As the country becomes more diverse, so too should (and does) the workforce. As such, diversity, equity, and inclusion (DEI) initiatives are growing in importance and visibility for companies of all sizes. In fact, according to a 2023 survey for Incfile, nearly 55% of small businesses are making diversity a “key tenant” of their operations.
DEI: Corporate policies or practices designed to attract diverse employees and offer them equal opportunities for professional development and full participation in the activities of an organization.
The benefits of having a diverse workplace are clear—from improved employee engagement and retention to increased financial success. Consider the following diversity in the workplace statistics as you determine how to promote employee diversity in your business.
Current State of Diversity
Before we dive into the specific issues and challenges around diversity in the workplace, we need to understand the changing demographics of the workforce.
1. Non-Hispanic whites make up less than 60% of the US population
The US Census Bureau estimates that in mid-2022, non-Hispanic whites made up 59.3% of the US population (that percentage dropped below 60% for the first time in 2020). That is down nearly 5 points from 2010. The shift is more pronounced for young people: For individuals under the age of 18, there is no majority racial or ethnic group.
2. Nearly half of Gen Z individuals are racial or ethnic minorities
According to Pew Research, only 52% of members of Generation Z (the generation currently entering the workforce—born after 1996) are white. This is down 9 points from the prior generation, millennials. The most significant change is in Hispanics, which represent 25% of Gen Z, compared to 17% of millennials.
3. 77% of the labor force identifies as white
The workforce is also becoming more racially diverse but at a slower pace than the overall population. In 2020, individuals identified as white (including Hispanics) made up 77% of the labor force, compared to 81% in 2010. Blacks and Asians made up 13% and 6%, respectively, of the workforce that year.
4. Women’s labor force participation rate in the US is 57%
Just over 55% of adult women are employed or actively seeking work, according to a Bureau of Labor Statistics (BLS) analysis. This number hasn’t risen significantly since about 1990. Men’s labor force participation rate is about 10 points higher.
Key DEI Issues
DEI initiatives have gotten much attention in recent years, but as the diversity in the workplace statistics below show, progress remains to be made.
Did You Know?: The market value for DEI-related initiatives globally is expected to nearly triple between 2022 and 2030 from $10.6 billion to just under $29 billion.
5. Whites make up 82% of management occupations
Some positions and sectors, in particular, struggle to reflect the changing nature of today’s workforce. Chief executives are 86% white according to the BLS (and 71% male), while other 85+% white positions include sales, public relations, facilities, training and development, and construction managers.
Even a sector like nonprofit, which often serves underrepresented individuals, still has diversity issues. This is especially noticed at the advisory level, where whites comprise most executive positions and board memberships.
6. 87 women are promoted to manager for every 100 men
According to McKinsey & Company, women still lag behind men in management promotions, which creates an even bigger problem with executive-level promotions as there are fewer female managers to choose from. The bright spot in McKinsey’s data is that, in 2021, women of color were promoted at the same rate as women overall for the first time.
7. Median weekly earnings for women are 83% of the median weekly earnings for men
BLS data shows that Black women made 90% of what Black men made in 2022. White women made 83% compared to white men, while Asian and Hispanic women made 82% and 87% as much, respectively, as their male counterparts.
8. People with a disability are 2X more likely than those without to be unemployed
Although the unemployment rate for people with a disability declined in 2022, the BLS notes that it is still much higher than the unemployment rate for people without a disability (7.6% vs 3.5%). Part-time work and self-employment are also more likely for workers with a disability.
Check our small business guide to hiring people with disabilities.
9. More than 40% of workers have faced harassment at work
Forty-four percent of respondents in an AllVoices survey said they had experienced workplace harassment related to factors such as race, gender, age, and sexual orientation. Respondents identified discrimination, cyberbullying, sexual harassment, racism, and socioeconomic harassment as the top types of harassment.
10. Nearly half of LGBT workers have experienced some form of unfair treatment at work
A May 2021 survey of 935 LGBT workers from the UCLA Williams Institute found that 46% have been unfairly treated at work. This includes not being hired, being fired, and being harassed. A full third of LGBT employees have left a job because of unfair treatment.
Learn about hiring biases that might influence your hiring decisions and how to combat them.
11. Fewer than half of HR professionals think their workforce reflects the demographics of their environment
Although about 55% of respondents to a 2022 HR Research Institute survey indicated their company’s culture has become more inclusive over the past two years, only 45% feel their workforce mirrors marketplace demographics.
For tips on where to find a diverse talent pool for your open positions, read our guide on diversity job boards.
12. Fewer than 30% of workers strongly agree their organization is fair to everyone
Equal treatment is still an issue in the workplace, according to a recent Gallup survey. Only 28% of respondents in that survey strongly agreed that their organizations are fair to everyone.
13. About a quarter of organizations have mature diversity initiatives
One reason many organizations do not have diverse teams, especially in leadership, is because their diversity in the workplace programs are new—or even nonexistent. The HR Research Institute survey mentioned earlier found that only 22% of HR professionals feel their organizations’ DEI initiatives are at advanced or expert stages. About one-third felt those initiatives were just beginning in their organizations, and 13% said “little or nothing has been done to increase DEI.”
14. About a third of DEI practitioners feel they have the resources to support their diversity initiatives
Although nearly 75% of respondents to Culture Amp’s Workplace DEI survey claim to have support from executive leadership for DEI initiatives, only 34% say they have the resources to match.
15. 12% of businesses hold managers responsible for recruiting diverse candidates
Many companies are reluctant to hold employees accountable for their diversity efforts. Instead of managers or recruiters, accountability is typically assigned to the compliance department, where more emphasis is placed on having a policy versus implementing the policy. Only 12% of managers and 11% of recruiters are responsible for sourcing or recruiting candidates from diverse populations, according to the Josh Bersin Academy. As a result, these initiatives may not be shown the same priority as goals on an employee’s performance review.
Consider making DEI initiatives part of your performance management process for managers or your hiring/recruiting team.
16. About a quarter of companies with DEI goals track Black or female candidate representation
You might assume that businesses with DEI goals would closely monitor their success. However, according to iCIMS, only 26% of those businesses have specific metrics to track Black and female representation in their workforce.
Make sure you track DEI progress as one of your primary HR metrics.
17. Fewer than 10% of HR professionals consider their DEI initiatives “very effective”
Simply incorporating DEI initiatives into workplace operations isn’t enough—they must be effective. And according to HR Institute’s 2022 survey, only 9% are considered very effective (scoring 8–10 on a 10-point scale).
Benefits of Diversity in the Workplace
The societal benefits of focusing on diversity, equity, and inclusion may be obvious, but what are the benefits to your business? Investing in any type of initiative costs money, time, and energy, so you want to see a return on that investment. The benefits of diversity in the workplace statistics below show why hiring a diverse workforce and nurturing and growing those talents is good for your business.
Learn more with our guide to developing a diverse recruiting strategy.
18. Diverse companies earn 2.5X higher cash flow per employee
Data from Research and Markets’ 2022 Diversity and Inclusion Report shows that diversity can and does influence a business’s financial performance. It found that diverse companies have a per-employee cash flow 2.5 times higher than their less-diverse peers.
19. Inclusive teams are 35% more productive
The same Research and Markets report also indicates that teams that value and promote inclusivity are 35% more productive. As the report says, “To be successful in a world that is constantly changing, companies need to be leading the change rather than responding to it. Companies with more diverse teams and inclusivity are better able to lead change than those with a more homogeneous workforce.”
20. Companies are 2.6x more likely to retain their workforce if they employ strong DEI measures
Businesses that spend time and resources on removing barriers and promoting DEI initiatives are 2.6 times more likely to increase employee engagement and improve retention. This is in part because they are more likely to create a sense of belonging and connection among employees, among other things.
21. 68% of companies with highly engaged employees have a broadly defined DEI plan
Aon’s 2022 Global Diversity, Equity and Inclusion Survey found that nearly 70% of businesses with highly engaged workers define DEI broadly (covering six or more categories). This compares to only 54% of companies with low engagement that do. So, don’t limit your DEI focus to race, gender, and ethnicity; consider religious affiliation, national origin, sexual orientation, language, disability, veteran/military status, age, and more.
22. Nearly two-thirds of HR professionals feel DEI initiatives improve an organization’s mission, vision, and values
Sixty-four percent of surveyed HR practitioners felt a focus on diversity, equity, and inclusion enhanced their company’s mission, vision, and values. Furthermore, the HR Research Institute study found that 57% felt it improved organizational performance, and 52% felt it improved compliance.
23. Employee perception of their company’s diversity efforts impact workforce happiness
The Workforce Happiness Index from CNBC and SurveyMonkey is a rating derived from an employee survey that measures pay, advancement, value, autonomy, and meaningfulness. That score is 12 points lower among employees who don’t believe their company is not doing enough relating to DEI as compared to those who do (63 to 75).
Making diversity content a significant part of your recruiting and hiring process and training and development initiatives can help ensure candidates and employees know the importance you place on the subject. This is key for small businesses, which are now competing more often with midsize and large businesses amid the surge in remote employment.
The fact that employees are happier when employers make the appropriate investment in DEI shows the importance of these initiatives. Happier employees are more productive and engaged and stay with their employer longer.
24. Most employees want to work at companies that prioritize DEI
Nearly 80% of employees consider it important that the company they work for prioritizes DEI, according to the CNBC/SurveyMonkey survey. That number is even higher when looking at specific workforce segments, such as women and ethnic or racial minorities. Furthermore, 53% of all employees say it is “very important.”
Diversity in the Workplace Frequently Asked Questions (FAQs)
Expand the questions below to get answers to some of your most-asked questions about workplace diversity.
As our benefits of diversity in the workplace statistics show, having a diverse, equitable, and inclusive business creates many positive outcomes. It can improve your company’s financial performance and your employees’ productivity and creativity. Additionally, studies have shown increased employee engagement, satisfaction, and retention as a result of DEI initiatives. Lastly, don’t forget your customers. Increasingly, consumers expect businesses to share their values, with Amazon reporting that two-thirds of consumers say it is important their favorite brands support DEI.
Illustrating your commitment to diversity and DEI efforts starts at the beginning—with your company’s culture, mission, and values. Integrate diversity into the fabric of your business and promote that as part of your corporate brand. Include a DEI statement or commitment to diversity on your website and in your job descriptions. During the hiring process, show your organization’s commitment with a diverse hiring team. Finally, for existing employees, make diversity an ongoing focus company-wide, integrating it into company meetings, performance goals, and professional development.
Diversity is increasingly top-of-mind for both employers and employees, not to mention consumers. The diversity in the workplace statistics we’ve covered above should give you insight into the current issues and environment and explain some benefits of embracing diversity. It not only helps an employer’s profitability but boosts employees’ morale, retention, engagement, and decision-making.