The Business Case For Diversity Reporting Just Got More Convincing
Companies that report workforce demographic data outperform those that don’t, according to a new analysis by JUST Capital.
JUST Capital found that Russell 1000 companies that publicly disclose data on the gender, race, and ethnicity of their workforce by job category more than tripled between 2021 and 2022, increasing from 11% to 34%.
Moreover, companies that disclose such demographic data outperform those that don’t by 7.9%.
Diversity is good for business
A 2015 McKinsey study previously showed that the country’s most racially diverse companies were 35% more likely to have financial returns above their national industry averages. Similarly, those topping the ranks for gender diversity were 15% more likely to have financial returns above their national industry averages.
Studies from Deloitte, McKinsey, Boston Consulting Group, and others have shown that diverse workforces and inclusive cultures are more productive, have better employee retention, yield greater customer satisfaction, and ultimately drive higher profitability.
However, to realize these benefits, companies must prioritize and report on their DEI efforts. Of the companies JUST Capital ranked, 28% didn’t disclose any race and ethnicity data at all.
More transparency and accountability
Companies with 100 or more employees are already required to submit these data to the US Equal Opportunity Commission and Department of Labor. But the public wants access to these figures too.
Despite this, just one-third of America’s largest companies publish their EEO-1 reports, the gold standard for workforce diversity reporting.
Investors are increasingly encouraging companies to disclose data on their workforce’s demographics. For example, NYC’s Comptroller’s Office and Pension Fund Trustees have been pushing companies to report diversity data.
Read: New Score Card Aims To Hold Companies Accountable For BLM Pledges
Reporting on diversity and inclusion is a crucial first step, companies cannot stop there. They must also set create, measure and disclose the outcomes of their DEI efforts.
Only then, can we truly start holding them accountable.
