People tend to choose businesses that are more diverse in their workforce according to a study.
In August of 2020 In August 2020, the Securities and Exchange Commission announced the new rule that required public companies to make available the existence of “human capital resources” material in their business. The rule left it up for the individual company to decide exactly what this meant.
Jung Ho Choi, an assistant professor of accounting at the Stanford Graduate School of Business was intrigued to find out what companies might take the rule as an opportunity to provide more information regarding the different workforces they employ. He was surprised by what he discovered.
In the six months that followed the law was put into effect only one-fifth of public companies reported metrics on the gender of their employees in their ranks or ethnicity in annual filings for the SEC. “Only 17% of the companies disclosed this information,” Choi states. This made him think about what prospective employees think about the absence of diversity information. “I thought, ‘Let’s take a step back and ask: How much do people value this information?'”
Choi recently addressed this issue by conducting a field study employing online job postings. The results show that the majority of people seeking work are concerned about the demographics of potential employers and diversity. Indeed, the majority of them are so concerned about it that they’re willing to give up a higher wage in order to join an organization that is more inclusive. The results are presented in a study by Choi and Joseph Pacelli. Choi co-authored with Joseph Pacelliopens in the New window at Harvard Business School, Kristina Rennekampopens in a new window at Cornell in a new window of Cornell University, and Sorabh Tomaropens in the new window of Southern Methodist University.