Corporate diversity programs don't work, and a new study shows why

Source: Shutterstock
Source: Shutterstock

It's no secret that industries ranging from finance and government to technology and the arts remain stubbornly homogenous despite an increasingly diverse country

Companies have been aware that this lack of diversity comes with a price tag for some time. 

In the last 15 years, Merrill Lynch (now Bank of America Merrill Lynch) has paid out nearly $500 million to settle lawsuits related to either racial or sexual discrimination. Diverse workplaces are also more productive and profitable, according to separate reports from both McKinsey and MIT

Despite the ethical and monetary costs of failing to become more diverse, little has improved. In 2016 the percentage of CEOs of Fortune 500 companies who were women actually declined. From 1985 to 2014, the proportion of black men in management has improved by just three-tenths of a percent.

An interesting new study from researchers at MIT and Northwestern published in the Journal of Personality and Social Psychology is shedding light on why so many diversity initiatives fail.

"The big problem is that most people think, 'Do we have some sort of program? Are we talking about diversity at all? If we are, we can check the box and just move on,'" Evan Apfelbaum, one of the authors of the study, said in a Wednesday phone interview with Mic

Merrill Lynch has paid out nearly $500 million in discrimination settlements dating back to before it was absorbed by Bank of America.
Source: 
Richard Drew/AP

Unsurprisingly, employees from different backgrounds have different perspectives, experiences and preferences that influence how receptive they are to these programs.

The study first determined that there were two common approaches to these diversity initiatives, and then looked at 151 different law firms to determine how effective they were at reducing attrition.

Apfelbaum explained that the first approach is about celebrating and calling attention to everyone's differences, effectively saying that a diverse set of experiences and backgrounds is part of what makes a company great. 

The second approach stresses equality, that everyone is at the company because they all put in the hard work and are now part of a common entity. 

Researchers found that whichever approach respondents preferred had a lot to do with how well their group was represented. If you were in a minority, but a relatively large minority — for instance, if you're a white woman in a company that's at least 40% women — emphasizing and celebrating everyone's differences was found to reduce attrition.  

However, if you're in a smaller minority — less than 5% — then the opposite was true. Emphasizing equality reduced attrition, and celebrating differences actually increased it.

There's a sad reason for this. 

"If you're someone who's worked tooth and nail to get there, and you're the only black person in the room — [the first approach] feels like you're giving everyone a reason for you to be there in the first place," Apfelbaum said. 

In other words, "celebrating everyone's differences" backfires if you don't have enough employees from different backgrounds.

While the study won't be exactly news to women and people of color who have endured ineffective diversity messaging in the past, they do create a much-improved blueprint for companies to begin doing better. 

Ariel Lopez, founder of 20/20 Shift, an organization that works to make the tech industry more inclusive and diverse, said she agrees that companies pay lip service to diversity but fall short when it comes to inclusion. 

"Diversity means something different to everyone," she said. "From my conversations, many people think it means bringing more women into the space, or bringing more black people into the space, or bringing LGBT people into the space, but no one really thinks of it as a holistic solution." 

Lopez said that to truly attract diverse talent, companies need to be more strategic about the ways they promote and empower the employees they already have.

"Your own diverse employees are your front line," she said.

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James Dennin

James is a staff writer covering money and millennials. Send your tips and your money problems to jdennin@mic.com.

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