Women are Worth It

In most Western countries, the legal ramifications of discriminatory hiring practices are negative, swift, and severe. But what about the business ramifications?

Does hiring more women increase revenue? Your number of customers? Market share? Profits? Do job-hunters seek out companies that already have an established female presence?

Some of these questions feel like they’ve been pulled from a bad 1950s public service announcement. And yet, decades after the second-wave equality movement, women still earn less than men, whether you look at averages across the population, or compare people in the same job role. Women are grossly underrepresented in engineering, government, and top management positions. The questions might not be new, but they're still very relevant.

A recent study by Cedric Herring, Professor of Sociology at the University of Illinois, asked exactly these questions. He found that increased gender diversity in a workplace does indeed correlate with higher revenue, a larger customer base, and increased profits for a company (he found similar results for racial diversity).

Herring suggests two possible explanations for his data. The conventional value-in-diversity perspective argues that diverse workplaces are more successful because they draw from more varied views and experiences, and so are better able to “think outside the box.” The paradoxical perspective, however, argues that diversity causes group conflict, which allows conventions to be challenged and innovations to occur.

No matter which explanation you accept, the data indicates that diversity is beneficial. The real question is how can we ensure a diverse workplace?

A different group of researchers looked at the effects of gender ratios, diversity programs, attitudes towards affirmative action, and discrimination beliefs, on the attractiveness of a workplace. They found that depending on participants' sex and politics, each of these things acts as deterrents for different groups of job applicants.

For example, having a diversity program makes your workplace more appealing to women who identify strongly with “womanhood,” but less appealing to women who don't have a strong connection to their gender group.

So what can we conclude from all this? Workplace diversity is good, but like any aspect of your reputation, you need to manage perspectives of company diversity very carefully. If prospective employees get the wrong impression, you could miss out on the best candidates.

Sources: Herring, C. (2009). “Does Diversity Pay?: Race, Gender, and the Business Case for Diversity.” American Sociological Review 74(2). 208–224.; Martins, L., & Pasons, C. (2007). “Effects of Gender Diversity Management on Perspectives of Organizational Attractiveness: The Role of Individual Differences in Attitudes and Beliefs.” Journal of Applied Psychology 92(3). 865–875.