The Harsh Reality of Diversity in Today's Workplace

10/29/2015 02:53 pm ET Updated Oct 28, 2016

Would it surprise you to learn that highly educated black professionals face a widening gap with whites as they progress through their career? Diversity in the 21st century workplace is still a challenge that impacts not only our ideas of fairness and opportunity, but the bottom line as well.

NPR recently highlighted a study by social scientists that outlined the depth of the challenges non-white professionals face when applying for jobs. One of the most surprising discoveries is the widening gap minorities experience as they progress through their career.

Led by John Nunley, an economist at the University of Wisconsin at La Crosse, researchers sent out 9,000 resumes with both traditional African American-sounding names, and traditional white-sounding names. Applicants with African American-sounding names received a 14 percent lower call-back rate.

If fewer minorities are being interviewed, fewer minorities are being hired. How does that look in the workplace?

The Real Numbers on Racial Diversity at Work

According to analysis by the Pew Research Center, the Millennial generation is far more diverse than the Silent generation was 50 years ago. Millennials are a more ethnically diverse group, and interracial marriage is happening in the U.S. at a previously unseen rate.

How is this diversity reflected in the workplace?

Based on a 2014 Corporate Diversity Study by U.S. Senator Bob Menendez, it isn't--for minorities or for women.

When looking at the boards of directors of 69 Fortune 100 companies, here are some study findings:

  • Women represent 22.9 percent of directors, even though more than half of the American population is female.
  • Non-white people--Latino, African American, Asian, or Native American--represent 18.3 percent of directors.
  • Four of the companies don't have a single racial or ethnic minority on their board.
  • Women of color represent just 4.2 percent of directors; 41 companies do not have a single woman of color on their board of directors.

When we look at executive teams the numbers aren't much better, and have actually decreased since 2011. Yes, you heard me correctly--representation has decreased.

As Senator Menendez points out, the purchasing power of Latino and black consumers each exceed an estimated $1 trillion. That should be a real wake-up call to corporate America: If a large segment of your customer base isn't represented among your decision makers, how effectively can your company do business with them?

Why Corporate America Needs Diversity

Women and minorities are significantly underrepresented in corporate leadership. Apart from the belief that every race and gender deserves opportunity, the facts are that diversity impacts the bottom line.

In his report, Senator Menendez reported, "Studies examining the relationship between racial or ethnic diversity, gender diversity, and financial performance have revealed that companies with more diverse teams outperform their less-diverse counterparts."

He cites a 2014 McKinsey report that researched hundreds of companies globally: "Companies in the top quartile of racial or ethnic diversity were 30% more likely to have financial returns above the national industry median."

Gallup has also done research that shows gender-diverse business units in retail have 14 percent higher comparable revenues; in the hospitality industry, that rises to 19 percent higher average quarterly net profit.

We've all heard the facts about employee engagement leading to much higher productivity and, therefore, profitability. These studies also show that diversity leads to higher engagement among employees.

How Do Companies Become More Diverse?

Having a diversity plan or chief diversity officer isn't enough; representation needs to be reflected at the board level as well. There need to be set targets for diversity--and yes, that means setting measurable, numerical goals at an executive level.

We talk about who really drives organizational change often on #Tchat; it is never a sole CEO or C-level executive, but this change needs to come from the top if it's going to create profound and real change.

How does upper management influence diversity throughout the organization?

  1. Ensure that the board is representative, and that this isn't a "do as a say, not as I do" situation.
  2. Tie performance reviews to diversity goals, and make sure there are financial implications to reaching goals.

Diversity won't happen by chance; your recruitment department needs to make sure that minority and female candidates interview for open positions. To truly transform your organization, it needs to be inclusive and represent everyone.

Creating a diverse workforce at the lower rungs of your organization isn't enough, but it's another place to make a difference. Beyond recruitment, plant the seeds of diversity early and develop future leaders. A strong, structured mentorship plan is essential to keep younger talent on track; professional development is a priority for Millennials in particular.

Most importantly, openly acknowledge the reality that minorities and women face in the workplace. A recent article by Gillian B. White of The Atlantic outlined the frank reality of workplace discrimination.

Through education, make sure your team understands how very important diversity is to the overall health of the organization.