Talent diversity to increase performance & productivity


There is a growing recognition that greater diversity translates into performance, productivity and a gain in competitive edge.


Each January, The Global Talent Competitiveness Index is published by Insead and Tata Communications, ranking countries and cities on their ability to attract, develop and retain talent.

The 2018 index saw the UK slide to 8th place, compared with 3rd in 2017. The focus of this year’s survey was ‘diversity and talent competitiveness’. The report aimed to ‘inform the current debate around diversity, providing practical tools and approaches to leverage the full potential of diversity as a pillar of innovation, sustainability, and ultimately competitiveness’. The survey studied 68 variables including collaboration within organisations, the gender pay gap, labour productivity and university rankings.

Diversity to increase productivity

Recent years have seen a shift from a tick box, compliance approach to diversity, to a growing recognition that greater diversity translates into performance, productivity and a gain in competitive edge.

A 2017 McKinsey study found that companies in the top quartile for gender diversity on their executive teams were 21 percent more likely to experience above-average profitability than companies in the fourth quartile.  Ethnically diverse companies were more than 35 percent more likely to outperform their industry peers on EBIT margin. Moreover, each 10 percent increase in racial and ethnic diversity on the senior executive team yielded on average a 0.8 percent rise in EBIT.

These results are nothing new; a 2014 McKinsey study reported similar findings. Why then do women hold only 15% of executive roles in the UK whilst ethnic minorities comprise only 11-12% of executive teams? The simple answer must be that achieving diversity is hard and requires commitment.

Working within a diverse team will bring difficulties and challenges, and routine tasks may not be achieved with the same speed and efficiency as when we approach them with a group of like-minded colleagues who share a similar outlook. Diversity can bring conflict, miscommunication and lower social integration, termed social process loss. Yet the evidence is clear: diverse teams outperform teams of more talented yet largely similar individuals.

A key cultural shift

The call for diversity is therefore not only a call for equality from a social justice perspective, it’s also a call for increased performance that will impact the bottom line. This will not, however, happen by accident. This is why at Dartmouth we are committed to reducing bias and improving the hiring process by producing gender equal shortlists and through events such as our recent Gender Diversity HR Forum.

Those of us who are company leaders or key decision makers need not only to commit to hiring policies which promote diversity, or even to mentoring high performers from minority groups, but also to creating environments in which diverse teams can prosper. Our office cultures need to engender inclusivity, collaboration and an appetite for new perspectives.

There are myriad ways in which this can be achieved, including secondments abroad and company structures that reward openness, innovation and idea generation as well as efficiency and meeting targets. It will take some mental legwork to figure out what this might mean in each context, but as we’ve seen, the benefits clearly outweigh the alternative.


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