As more research explores the impact of diversity and inclusion on businesses outcomes, the bottom-line case for diversity and inclusion grows ever stronger. Three studies last month added to this growing body of evidence in favor of D&I, finding that gender parity and racial diversity, particularly in decision-making roles, has a meaningful impact on companies’ innovation, productivity, and profitability.
The first study comes from Richard Warr, a professor of finance at North Carolina State University, his colleague Roger Mayer, and Jing Zhao of Portland State University. The researchers’ headline finding is that companies that score well on indicators of diversity tend to be demonstrably more innovative, Fast Company’s Ben Schiller explained in a post highlighting the study last month:
The study looks at the performance of 3,000 publicly traded companies in the years 2001-2014 across nine measures of diversity. That includes whether firms have women and minority group CEOs, whether they promote women and people of color to “profit and loss responsibilities,” whether they have positive policies on gay and lesbian employees (say, offering benefits to domestic partners), and whether they have programs to hire disabled employees. …
The big takeaway: Companies that fulfill all nine positive diversity requirements announce an average of two extra products in any given year, which about doubles the average for a major company (those that tick fewer boxes are less innovative proportionally). Moreover, the researchers find that companies with pro-diversity policies were also more resilient in terms of innovation during the 2008 financial crisis.
The paper does not conclusively prove a causal relationship between diversity and innovation, Schiller notes—companies that invest in diversity may simply be investing intelligently in other areas that impact product development more directly—but combined with what we already know about how diverse teams are more likely to challenge their assumptions and biases, more likely to engage in productive debate, and able to access a wider range of perspectives, the correlation Warr and his co-authors uncovered looks suggestive.
In an update to that work published this week, McKinsey takes a closer look at the various factors that will drive automation in the coming decades—such as technical feasibility, cost of deployment, and labor market considerations—and concludes that “between almost zero and 30 percent of the hours worked globally could be automated by 2030, depending on the speed of adoption.” The effects will not, however, be evenly distributed among occupations:
Activities most susceptible to automation include physical ones in predictable environments, such as operating machinery and preparing fast food. Collecting and processing data are two other categories of activities that increasingly can be done better and faster with machines. This could displace large amounts of labor—for instance, in mortgage origination, paralegal work, accounting, and back-office transaction processing. … Automation will have a lesser effect on jobs that involve managing people, applying expertise, and social interactions, where machines are unable to match human performance for now.
The 2107 edition of the Women in the Workplace report, released on Tuesday by Lean In and McKinsey, finds that “women’s progress is slow—and may even be stalling—in part because many employees and companies fail to understand the magnitude of the problem.” The report, which is based on pipeline data from 222 companies employing more than 12 million people, shows that women remain underrepresented at every level, and women and color are even worse off:
Only one in five C-suite leaders is a woman, and fewer than one in thirty is a woman of color. This disparity is not due to company-level attrition or lack of interest: women and men stay at their companies and ask for promotions at similar rates. Company commitment to gender diversity is at an all-time high for the third year in a row, but this commitment isn’t changing the numbers. The report points to a simple reason: we have blind spots when it comes to diversity, and we can’t solve problems that we don’t see or understand clearly.
Lean In and McKinsey find that corporate America has made little progress toward gender parity since last year’s report, which found that for every 100 women promoted past entry level positions, 130 men were promoted, and that women were less likely to be given challenging assignments, included in meetings, or afforded opportunities to interact with senior leaders. This year’s report focuses on the thorny issue that while these problems are not getting better, many Americans (particularly men) believe they have already been solved:
Many employees think women are well represented in leadership when they see only a few. Nearly 50 percent of men think women are well represented in leadership in companies where only one in ten senior leaders is a woman. And remarkably, a third of women agree. It is hard to imagine a groundswell of change when many employees don’t see anything wrong with the status quo. …
In a noteworthy study in 2015, a group of McKinsey researchers made the bold claim that “as many as 45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies.” More startlingly, they found that “a significant percentage of the activities performed by even those in the highest-paid occupations (for example, financial planners, physicians, and senior executives) can be automated by adapting current technology.”
In an ongoing project for the McKinsey Global Institute, these researchers and several of their colleagues have released updated findings in which they estimate that automation could raise productivity growth by 0.8 to 1.4 percent annually around the world, and that “about half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies.” James Manyika, Michael Chui, and Katy George discuss their research at the Harvard Business Review:
The most automatable activities involve data collection, data processing, and physical work in predictable environments like factories, which make up 51% of employment activities (not jobs) and $2.7 trillion of wages in the U.S. These activities are most prevalent in sectors such as manufacturing, food services, transportation and warehousing, and retail.
More occupations will change than will be automated in the short to medium term. Only a small proportion of all occupations (about 5%) can be entirely automated using these demonstrated technologies over the coming decade, though the proportion is likely to be higher in middle-skill job categories. But we found that about 30% of the activities in 60% of all occupations could be automated — and that will affect everyone from welders to landscape gardeners to mortgage brokers to CEOs. We estimate that about 25% of CEOs’ time is currently spent on activities that machines could do, such as analyzing reports and data to inform decisions.
The prospect of automation in the C-suite offers a lot of potential benefits in terms of enhancing executive productivity and improving decision-making, but raises as many questions about how organizations should structure and develop their leadership to prepare for an automated future. In any case, the researchers are careful to note that there are a lot of variables at play in the future of the workforce and the pace of automation is uncertain:
The latest measure of the gig economy comes in a new report from McKinsey, which finds that “up to 162 million people in Europe and the United States—or 20 to 30 percent of the working-age population—engage in some form of independent work”:
While demographically diverse, independent workers largely fit into four segments (exhibit): free agents, who actively choose independent work and derive their primary income from it; casual earners, who use independent work for supplemental income and do so by choice; reluctants, who make their primary living from independent work but would prefer traditional jobs; and the financially strapped, who do supplemental independent work out of necessity.
Those who do independent work by choice (free agents and casual earners) report greater satisfaction with their work lives than those who do it out of necessity (the reluctants and the financially strapped). This finding holds across countries, ages, income brackets, and education levels. Free agents reported higher levels of satisfaction in multiple dimensions of their work lives than those holding traditional jobs by choice, indicating that many people value the nonmonetary aspects of working on their own terms.
Independent work is rapidly evolving as digital platforms create large-scale, efficient marketplaces that facilitate direct and even real-time connections between the customers who need a service performed and the workers willing to provide that service. Today, just 15 percent of the independent workers we surveyed have used a digital platform to find work, but the so-called on-demand economy is growing rapidly.
Breaking down the independent workforce by segment, the report identifies 30 percent of independent workers as “free agents”, 40 percent as “casual earners”, 14 percent as “reluctants,” and 16 percent as “financially strapped.” An Intuit study earlier this year also attempted to categorize different types of on-demand workers: That study concluded that 42 percent were building careers or businesses of their own through their freelance work, 26 percent were taking on side gigs to supplement a regular job, and 18 percent were using on-demand work to substitute for a regular job they either had lost or couldn’t find.
The latest report on women in the workplace from Lean In and McKinsey focuses on the challenges women still face when it comes to getting ahead in corporate America. Quartz’s Oliver Staley highlights the report’s key findings:
For every 100 women promoted past entry level positions, 130 men are promoted. Women are less likely to receive challenging assignments, participate in meetings and have access to senior leaders. And the pipeline of promotion shows women are being passed over at every stage (men and women are dropping out of the workplace at equal rates, so the numbers can’t be blamed on attrition) …
The survey revealed that more women then men asked for a raise, 29% to 27%, but that in response, 30% of women were told that they were being “bossy,” “aggressive,” or “intimidating,” compared to 23% of men. Women also say they receive less feedback from managers than men. While 46% of men say they receive difficult feedback, only 36% of women do. Managers say the biggest reason they fail to give women feedback is a fear of being mean or hurtful.