The diversity industry is bad for business
The more woke a company is, the fewer minorities want to work there.
‘A more diverse business is a more successful business.’ This has been the mantra of HR managers, business-school professors, CEOs and the Wall Street Journal for several decades now. The ‘business case for diversity’ is that companies whose staff represent a range of different identities are more profitable than those that employ only old white men. In other words, it makes financial sense for businesses to get on board with equality, diversity and inclusivity initiatives.
The argument that diversity equals profit is everywhere. ‘Diversity can widen and deepen the client base, support innovation and improve profitability’, states the Solicitors Regulation Authority. The ‘Big Four’ global accountancy firms all echo PricewaterhouseCoopers’ claim that ‘diverse businesses create better business returns’. Drinks company Diageo claims to promote staff diversity ‘not just because it is the right thing to do’, but also ‘because it is good for business’. Even charities now make the business case for diversity.
There’s just one problem here. There is astonishingly little basis to the claims that profit and diversity are linked. As a piece in the Harvard Business Review pointed out in 2020, ‘there is no research support for the notion that diversifying the workforce automatically improves a company’s performance’. Even those studies claiming to show that companies employing more minorities will enjoy an increase in revenue can find no causal link between diversity and profit. This should not surprise us – neither skin colour nor genitals determine business acumen. It is precisely for this reason that companies should focus on hiring the very best people for the job – irrespective of their identity.