Why Diversity Should Be a Top Business Priority
The lack of diversity in Utah is often in the headlines, with Utah ranked the 43rd least diverse state in the nation in 20211.
And almost like clockwork, Utah is named one of the worst states for working women every year2.
While diversity is an issue in the tech space overall, it’s an even larger challenge in Utah. In fact, it is clear to me that the lack of a diverse talent pool has resulted in the loss of substantial deals and more large companies establishing a presence in Silicon Slopes.
While progress is being made towards expanding what diversity looks like—specifically in the workplace—there is plenty more work to be done. In fact, of the “unicorns'' that have emerged in the last decade, less than 2% have Black founders3.
But don’t just take my word for it. Here are three independent reports that highlight the real-world benefits of diversity in the workforce.
Fostering an Environment For Diversity to Thrive
Example No. 1: Increased Sales Revenue
Workplaces that report the highest levels of racial diversity experience 15 times the sales revenue compared to companies that report lower diversity across the employee base4. Enabling a work environment in which all races, genders and backgrounds are seen, welcomed, comfortable and valued will ultimately allow you to best serve your customers. Diversity fosters innovation at the cognitive level, among other areas, which in turn helps teams identify opportunities that others may not have seen and can lead to revolutionary ideas and products.
Example No. 2: Improving Customer Relationships
Research conducted by the Harvard Business Review5 found that a team with a member who shares a client's ethnicity is 152% more likely to understand that client than another team. It’s that added level of understanding that we should strive for day-in and day-out to build meaningful, trusting and long-lasting relationships with customers.
Providing quality customer service and exceptional experiences is essential for business success, and relationships are often the determining factor in make or break business moments. For sales teams in particular, having members from diverse backgrounds can lead to stronger relationships, better understanding, and more helpful feedback from your customers. And with women and minorities making up some of the fastest-growing areas of small business ownership, businesses must make it a top priority to embrace diversity now–if they haven’t already–or they’ll risk losing out on young generations of top talent coming into the corporate market.
Example No. 3: Improving Employee Engagement and Retention
Not only are consumers and business owners who make up a client base becoming increasingly diverse, but younger generations entering the workforce not only expect, but require, their workplaces to be inclusive and diverse.
According to WILEY’s Diversity in Tech 2021 U.S. report6, 68% of 18- to 28-year-olds report having felt uncomfortable in a job because of their gender, ethnicity, socio-economic background, or neurodevelopmental condition. As such, young people in the workforce are setting a higher bar when it comes to inclusivity and are not willing to accept environments that don’t align with their personal values. As the labor market continues to prove ever more challenging, whether or not your business has a diverse workforce can make or break your ability to retain talent and create a more attractive hiring brand.
Encouraging Diverse Leadership
As an African American CEO, my journey to becoming an executive was inundated from the beginning with questions driven by stereotypes. While networking and meeting my peers and other business leaders, I’ve seen my white colleagues get asked about their graduate educational background. When it comes to me, however, I often get asked whether I played professional or collegiate football. While there’s no ill-intent behind these questions, they point to a stereotypical image that’s often associated with Black leaders and professionals, that the only way we reach achievement is through physical excellence, not educational accolades like our white peers.
While I have seen some improvement in recent years, it’s still rare for me to walk into a room of executive leaders where I am not the only person of color. I want to change this for future generations and am actively working to ensure that future leaders of color do not experience the same challenges that I did in my rise to CEO.
The reality is that the number of white, heterosexual, male leaders of unicorns and publicly traded companies far outweighs the number of minority executives leading the same types of businesses today. Case in point, according to Crunchbase News, among all private venture-funded companies that reached a $1 billion valuation or higher in 2021, only 11.4% have a female founder or co-founder7.
It turns out there’s even less research available about the prevalence of LGBTQ startup founders, but Backstage Capital estimates that such founders receive less than 1% of VC funding8. Encouraging a diverse workforce must start from the top down, which means that we need to do a far better job of supporting, investing in, and helping develop minority-founded and minority-led startups.
The future of work will revolve around inclusivity and diversity, and it’s here today as Glassdoor9 reports that 67% of job seekers consider workplace diversity an important factor when considering employment opportunities. Seeking out talent with varying backgrounds, cultures and identities will not only help your business to attract top talent coming into the field, but is also a determining factor for retaining employees. Top performers want diverse environments and are not hesitant to leave and find employment elsewhere if their current workplace isn't up to par.
Not only are founders, executives and leaders beholden to providing an inclusive space for employees, they also have to take current and future investors and stakeholders into consideration for business planning, goals and success measurements. Investors are most concerned with profitability, culture, employee retention and hiring practices, which are all impacted by diversity. As I reflect on my years of experience running businesses, one thing is certain: diversity is one of the most accessible, impactful and important strategies when it comes to business success and optimizing your bottom line.
As a community, I believe we must encourage every C-suite executive, investor, board member, startup owner, and leader to work independently and together to solve this problem in order to continue growing the thriving tech sector that is Silicon Slopes. Diversity can no longer be an afterthought or agenda item buzzword. It must be a priority for every single executive leadership team in our great state.
To me the data speaks for itself and shows that diversity can have a positive, and tangible, impact on business success, growth and bottom line trajectories. That is why I call on all leaders to embrace inclusion and diversity in all forms: gender, race, sexual orientation, education-level, and more.
Roy Banks is CEO of Weave. With 20 years of top leadership experience in high-tech software development, e-commerce, internet marketing, and payment processing industries. Roy served in the U.S. Navy and holds a bachelor’s degree in Business Management from Utah Valley University.
- Most & Least Diverse States in America, WalletHub, 21 September 2021 (https://wallethub.com/edu/most-least-diverse-states-in-america/38262)
- Best and Worst States for Working Women 2021, Oxfam, (https://www.oxfamamerica.org/explore/countries/united-states/poverty-in-the-us/map-best-states-for-working-women-2021/)
- The Black unicorn: Changing the game for inclusivity in retail, McKinsey & Company, 17 November 2021 (https://www.mckinsey.com/industries/retail/our-insights/the-black-unicorn-changing-the-game-for-inclusivity-in-retail)
- Diversity Linked To Increased Sales Revenue And Profits, More Customers, American Sociological Association, 3 April 2009 (https://www.sciencedaily.com/releases/2009/03/090331091252.htm)
- How Diversity Can Drive Innovation, Harvard Business Review, December 2013 (https://hbr.org/2013/12/how-diversity-can-drive-innovation)
- Diversity In Tech: 2021 US Report, WILEY, 10 August 2021 (https://www.businesswire.com/news/home/20210810005644/en/New-Survey-by-Wiley-Looks-at-Diversity-Deficit-in-U.S.-Tech-Workforce)
- Here Are The New 2021 Unicorn Startups Founded By Women, Crunchbase News, 18 August 2021 (https://news.crunchbase.com/news/here-are-the-new-2021-unicorn-startups-founded-by-women/)
- How Loud Capital’s Pride Fund 1 is uplifting LGBTQ startups, PitchBook, 24 June 2020 (https://pitchbook.com/news/articles/loud-capital-pride-fund-lgbtq-startups)
- What Job Seekers Really Think About Diversity and Inclusion Stats, Glassdoor, 12 July 2021 (https://www.glassdoor.com/employers/blog/diversity/#:~:text=More%20than%203%20out%20of,evaluating%20companies%20and%20job%20offers)
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