Can AI Improve Diversity in the Workplace?
Diverse companies are more profitable and grow faster, research shows. Artificial intelligence may help companies get there, but they should proceed carefully.
The business case for diversity in the workplace is strong.
A McKinsey study shows that companies in the top quartile for gender diversity on executive teams were 21 percent more likely to outperform on profitability and 27 percent more likely to have superior value creation. Companies in the top quartile for ethnic and cultural diversity on executive teams were 33 percent more likely to have industry-leading profitability.
According to Morgan Stanley, the top third of companies, based on their percentage of female employees and other metrics of gender diversity, experienced 2 percent higher average relative returns than other companies in their region. Over a six-year period, companies with more gender diversity enjoyed a one-year return on equity that was 1.1 percent better than companies with low female representation.
According to the Harvard Business Review, businesses that have greater levels of diversity and inclusion are 45 percent more likely to grow market share year over year and 70 percent likelier to capture new markets.
Hiring employees who bring diverse perspectives and experiences to the table can help a business better understand how to create innovative products and services to meet buyers’ needs, both as they enter new markets and grow existing ones.
Companies are also more conscious about building a diverse culture. Seventy-five percent of respondents to a Boston Consulting Group survey said that diversity is gaining momentum in their organizations.
But it can be challenging to create a diverse talent pool and also to retain these employees. Unconscious bias is a culprit here, both in the wording and tone of job descriptions and in judging candidates’ value to the company and fitness for a job. (read more)