Diversity pays – both economically and socially

Economic sustainability was long the most important pillar of the sustainability concept. With the popularity of diversity management, the social aspect of sustainability is also becoming increasingly crucial. It so happens that companies that are socially engaged gain economic advantages and have access to a wider talent pool. Economic and social sustainability are thus tightly interlinked.

Up to 49’400 Swiss francs – according to the Federal Bureau of Statistics, this is how much it costs to educate a student in Switzerland for one year. If it takes five years to earn a higher degree, this results in costs of up to 247’999 per student.

Nowadays, about half of these well-educated people are women. Yet, usually for family reasons, it is still the case that many women take a break, reduce their employment percentage, and/or hold positions below their qualifications. In short, the government and by extension Swiss tax payers pay a lot of money for education and training that is not fully utilized in the end. The economic cost is enormous – especially in times of skills shortage. Yet, there are some concrete steps that can be taken to begin addressing this issue.

Companies are desperate for qualified, skilled employees. Yet, they tend to overlook the obvious. For instance, employees who can only work 90% or less simply move off companies’ radars as high potentials for future development. They are only used for simple tasks and responsibilities below their qualifications. How can companies change this behaviour? An analysis of the status quo is worthwhile here. The St.Gallen Diversity Benchmarking analyses companies along the entire HR process: Who applies? Who is hired? Who is promoted? Who leaves the company? Do all employees have the same likelihood to attain a management position? These kinds of questions are evaluated on the basis of various diversity dimensions such as gender, language, position in the company, nationality, employment percentage, age etc. With a comprehensive report and concrete, actionable recommendations, companies can implement improvements to counteract the skills shortage. With targeted measures (such as top sharing, part-time in leadership positions, unconscious bias trainings for managers etc.) companies can increase the share of women in leadership positions, decrease turnover and become more attractive for a wider pool of specialists – the keyword is “employer branding”.

On the other hand, employees also need to change their way of thinking. In Swiss culture the norm prevails that men take on the role of bread winner and women take care of the kids as soon as they become mothers and consequently reduce their working hours. Couples often forget that women are disadvantaged when it comes to pension funds. If women work at a higher percentage, this can lead to a power balancing within the relationship, i.e. both partners contribute equally to the household income so that no one-sided dependency relationship develops. Such dependencies are particularly problematic if a couple gets divorced and the woman has to find a new job.

Equal opportunities and more diversity and inclusion thus not only promote social sustainability but also economic sustainability. From the individual’s point of view, opportunities and duties are divvied up more fairly. Women ensure their occupational pension provision and their income. Companies can better utilize the potential of already existing specialists and leaders and thus protect their economic success. The economy as a whole takes full advantage of the invested educational resources and profits from higher tax revenues and secured economic growth. Social and economic sustainability go hand in hand – for the good of everyone.