Saturday, January 20, 2018

Diversity can make companies more profitable

In this recent follow-up study by McKinsey, its clear that a diverse management team can make a significant difference in the financial health of large companies. It's likely also true of small to medium sized companies, in part because it better reflects the population the company is serving.

In the original research, using 2014 diversity data, we found that companies in the top quartile for gender diversity on their executive teams were 15 percent more likely to experience above-average profitability than companies in the fourth quartile. In our expanded 2017 data set this number rose to 21 percent and continued to be statistically significant. For ethnic and cultural diversity, the 2014 finding was a 35 percent likelihood of outperformance, comparable to the 2017 finding of a 33 percent likelihood of outperformance on EBIT margin; both were also statistically significant.

Take a look at the study to unpack what gender vs ethnic diversity can do for your business.

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