Diversity important for companies to attract jobseekers
Jobseekers see diversity as a quality in companies they are looking at. They are willing to forego more than one thousand US dollars in wages to work at a place with a more diverse employee base, according to a study published by Stanford Graduate School of Business.
Disclosing diversity scores when posting vacancies increased the click-through rate for firms with higher diversity scores by 3%. The participants were more responsive to a 1% change in diversity scores versus a 1% change in median salary, the study shows.
It also shows that younger entry-level workers appear most concerned about diversity information. Women and people in regions with “more extreme attitudes toward diversity issues” (as indicated by Black-Lives-Matter activities) were also more apt to click on companies with higher diversity scores.
Jung Ho Choi, assistant professor of accounting at Stanford Graduate School of Business, led the study and has written a report together with Joseph Pacelli, Harvard Business School, Kristina Rennekamp, Cornell and Sorabh Tomar, Southern Methodist University.
The US Securities and Exchange Commission (SEC) has set up new rule requiring public companies to disclose any “human capital resources” material to their operations.
After six months, less than one-fifth of public corporations had published metrics about employees’ gender or race in their annual reports to the SEC. Only 17% of the companies disclosed this information.
Choi told Stanford University News the research might be a wake-up call for employers and the policymakers who set disclosure rules about diversity.
“83% of the firms seem to believe that diversity information is immaterial, yet our experiment finds a non-trivial willingness to pay for this information. They may want to change their behaviour. Jobseekers care about diversity and companies could put more effort into disclosing it.”
Choi says the team focused on workplace diversity because of the growing recognition of the importance of human capital — the economic value of all the experience, skills, and knowledge people bring to their jobs. Social movements like Black Lives Matter (BLM) and Me Too have brought attention to the recruitment and retention of people of colour and women.
The research team worked with job site Zippia that gives hiring companies a diversity score based on their employees’ race, gender, education, and language skills.
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