THE KEY TO SUCCESS: 8 REASONS WHY DIVERSE TEAMS PERFORM BETTER
By Paris Fawcett
D&I in recruitment is no longer just a buzzword, it’s a good business decision. With research from McKinsey and Harvard Business School showing that diverse teams are better able to radically innovate, build business resilience and financially outperform their homogenous counterparts. With the current digital skills gap creating a shortage of tech talent, recruitment teams across sectors are fighting for talent from distinctive backgrounds. Still not sold? We’ve collated eight ways in which diverse teams are proven to perform better:
You’ll drive competitive advantage in your industry
Hiring talent from a range of backgrounds will mean that a wealth of life experience can be drawn upon when business decisions are made. This leads to actions that are more well-rounded, considered, and speak to a wider-reaching audience.
At Code First Girls, 41% of our community are career switchers who bring leadership and management skills with them. 46% of our community are university students and recent graduates. Moreover, ~19% of our community identify as neurodiverse and often boast an incredible propensity for problem-solving and thinking outside of the box.
Last year, The Guardian wrote about how Code First Girls are working with organisations such as GCHQ to help place neurodivergent talent in their workforce in order to address gaps. Jo Cavan – GCHQ’s director of strategy, policy and engagement – added the following: “Neurodiversity is key to keeping Britain safe. At GCHQ, some of our most talented and creative people have a neurodiverse profile – including dyslexia, autism, dyscalculia and dyspraxia [conditions that affect the ability to process different forms of information].”
“Having a diverse team and a mix of minds better equips us to carry out our mission and tackle new and emerging threats posed by terrorists, criminals and hostile states.”
A diverse team can give your company access to invaluable unique life experiences and skill sets, which is something that can ensure a competitive advantage over other organisations in your field.
You’ll attract the best talent
By not hiring inclusively you could be missing out on a third of the best talent and an even higher percentage of those from underrepresented groups.
In a study undertaken by Glassdoor, it was found that 1 in 3 job seekers will not apply for a position at a company that lacks team diversity. The study expands on that finding with the following:
“This is significantly higher for Black (41%) job seekers and employees when compared to white (30%) job seekers and employees, and among LGBTQ (41%) job seekers and employees when compared to non-LGBTQ (32%) job seekers and employees.”
If you are to compete in the fight for global tech talent, you need to be an equal opportunity employer within whose workforce talented individuals can see people like themselves represented.
For more information on how to support your current talent, check out our blog on retaining women in the workforce and supporting diverse leaders.
Once you pass the initial hurdle of beginning to diversify your workforce with talent from different backgrounds, the road to a more inclusive organisation becomes exponentially easier. This is because diverse talent attracts more diverse talent and when you’re seen to be a progressive organisation making an effort to align yourself with the D&I agenda, you will become more attractive to jobseekers.
Your teams will be more innovative
Companies with more women were more likely to introduce radical new innovations into a market over a two-year period, as highlighted in the article ‘Innovation: Management, Policy & Practice’. Likewise, eduMe reported that inclusive companies are 1.7x more likely to be innovation leaders. For those who want to foster a work environment where new ideas are being generated and current products innovated, the key is an inspired, diverse group of colleagues who bounce ideas off each other.
Generating these innovative ideas and flexing radical thinking is essential to organisations that want to maintain upward momentum and excel in their industry. In her TedX talk, Rocio Lorenzo of The Boston Consulting Group responds to the question ‘Are companies more innovative because they have a more diverse leadership or the other way round?’ Her answer suggests that the relationship between diversity and innovation works both ways: one always drives the other and they cannot exist independently.
Credit Suisse had the following to say about their experience with diverse teams boasting innovation:
“At Credit Suisse, we recognize that the diversity of our workforce gives us a better understanding of our client’s expectations, cultural backgrounds, and regional markets. Code First Girls jumped out as a unique partner to support us. They provide women from non-technical backgrounds the skills, confidence, and inspiration to become software or data engineers and future tech leaders. Partnering with Code First Girls allows us to create our own talent pipeline bringing in new perspectives and innovative thinking into our technology department.” – George, Director, CTOO Talent Acquisition
Employee happiness and engagement will improve
Employees are on average three times more content when they are at an inclusive workplace, with research from the Boston Consulting Group showing that ‘the level of inclusiveness in an organisation has a direct impact on employees’ happiness and well-being.’
Working in inclusive organisations leads to employees who are more likely to have a healthy work-life balance and enjoy what they do. In turn, this leads to increased performance and more freedom to be creative with new ideas. Moreover, hiring diversely doesn’t just affect staff members from underrepresented backgrounds, but the entire workforce who all see increased happiness as a result of interacting with a richer, more varied group of colleagues. Happier staff mean lower levels of attrition, and instead employees who want to excel in their roles and progress up the ranks within the business.
Better decisions will be made
Diverse teams are proven to make better decisions that improve business performance and drive profit. In a study published by Cloverpop, it was found that the most diverse teams made better business decisions 87% of the time. The study goes on to say the following:
“We found that only 62 percent of business decision-making includes direct participation by a mix of both men and women. Thus, the average company has the opportunity to improve their rate of inclusive decision-making by 1.6 times. The payoff is even larger for companies like those in the technology industry with below average diversity in their employee base.”
The scope for improvement here is enormous, especially within the technology industry, and the pay-off doesn’t just come in the form of profit. Inclusive decision making will also drive further innovation, support better employee wellbeing and improve the internal running of the company.
Diverse Teams Generate More Profit
This one’s a no-brainer and of course, the research backs up the correlation between diversity and profitability. As covered, diverse teams are more likely to make good business decisions and Bain and Co found that “decision-making effectiveness is 95% correlated with financial performance.”
Organisations that make smarter decisions are more likely to introduce innovative thinking that leads to financial benefits. In their 2019 analysis of diversity, McKinsey found that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. This number had rapidly increased in comparison to their 2014 and 2017 studies showing that promoting women to executive roles is more imperative than ever.
The correlation between diversity and profit is further compounded by the Diversity and Inclusion (D&I): Global Strategic Business Report which asserts that diverse companies earn 2.5x higher cash flow per employee.
They Listen To The Facts
Fact based thinking makes employees sharper and more likely to ask the right questions. Harvard Business School reported the following:
“Diverse teams are more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant.”
The business school’s article goes on to suggest that by removing homogeneity within teams, individuals become more aware of their own potential biases and are more willing to remain objective when making decisions.
Productivity will increase
In a similar vein to teams performing better when they are happy, studies show that productiveness increases within diverse teams. McKinsey found that companies in the top quartile for diversity outperformed those in the fourth quartile by 36%.
CIO reports that 83% of millennials are more actively engaged in their work when their employees support D&I initiatives, and those companies with higher employee engagement see 20% higher productivity than their competition.
Diverse teams who are more engaged in their work are more likely to put their all into their job and team productivity increases as a result. An increase in productivity may also be attributed to the fact that more inclusive organisations create space where employees feel comfortable asking for help and jobs are completed with more ease.
Here at Code First Girls, we support organisations to diversify their workforce by connecting them with talented coders that we upskill through our education. We work with businesses globally, ranging across sectors, who are subscribed to our robust candidates funnel for their early-careers hires.
“We truly believe that diverse talent leads to stronger ideas, and ultimately a more successful business. The work Code First Girls does in creating more opportunities for women to code is fantastic, and we’re thrilled to be partners and offer many women their first Tech role to kickstart their new careers. The women who’ve joined us so far following their CFG Degrees have made such invaluable impact on our business already, and we can’t wait to welcome many more in the future.” – Alan, CIO, Admiral
If one thing has become clear from studies into workplace diversity, it’s that companies can no longer afford not to hire inclusively. If you’re ready to put words into action please get in touch with our team today.