20 Diversity in the Workplace Statistics to Know for 2021

Updated on December 16, 2020

Overview: Diversity in the Workplace Statistics to Know for 2020

  1. By 2020, the caucasian population is expected to drop to 63% of the total U.S. population.
  2. Projected growth from Asian, Hispanic, and multiracial groups will turn traditionally underrepresented populations into majority groups by 2044.
  3. By 2065, the U.S. will not have any single ethnic or racial majorities.
  4. Only 40% of women feel satisfied with the decision-making process at their organization.
  5. 57% of employees think their company should be doing more to increase diversity.
  6. 41% of managers state they are “too busy” to implement any kind of diversity and inclusion initiatives.
  7. Men are twice as likely to get hired, regardless of the hiring manager’s gender. 
  8. Women are much more likely to be hired with blind applications.
  9. African Americans are 50% less likely to receive callbacks compared to white candidates.
  10. 7.4% of Fortune 500 CEOs are women.
  11. Highly gender-diverse executive teams are 21% more likely to outperform on profitability.
  12. Gender-diverse companies that are also in the top-quartile for gender-diverse executive boards are 27% more likely to have superior value creation.
  13. 85% of CEOs with diverse and inclusive cultures notice increased profits.
  14. Companies with equal men and women earn 41% more revenue.
  15. Racially and ethnically diverse companies are 35% more likely to perform better.
  16. Diverse teams are 70% more likely to capture new markets.
  17. Diverse teams are 87% better at making decisions.
  18. Inclusive companies are 1.7x more innovative.
  19. Companies that have a highly inclusive culture have 2.3x more cash flow per employee.
  20. Inclusive companies are 120% more likely to hit financial goals.

Companies have discussed diversity and inclusion in the workplace for decades, and yet, the American workforce still struggles to represent the country’s true diversity.

In recent years, diversity and inclusion have become some of the hottest topics in business HR and recruiting. As social movements grow and demand positive change, workplaces should be at the forefront of building a more inclusive future—and not just because it’s the right thing to do—but also because building a diverse and inclusive workplace can be very good for business.

Companies with a wide representation of people of different races, genders, ages, and religion have a leg up on the competition. And the data supports that point.

Here, we’ve rounded up some of the most important diversity in the workplace statistics for 2020. Understanding these statistics should help explain why creating a diverse, inclusive work environment should be a priority in 2020 and beyond.

United States Demographic and Workforce Statistics

Before we dive into these diversity in the workplace statistics, let’s get some context. According to the most recent United States Census,[1] the American racial breakdown looks like this:

  • White: 76.3%
  • Hispanic or Latino: 18.5%
  • Black or African American: 13.4%
  • Asian: 5.9%
  • American Indian or Alaska Native: 1.3%
  • Native Hawaiian or Other Pacific Islander: 0.2%
  • Two or more races: 2.8%

Additionally, here are some other important demographic statistics that relate to the American workforce.

  • Women make up 50.8% of the U.S. population.
  • Women make up 46.9% of the workforce.[2]
  • Women earn $0.85 on the dollar compared to men.[3]
  • Millennials make up the largest percentage of the workforce at 35%.[4]
  • African-American unemployment is twice as high as white unemployment.[5]
  • Hispanics or Latinos comprise 16.8% of the workforce.[6]

American Demographic Trends

  • 1. By 2020, the caucasian population is expected to drop to 63% of the total U.S. population.

    Pending the results of the 2020 U.S. Census, the white population is expected to drop from 82% of the total American population in 1980 to just 63% in 2020. Hispanics and Latinos are expected to see the largest growth in population percentage, from 6% in 1980 to 17% in 2020.[7]

  • 2. Projected growth from Asian, Hispanic, and multiracial groups will turn traditionally underrepresented populations into majority groups by 2044.

    The American population is in line for a major shift over the next 25 years and companies that are better able to embrace that change will fare better in the future.[8]

  • 3. By 2065, the U.S. will not have any single racial or ethnic majority.

    Based on immigration projections, about one in three Americans would be an immigrant or have immigrant parents, compared to one in four today. The ethnic makeup of the country projects to be 46% white, 24% Hispanic, 14% Asian, and 13% Black.[9]

Diversity Problems in the Workforce

  • 4. Only 40% of women feel satisfied with the decision-making process at their organization.

    Women often feel left out of the decision-making processes of their organization, while 70% of men feel satisfied with their organization’s decision-making. This leads to less engaged employees and can have a negative effect on retention.[10]

  • 5. 57% of employees think their company should be doing more to increase diversity.

    Employees care about diversity in the workplace and want to work in diverse, inclusive environments. The majority of American employees not only want to see their companies invest in diversity, but think they can be doing more to increase diversity.[11]

  • 6. 41% of managers state they are “too busy” to implement any kind of diversity and inclusion initiatives.

    Unfortunately, many managers feel that they don’t have time to invest in diversity and inclusion initiatives. As we’ll see, however, diversity and inclusion often go hand-in-hand with profit.

    Therefore, it’s all the more important for these initiatives to be implemented at every level of a business—which includes top-level executives giving managers the tools they need to succeed.[12]

  • 7. Men are twice as likely to get hired, regardless of the hiring manager’s gender.

    Stereotypes pervade the American workforce; however, this issue is slightly more complicated than simple gender biases. Discrimination often thrives because men tend to boast or overstate about their performance while women tend to underreport it.[13]

  • 8. African Americans are 50% less likely to receive callbacks compared to white candidates.

    One study responded to help-wanted ads in Chicago and Boston by sending resumes with African-American or white-sounding names. The applicants with “common names” in the Black population received half as many callbacks. Conversely, another study found that minorities who “whitened” their resumes by deleting references to race received more interviews.[14]

  • 9. Women are much more likely to be hired with blind applications.

    When hiring initiatives are completely blind, however, some studies have shown women are 25% to 46% more likely to be hired than men. This research suggests that blind applications could be a good way to increase diversity in your workplace.[15]

  • 10. 7.4% of Fortune 500 CEOs are women.

    That percentage is by far the highest in Fortune 500 history, a number that represents just 37 women.[16]

Diversity in Leadership

  • 11. Highly gender-diverse executive teams are 21% more likely to outperform on profitability.

    Leadership teams with equal or near-equal representation of both women and men are significantly more likely to perform profitably compared to single-gender teams.[17]

  • 12. Gender-diverse companies that are also in the top-quartile for gender-diverse executive boards are 27% more likely to have superior value creation.

    According to the same research, the most gender-diverse executive boards are more likely to create value in all aspects of a business.

  • 13. 85% of CEOs with diverse and inclusive cultures notice increased profits.

    According to a PWC survey, leaders with diverse teams notice a difference. Considering 38% of managers and executives believe CEOs are primarily responsible for increasing diversity and inclusion, it’s good to know that CEOs themselves see positive results.[18]

Diversity’s Success

  • 14. Companies with equal men and women earn 41% more revenue.

    Gender diversity is a surprising indicator of business success. While women often experience discrimination in hiring, companies with an equal gender ratio tend to make more money.[19]

  • 15. Racially and ethnically diverse companies are 35% more likely to perform better financially.

    Likewise, racial and ethnic diversity may also increase a company’s bottom line. McKinsey research found that companies in the top quartile of ethnic diversity are 35% more likely to see financial performance above the national industry median.[20]

  • 16. Diverse companies are 70% more likely to capture new markets.

    Harvard Business Review research found that more diverse companies are significantly better positioned to capture new markets, which means greater opportunity and more money.[21]

  • 17. Diverse teams are 87% better at making decisions.

    A study of 600 business decisions made by 200 teams found that when diverse teams made a business decision, they outperformed individuals 87% of the time and were shown to make decisions faster than individuals.[22]

The Importance of Inclusivity

  • 18. Inclusive companies are 1.7x more innovative.

    Companies that are diverse and encourage inclusion aren’t just more likely to outperform competitors, they’re also almost twice as likely to be leaders of innovation in their industries.[23]

  • 19. Companies that have a highly inclusive culture have 2.3x more cash flow per employee.

    Not only are they nearly twice as likely to be leaders of innovation, but inclusive companies also generate significantly more cash flow per employee. That is, as diverse, inclusive companies grow, they get more out of every employee because there’s greater buy-in.

  • 20. Inclusive companies are 120% more likely to hit financial goals.

    We’ve seen that diverse and inclusive companies tend to earn more than industry competitors, so it makes sense that they’d also reach their financial goals. However, they aren’t just a little more likely, they’re extremely more likely to meet financial goals.[24]

The Bottom Line

Diversity and inclusion in the workplace are big topics in 2020 for good reason. Not only do most American workers want to work in more diverse, inclusive environments, but diverse companies are proven to be more successful than homogenous ones.

Therefore, as you look to building your workforce and scaling your business, let these statistics be a guide to creating a diverse team that will be successful.

For insight into how entrepreneurial inequities affect business’s abilities to access capital, check out our report on the racial funding gap in the U.S.

References

  1. https://www.census.gov/quickfacts/fact/table/US/PST045219
  2. https://www.bls.gov/cps/cpsaat03.htm
  3. https://www.pewresearch.org/fact-tank/2019/03/22/gender-pay-gap-facts/
  4. https://www.pewresearch.org/fact-tank/2018/04/11/millennials-largest-generation-us-labor-force/
  5. https://www.epi.org/publication/valerie-figures-state-unemployment-by-race/
  6. https://www.bls.gov/opub/ted/2017/26-point-8-million-hispanics-or-latinos-in-the-u-s-labor-force-in-2016.htm
  7. http://www.highereducation.org/reports/pa_decline/decline-f1.shtml
  8. https://www.shrm.org/hr-today/news/hr-magazine/0217/Pages/Disrupting-Diversity-In-The-Workplace.aspx
  9. https://www.pewresearch.org/fact-tank/2015/10/05/future-immigration-will-change-the-face-of-america-by-2065/
  10. https://www.cultureamp.com/blog/improving-the-gender-diversity-of-work-teams/
  11. https://www.glassdoor.com/employers/blog/diversity/
  12. https://www.fraserdove.com/challenges-of-diversity-in-the-workplace/
  13. https://www.pnas.org/content/early/2014/03/05/1314788111
  14. https://www.nber.org/digest/sep03/w9873.html
  15. https://www.nytimes.com/2016/02/28/magazine/is-blind-hiring-the-best-hiring.html
  16. https://fortune.com/2020/05/18/women-ceos-fortune-500-2020/
  17. https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Organization/Our%20Insights/Delivering%20through%20diversity/Delivering-through-diversity_full-report.ashx
  18. https://www.pwc.com/gx/en/ceo-survey/2015/assets/pwc-18th-annual-global-ceo-survey-jan-2015.pdf
  19. https://blog.clearcompany.com/12-diversity-hiring-statistics-rethink-your-decisions
  20. https://www.mckinsey.com/business-functions/organization/our-insights/why-diversity-matters
  21. https://hbr.org/2013/12/how-diversity-can-drive-innovation
  22. https://www.peoplemanagement.co.uk/experts/research/diversity-drives-better-decisions
  23. http://joshbersin.com/2015/12/why-diversity-and-inclusion-will-be-a-top-priority-for-2016/
  24. https://www.gartner.com/en/human-resources/role/human-resources-leaders

Related Data & Statistics

Nick Perry
Contributing Writer at Fundera

Nick Perry

Nick Perry is a freelance writer based out of Boston. After working in Hollywood and Silicon Beach, he launched his own small business and frequently referenced Fundera’s resources. Now, he’s a contributing writer at Fundera. Nick has written extensively about small businesses, ecommerce, the restaurant industry, and entertainment. His work has appeared on Entrepreneur, Digital Trends, Toast’s On The Line, and more.

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