Diverse companies retain 78% of desired customers

Gender inequality hurts commercial businesses’ bottom line while diverse companies retain 78% of desired business,  tech firm and machine learning specialist Altify reported today.

This research comes weeks after the UK’s BBC’s gender pay gap hit newspaper headlines.

The Irish edition of the Sunday Times followed this up with a column by Kevin Myers that said men tend to be paid more because they “work harder, get sick less frequently and seldom get pregnant” and are “more ambitious”.

Before getting fired, Myers suggested that two of the British Broadcasting Company’s best-paid female TV presenters, Claudia Winkleman and Vanessa Feltz, did so because they were Jewish.

A McKinsey report also suggests 15-35% better financial results are achieved in companies where diversity is being promoted.

“While correlation does not equal causation (greater gender and ethnic diversity in corporate leadership doesn’t automatically translate into more profit), the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful,” says McKinsey.

Altify assessed regional perspectives on the impacts of workplace diversity policies and found Europe, the Middle East and Africa (EMEA) lags behind the rest of the world with only 58% of senior executives agreeing.

In the Americas 62% and agreed, compared to the rest of the world at 67%.

Healthcare (75%) and professional services (74%) see the most value in a diversity policy, says Altify.

The research found 73% of financial services participants believe their companies deserve a ‘good’ or ‘great’ ranking when it comes to their track record in supporting diversity.

Altify’s report comments: “We constantly see the echo-chamber effect where people converse or interact only with those of a like-minded opinion. This symptom has been all too prevalent in the recent polarized political races in both the US and EMEA.

“This is not a way to learn or to broaden one’s perspective. It does not build a network of trust. It is not how we will experience different thinking or expand or question our viewpoint,” it says.

McKinsey found that companies in the bottom quartile both for gender and for ethnicity and race are statistically less likely to achieve above-average financial returns than average companies.

That is, bottom-quartile companies are lagging rather than merely not leading, said McKinsey.

In the US, McKinsey found a linear relationship between racial and ethnic diversity and better financial performance.

For every 10% rise in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rose 0.8%.

In the UK, greater gender diversity on the senior-executive team corresponded to the highest performance uplift in McKinsey’s data set, as every 10% increase in gender diversity, EBIT rose by 3.5%.

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