The Business Case For Gender Equity: Has It Failed?

Welcome to my weekly Q&A feature. (Scroll down to find the Q&A.)

If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions—tough questions, brave questions, you name it. The level of candor and curiosity always inspires me, and I want to share that sentiment with you. Each week I pick one question that I believe others would find most instructive and publish my response to it here.

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Transparency: a behind-the-scenes look at my day-to-day.
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Has The Business Case For Gender Equity Failed?

Question:

Is the business case for diversity dead? Clearly we aren’t making much progress despite the claims that diversity boosts revenue and profit.

(Have a question about gender equity in the workplace? Ask it here for a chance to see it featured in an upcoming edition of this series.)

Answer:

It’s a common rebuke. If the business case for diversity is so staggering, why do our strides toward DEI seem so short, and even backward?

Why do we still live in a world where male founder-CEOs named David IPO’d on the Toronto Stock Exchange 3x more frequently than all women founder-CEOs? Or a world where women make up only 6.2% of S&P 500 CEOs?

A rapid brainstorming session would reveal a slurry of reasons why, despite the business case for diversity, we haven’t seen meaningful gains toward gender equity. However, there are two prominent reasons I want to look at today.

Part 1: Don’t take the business case for diversity out of context

The business case for diversity is not Easy Mac. We can’t just add water and mix. And therein lies the problem. If financial gains are your end goal, throwing more women and people of color into your workforce won’t cut it.

The business case for diversity—absent of context—was dead upon arrival.

The business case for diversity—absent of context—was dead upon arrival. We can’t tally our way up to meaningful diversity. This isn’t a “count the women” game. When we talk about diversity, we must also talk about equity and inclusion. Otherwise we propagate tokenism, which is what happens when companies make “pro-diversity” talent decisions that do little to change the balance of power.

You can hire for diversity, but you must build for equity and inclusion.

Companies grapple with diversity because they also grapple with equity and inclusion. In fact, employee sentiment on company inclusion is 29% positive and 61% negative. Companies must accept the fact that inclusion and equity don’t increase linearly with every new “diversity hire.” That’s why I say you can hire for diversity, but you must build for equity and inclusion.

Salesforce recognized this in their 2022 Annual Equality Update when speaking about their goal of having 50% of their US workforce from underrepresented groups by 2023:

“We know that representation does not hinge on hiring alone — we must focus on experience. We continue to see higher attrition trends for underrepresented minorities as well as experience gaps in our employee survey data, particularly for Black women.”

Part 2: The business case is not a means to an end

Along with the business case for diversity, you’ve also probably heard about the legal case and the moral case for diversity: do it or you’ll get sued; do it because it’s the right thing to do.

The business case, legal case, and moral case for diversity aren’t in a zero-sum competition. We must refrain from debating which proposition usurps the others. The business case, legal case, and moral case all play a role in raising our attention to the importance of DEI. However, without systemic intervention these cases fizzle at converting attention into action.

What does “systemic intervention” mean?

It means we must use tools and build accountability infrastructure to re-architect workplaces where talent of all genders, races, ethnicities, and ages can thrive. It’s about using these tools and systems to turn inequitable inputs into equitable outputs, which will in turn drive progress toward what we are ultimately optimizing for: Equity for All®.

Final thoughts

We’ve admired diversity, equity, and inclusion for long enough. Now it’s time to convert our attention into measurable progress. When we cross the chasm—the gender equity chasm, that is—we can look forward to reaping the benefits of a more diverse, equitable, and inclusive workplace. And yes, those benefits include financial gains for companies.

Pipeline’s research shows that for every 10% increase in gender equity, businesses see a 1-2% increase in revenue. The benefits of gender equity also feed the economy (it’s a $3.1 trillion economic opportunity in the US alone).