post reported that Black executives’ representation in the C-suite at the 50 most valuable public companies reached only 8%.

Inclusive hiring—and retention—is a winning strategy

In a tight labor market, achieving proper representation requires thoughtful talent recruitment and retention strategies. When hiring, communicate your company’s diversity, equity and inclusion (DEI) values early and often, and ensure you use a diverse panel for candidate interviews to avoid bias.

“If we only look to hire those from within a specific profession, or with a certain degree, our pool of talent can become too narrow and homogenized,” Ferguson said.

Another consideration: Remove gendered language from job postings. Words such as “competitive” or “supportive” may sway candidates’ perception of the job and discourage some from applying. Instead, focus job descriptions on objective responsibilities and qualifications. 

It’s also increasingly important to weave your DEI values into your core business practices, which can help you both hire and retain a diverse staff. Consider what candidates searching for your company online will see. In 2020, American corporations collectively promised $50 billion toward improving racial equity. JPMorgan Chase, for example, has committed $30 billion by the end of 2025 to advance economic growth and opportunity for Black, Hispanic and Latino communities, and shares regular updates on these efforts.

Your next steps

When it comes to prioritizing diversity initiatives, the sooner the better—and there are so many ways to start. Ambitious diversity commitments made today will have positive impacts on your business for years to come.

“We can accomplish great things when companies work together toward a common goal of diversity, equity, inclusion and innovation,” Ferguson said.

For help building or elevating your DEI strategy, check out these resources:

• 6 steps to building your DEI strategy from the ground up
• Strategies for building your company's DEI team
• 3 ways to integrate diversity, equity and inclusion across your business

¹Adding Women to the C-Suite Changes How Companies Think
²U.S. Bureau of Labor Statistics
³Hispanic Association on Corporate Responsibility (2021), “2021 HACR Corporate Inclusion Index Report”