Study proves that workplace diversity may increase business success

There are many schools of thought on the benefits and setbacks of workplace diversity, but most seem to point to the notion that workplace diversity can be a detrimental benefit to business success.

I recently came upon a study conducted by sociologist Cedric Herring of the University of Illinois at Chicago, who examined data on diversity levels and business performance from about 250 US companies. The companies he chose to examine are representative of all US businesses with more than ten employees and range from very small businesses to large multinational corporations with thousands of employees.

Dr. Herring confirmed the diversity data from the different companies with independent statistics provided by Dunn & Bradstreet and also used documents the companies filed with the federal government to verify the authenticity of the diversity data they provided.

Herring set out to determine if there was any evidence that diversity makes a difference in terms of business success, and he found that it clearly does. His study revealed that companies that are more diverse have more customers, greater market share in their industries, and greater profitability.

Conversely, he found that companies that have very low levels of racial and ethnic minority employees have the lowest amount of customers, the least market share, and the lowest profits. Companies that had medium levels of diversity fared better, but those with the highest levels of diversity did the best.

When he converted the data into a graphical representation, he discovered a linear relationship between diversity and business success. In other words, he found that as diversity increases in a company, business success also increases.

However, Herring cautioned that the study does not conclusively prove that companies do better because they are more diverse. While it may appear that diversity causes better business success, it may just be that successful companies are better at attracting and retaining diversity applicants. What his study does show is that there is a real correlation between diversity and business success— even though that does not necessarily indicate that one causes the other.

Hopefully, this study will mark the beginning of many future studies that will eventually prove that diversity does have a definite positive effect on business success. Workplace diversity advocates have long claimed that diverse workers help make companies more responsive to their customer base and help increase revenues, and this study seems to confirm it.

Having a diverse workforce unites people of diverse ideas, attitudes, and life experiences in working together to make a company grow. It also provides a range of perspectives that can alert a company to threats and opportunities.

Hopefully more US companies will take note of Dr. Herring’s study and work harder to create more diverse workforces. Because if his study is true, and I clearly believe that it is, increased diversity equals increased profits— something that all businesses want and will work tirelessly to achieve.