Today’s digital world requires a new way of thinking, new capabilities, and faster execution. Most importantly, companies need a workforce that is all-in. They need a workforce that can deliver on the promise that comes from today’s digital transformation. A diverse workforce can do that. It can also drive higher profits. So can a diverse workforce be the secret to remaining relevant and profitable in the digital world?
The truth is that diversity equals a massive growth opportunity for business. Companies in the top quartile for gender diversity are 15% more likely to have financial returns above their national industry peers. Those with racial and ethnic diversity are 35% more likely to have financial returns above national industry medians. Results speak for themselves. Diversity in the workplace – whether it’s staff positions, management, C-suite, or boards – leads to better business outcomes.
Having a diverse workforce no longer means just gender parity, though. Diversity means employing people across generations and cultures, employing differently-abled people, and making sure you have equality across all dimensions of diversity.
I’m particularly interested in how young talent in our businesses will continue to make a big impact. Millennials will surpass boomers as the largest living American generation, and their effect on the economy will be felt in even greater measure. This generation spends an annual (and staggering) $600 billion. By 2020, they could account for $1.4 trillion in spending, or 30% of total retail sales. They are the consumers of everyone’s products and services.
And it’s a massive generation—by 2025 they will make up 75% of our workforce, which means the workplace is changing for them, not the other way around. Ensuring your workforce is representative of this generation and embracing their perspectives will ensure you are hitting the mark of your customers’ needs.
So how can a business truly ensure diversity in their workforce, and not just give it lip service? At SAP, we began focusing on gender intelligence in 2011 as a means to achieving our goal of 25 percent of women in leadership roles by 2017. Many of our global leaders have gone through extensive training to ensure our recruiting and evaluation processes take into account different decision-making behaviors and management styles. We recognize that diversity and inclusiveness should be integrated into every piece of the talent pipeline from attracting candidates to the development and mentoring of next-generation leaders. Success in this area requires diligence and focus, and we’re making sure it happens at SAP.
My good friend and colleague, SAP CEO Bill McDermott, has said that “none of us is as smart as all of us. For SAP, to help the world run better and improve people’s lives, we need to be the most diverse company in the world. We need strong leaders who role model this – from gender diversity to cultural diversity and differing points of view.”
Diversity is embedded in all we do at SAP. When I look at my own management team – nearly 50% of whom are women – I’m not just proud that we have gender parity, I see the benefits first-hand. In fact, SAP North America was recently awarded EDGE certification, the first technology company in the US to achieve this milestone. Further, I see the tremendous value that the team’s cultural diversity brings. Though not so apparent to the eye, we come from many countries, with different backgrounds, and have lived and worked within many cultures. Everyone’s unique and individual experiences shape our perspectives and our decisions.
Management guru Stephen Covey believes that “strength lies in differences, not similarities.” The power of diversity on your business, and more importantly, your employees, is very real. So when you reimagine your business model, or you look at new markets to enter, remember to look at new skill sets and people too. You need to be prepared to recruit and hire – and continuously develop – the people needed to support your ambitions. Look for the differences they bring to the table.
An organization’s culture is the heartbeat of the business. It’s what new talent is attracted to, and it’s what helps your current workforce thrive. Above all, when you look at your workforce, remember that diversity and inclusion are good business practices. Strong results breed habits. And diversity delivers results.
Learn about how SAP SuccessFactors solutions are being designed to remove the biases that often cloud talent processes, be it in recruiting, compensation, or succession planning.