- Position1 of 3›
- Diversity is critical to workplace success
Sales and customer volume is directly linked to diversity.
The argument
A sociologist at the University of Chicago examined the impact of racial diversity on a company's sales figures and found that the companies with the highest levels of racial diversity recorded an average of fifteen times more sales than those with the lowest level of diversity. The argument builds from that headline finding to a claim about why it holds. The first support is that the relationship is graded rather than a contrast between two extremes. When he investigated further, the direct correlation between racial diversity and sales became clearer. For every percentage increase in a company's rate of gender and racial diversity (up to the rate naturally occurring in the general population), the sociologist found sales revenues increased by 3%-9%. A pattern of that kind is what one would expect if diversity were doing the work, since more of it corresponds to more of the effect at every point along the range. The ceiling matters too: the gains run up to the level found in the general population and not beyond it, which points to representation of the customer base as the operative variable. The second support separates the effect from price or margin. Not only were sales higher, but companies with higher levels of diversity consistently reported larger customer volume. Companies with the highest rates of diversity among employees reported having an average of 35,000 customers. Those with the lowest rates of diversity reported an average of 22,700. More customers, rather than more revenue per customer, is what a preference on the buyers' side would produce. This indicates, whether subconsciously or not, customers respond well to diverse workforces and prefer to do business with companies whose racial and gender profile reflect those of the wider population.
Context
Company workforces which most accurately affect the demographics of the population record more sales and generate more customers than homogenous workforces.
Premises
Counter-arguments
This isn't the case everywhere. In Europe, for example, people care much less about diversity than in the United States. In a Pew study, in 6 out of the 10 European countries surveyed, the most popular opinion among the public was that diversity doesn't make a difference. This would indicate that consumers in these countries do not value diversity and would be indifferent to giving their custom and business to a company with a homogenous workforce.