Why Workforce Diversity Matters for Your Business

Have you ever thought of yourself as a role model? Well, you are. When you own one of the country’s 30 million small businesses (a group that accounts for 99.9% of all U.S. businesses and employs 59 million people, according to the SBA), the world is watching you. That’s why it’s so important for entrepreneurs to commit to creating workforce diversity.

Like it or not, our businesses tend to reflect us. So even if you think you’re doing a great job of diversifying your workforce, you may not be doing as well as you think.

Consider a recent survey by Gusto. A whopping 93% of small business owners polled say they actively make an effort to hire diverse employees. Sounds great, right? But look a little closer, and the same study found that a founder’s racial, ethnic, and gender characteristics tend to be the biggest factor in what types of employees they hire.

• While 47% of minority founders say a majority of their employees are racial or ethnic minorities, just 13% of white founders can say the same.
• Only 36% of male founders say women make up more than half their employees. In contrast, 70% of female founders have a workplace that’s more than 50% female.

How workforce diversity can help your business

Workforce diversity isn’t just “nice to have”—it’s actually beneficial to a business’s bottom line.  In a 2018 McKinsey study, companies ranking in the top quartile for gender diversity are 21% more likely to have above-average profits than companies that rank in the bottom quartile. Companies ranking in the lowest quartile for both gender and ethnic diversity are 29% more likely to have below-average profits.

When your workforce all looks the same, it not only hurts your profitability and competitiveness, but it also negatively affects your company’s image. I don’t have to tell you how competitive today’s hiring environment is. Don’t you want your business to be seen as a good place for all kinds of people to work?

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Remember, ethnicity and gender aren’t the only factors to consider in creating a diverse workforce. Workplace diversity also means hiring employees with disabilities, employees from different age groups, and employees from different geographical, experiential, and cultural backgrounds. Whether you’re hiring first-generation Americans, seniors looking for part-time work, or mothers returning to the workforce after raising kids, your business can’t help but benefit from all those different perspectives.

5 steps to diversify your workforce

The following hiring tips will help you build a diverse team:

• Look outside traditional sources of job candidates. Make an effort to reach out to people outside your social circle. Share job openings on sites or with organizations that help minority, female, or disabled workers. If you normally only recruit entry-level employees from nearby colleges, why not open it up to organizations that work with stay-at-home moms or retirees looking for part-time work?

• Promote your search for diversity. Let job seekers know—via your website, social media, and job ads—that you’re actively recruiting for diversity. Work with local organizations that help job seekers in specialized categories, such as military veterans, economically disadvantaged people, or people with disabilities.

• Consider the whole person. If you only want employees with certain qualifications, such as a specific degree or work experience, you’re limiting the potential diversity of your applicant pool. Consider credentials, but also take a candidate’s life experience and personal qualities into account.

• Get your employees to recruit for you. Encourage employees to let friends and family know when you’re hiring. When diverse employees spread the word to their social circles, it can’t help but bring more diverse job candidates into your orbit.

• Look for employees outside your area. Urban areas are typically more diverse than rural or suburban locations, so extending your search to nearby cities can help you develop a more diverse pool of job candidates. Hiring virtual or remote employees can accomplish this, too: Just make sure that remote employees feel part of the team by including them in everything from weekly meetings and annual parties to day-to-day Slack chats.

America is built on the diversity of our people. That diversity has strengthened our nation—and can strengthen your business, too.

RELATED: 5 Strategies for Hiring Superstar Employees in Your Small Business