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New Trends Reveal Importance of Corporate Diversity

By Melissa J. Anderson

Last week Forbes Insights released its latest study, a roundup of diversity around the globe. The report ranks nations by diversity and details diversity in various sectors and dimensions of the workforce. Clara Knutson, research manger at Forbes Insights, explained that the team hopes companies will use the survey to build effective talent strategies for the future. She writes:

“As a comprehensive atlas of corporate diversity and inclusion (D&I) efforts, the goal of this report is to learn from the varied and unique situations faced by countries and corporations around the globe: Which approaches work best? How can companies continue to increase diversity and effectively translate this into business opportunities and higher productivity?”

The study revealed that certain sectors and geographic regions retain significantly segregated by gender and ethnicity. And, the report indicates, companies can gain a competitive advantage by diversifying faster than their country and their competitors. “Diversity is mandatory in order to sustain economic growth, for a country, a sector or even a company. Keeping up with a changing global workforce requires companies, in particular, to examine their needs and adjust their business strategies accordingly,” it explains.

Keeping Up with Diversity Trends

According to the study, which ranked employee diversity across 50 global economies, increasing gender diversity is one of the most striking changes in the workforce over the past few decades. Iceland, Denmark, and Norway top the list with the highest percentages of female workers. The companies with the lowest rates of female workforce participation are Pakistan, Turkey, Chile, Italy, and UAE.

Additionally, few women have reached the top echelons of business. “The proportion of women who have climbed the corporate ladder and made it to board-of-director status varies greatly among countries. The nations with the highest percentage of female board members are Norway (36%), the Philippines (23%), Sweden (23%), Latvia (22%) and Slovakia (22%).”

Forbes believes that, in order to sustain economic development, it’s critical for countries to diversify their workforce gender diversity. “It’s worth noting that greater economic equality between men and women has been shown to reduce poverty rates, boost GDP and lead to better governance.”

The report provides a few suggestions to increase the percentage of women working: “governments can adopt a number of proven approaches such as flex-time initiatives, free or subsidized childcare, and tax breaks for married couples when both partners work.”

In fact, Forbes recommends companies begin to adopt more flex-friendly workforce policies in order to retain a competitive advantage, based on the growing number of women participating in the employment market as well as the aging population of workers. The report predicts:

“In order to keep older people and women in the workforce, more companies will offer flexible work schedules. And given the global shift toward service industries, it is easier for employees to work from home, thus allowing parents of young children to continue to participate in the labor market.”

The report touched upon ethnic diversity in the US and UK particular; according to Forbes they are the only countries to track such data. It found that skilled trade occupations were the most common type of employment for non-white workers. On the other hand, “less than 15% of managers and senior officials are minorities, with just a slightly higher percentage holding jobs in the professional occupations…”

Despite these statistics, numerous reports have revealed that diversity can improve the performance of a workforce. The report predicts that talent management from a diversity standpoint will only increase in the coming years. It says:

“Corporations will continue to evolve their diversity and inclusion efforts as part of their business plans. A diverse workforce is critical to reflecting a global society and companies’ customer base. It allows executives to under- stand their clients’ needs better and communicate more effectively. Additionally, diversity drives innovation and fosters competitiveness.”

While these statistics show that workforces are still significantly segregated by gender and ethnicity, companies that have acknowledged the strategic value of diversity will ultimately surpass those that haven’t.

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