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.
Before we dive into these diversity in the workplace statistics, let’s get some context. According to the most recent United States Census, the American racial breakdown looks like this:
Additionally, here are some other important demographic statistics that relate to the American workforce.
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.
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.
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.
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.
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.
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.
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.
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.
According to the same research, the most gender-diverse executive boards are more likely to create value in all aspects of a business.
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.
Harvard Business Review research found that more diverse companies are significantly better positioned to capture new markets, which means greater opportunity and more money.
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.
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.
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.
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.
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.
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.
Read more helpful business-related statistics and data:
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.