Mini Me or Diversity? Data rather than anecdotes: Why diversity pays off empirically

27.06.2022

“No one shall be discriminated against or given preference because of his or her sex, ancestry, race, language, home country and origin, creed, religious or political beliefs. No one may be disadvantaged because of his or her disability.”

Is Article 3 of the German Constitutional Law just lip service or already a reality in German companies? We think there’s still room for improvement. Because the numbers, data and facts speak for themselves.

In order to counter unconscious biases and to value and promote diversity in the workforce and among applicants, more and more companies in Germany are adopting a diversity strategy. Diversity dimensions include: Age, ethnic origin and nationality, gender and gender identity, physical and mental abilities, religion and ideology, sexual orientation and social origin. However, diversity also describes similarities and differences in individual personality traits, lifestyles, and individual perspectives and attitudes that condition people’s actions.

What is the current state of diversity in German companies?

Women earned 18% less than men in 2020, and only one in three executives was a woman in 2019. Companies are 25% more likely to achieve above-average success if women are also represented in top management. In Germany, the effect is particularly clear: With a high proportion of female executives, the probability of above-average business success even doubles.
Up to five different generations are currently working together. Effective collaboration, knowledge management, maintaining performance and lifelong learning are priorities
28% of respondents to the survey series “This is how Germany works” said their nationality reduced their chances on the job market, while 24% thought their social background was the biggest obstacle. Educational success and opportunities for advancement in Germany still depend heavily on social origin.
57% of people with disabilities were integrated into the labor market or looking for work in 2019. The labor force participation rate of non-disabled people was 82%.
Religious rites and practices are an important form of human expression. It is important to promote understanding, respect, and consideration for different worldviews and religious practices. Muslims are frequently affected by discrimination, as are people of the Jewish faith.
74% of lesbian and gay people do not talk openly about their sexual identity with any or very few customers.

Difficult implementation – Mind the Gap

Accenture’s Getting to Equal study (2020) shows that there is a big difference in how executives and employees each perceive the progress of actual equality in their companies:

63% of executives surveyed believe a diverse and inclusive culture is important to their company’s success.
While 70% of executives say they would create a company culture where everyone feels they belong, only 40% of employees agree.
What’s more, the percentage of employees in this country who don’t feel included enough is nearly twice higher than managers believe.
If this gap in perceptions could be closed through better diversity management, companies worldwide could increase their profits by a total of 3 trillion euros.

Why diversity management?

Because we need work environments that are free of prejudice so that everyone’s potential can unfold. And that is beneficial for …:

a reduction in the shortage of skilled workers: according to McKinsey, 50% of the projected shortage of skilled workers in Germany could be cushioned by diversity in companies.
Innovation: Diverse teams develop more creative ideas and solutions. By bringing in different perspectives and strengths, the probability of faster results and innovative solutions and products is increased.
Marketing: Customers need a suitable counterpart. Diverse workforces can better adapt to different target groups and foreign markets.
Employer branding: A clear vote against discrimination and discriminatory behavior emerged from the StepStone 2021 study “How diverse the world of work really is“. According to the study, 77% of respondents would be more likely to apply to a company that presents itself as tolerant, diverse and open.
Cost savings: In the long term, effective diversity management can minimize the costs of absenteeism and fluctuation. According to the auditing firm Ernst & Young GmbH, the loss of revenue for small and medium-sized businesses caused by the shortage of skilled workers already amounts to 50 billion euros.
Profitability: The probability of higher profits increases by 43% in companies with an ethnically and culturally diverse board of directors. Language and cultural skills of employees can be the key to new markets. The prerequisite is a prejudice-free working environment.

We will discuss the implications for recruiting in our presentation “Mini Me or Diversity? Robust Recruiting Decisions with Hogan Assessments” at TalentPro (Content Stage 1) on July 06, 2022 at 4:50 pm. We relate data and personality to help companies make fair, resilient decisions, and leaders effectively create safe and humane environments to unleash everyone’s potential.

At RELEVANT, we use Hogan Assessments every day in the selection and development of people and organizations. Hogan is the world’s leading provider of research-based assessment solutions. RELEVANT helps organizations use their personality assessments to reduce turnover and increase productivity by hiring the right people, developing key talent, and identifying leadership potential.

At RELEVANT, we connect data and personality so companies make fair, robust decisions, leaders effectively create safe and humane environments, and everyone’s potential is unleashed. If you want to ensure more fairness in people-related decisions in your company, please contact us. As always, we’re just a phone call or email away.

References

Get in touch with us

We look forward to hearing from you and to a personal exchange of ideas.

Phone: +49 211 17095006

Email: kontakt@relevant-mb.de

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