Diversity Factor: 4 Reasons Inclusion Should be Your Top Priority in 2020
Let’s be honest: when asked to describe the world of insurance, “diverse” is probably not the first word that comes to mind. In fact, it might be the last. According to recent research from PWC Global, 80% of survey respondents working in insurance businesses believe that, although their employers talk about prioritizing diversity, the reality is that equal opportunities for advancement and pay largely don’t exist for anyone who doesn’t identify as a white male.
As a result, businesses are failing to attract and retain diverse talent who can contribute invaluable insight and perspective. Furthermore, a large percentage of the current insurance workforce is aging into retirement, leaving a fractured industry behind. If programs and infrastructure existed to support the growth and advancement of minorities, women, LGBTQ+, and other underrepresented groups in insurance, this succession plan would flow perfectly. However, the facts speak for themselves: female insurance professionals hold a mere 6% of CEO roles, while Black, Hispanic, and Asian professionals make up just 3% of insurance agency executive positions.
Although the insurance industry has made significant strides towards implementing diversity and inclusion initiatives compared to 20 years ago, room for improvement clearly remains.
These days, diversity and inclusion are no longer moral or social obligations that are simply pasted on company marketing materials and promptly forgotten thereafter. Increasing evidence demonstrates that a diverse workforce of individuals with different skill sets, cultural backgrounds and unique experiences is the key ingredient to a successful business of empowered employees ready to take on the changing tides of the insurance industry — together.
Here are 4 reasons that a balanced workforce which accurately reflects the global population offers a truly unique advantage in today’s ultra-competitive marketplace:
- Talent: As the current generation of industry veterans begins to retire, the focus has shifted towards talent acquisition and retention. Employers are quickly realizing that millennials value a company’s Diversity and Equality policy nearly as much as their potential salary. In fact, 87% of millenial job candidates report that inclusiveness is one of the primary factors they consider when evaluating a potential employer.
- Performance: Simply put, diverse teams provide better solutions. Although it may seem counterintuitive — one might expect that a homogeneous group would make decisions quickly and easily — multiple studies have proven that a diverse group is more innovative, analytical, and produces more effective strategic solutions than their homogeneous peers.
We can reasonably expect a group of similar people with similar backgrounds to come to generally the same conclusion or solution every time, as each individual in a homogeneous group supports and reinforces the opinions shared by the collective. This is an alarming wasted opportunity for innovation, expansion, and fresh ideas.
By contrast, individuals within a diverse group must consider the opinions of people with different perspectives shaped by their own individual life experiences. Case in point: a McKinsey & Co. study concluded that companies with ethnically diverse executive boards are 35% more likely to outperform their peers and competitors. Why? A group of individuals with diversified backgrounds will bring their own unique experiences and perspectives to the table to guide the decision-making process. This improves the work experience of each individual and the quality of the outcomes their team produces.
- Changing Landscape: It’s estimated that by 2045, caucasians will make up 49.7% of the US population, Latino Americans 24.6%, black Americans 13.1%, Asian Americans 7.9%, and multiracial populations 3.8%. We can also expect that American women will outnumber men by the year 2024; data suggests there will be 173.9 million women and 167.08 million men. In addition, minority-owned companies are increasing at a 70% rate year-over-year, and 9.1 million American firms are owned by women.
As population demographics change, so does the landscape of American businesses — and the nature of their insurance needs along with it. In order to best serve the customer, insurance industry professionals must be able to provide both representation and comprehensive support, understanding their client’s perspectives and interests in order to stay relevant.
- Expansion: A diverse workplace of individuals with different life experiences and backgrounds offers connections and new opportunities to expand your business in endless directions. When you focus on hiring employees with in-depth knowledge of different cultures, markets, and language skills, you open your business up to a world of possibilities — pun intended.
Whether your goal is to develop more effective internal solutions for your team or create new business opportunities across the country, insurance professionals who understand the value of harnessing the diversity advantage will reap the benefits in their own business, creating a positive ripple effect around the globe.