Source: Publix Facebook page
Retailers looking to drive their revenues higher might not need to run as many sales promotions if they had a more diverse workforce, according to a study published last year in the Journal of Management.
Researchers from several universities collected data from 220 big box stores spread across 19 states in the Midwest and West. The goal was to analyze two theories of management. First, would customers responded better (spend more) because they could identify with store staffs based on race and other similarities? The second was to determine if a more diverse staff led to more creativity and problem solving in the workplace.
While the study found a correlation between the success of stores based on whether they mirrored the diversity in local communities, it also found that diversity delivers returns for stores regardless of where they are located.
“Even if the neighborhood was mostly African-American or mostly white, the stores with a diverse staff still had stronger sales,” Dr. Patrick McKay of Rutgers University and one of the authors of the report told NJBIZ. “I believe this shows that a diverse staff brings different ideas about how to serve customers more effectively, which enhances overall sales performance.”
Stores with staffs that were less diverse were hindered for two reasons, according Dr. Orlando Richard, associate professor of organizations, strategy and international management at The University of Texas at Dallas and the lead author of the report.
“Employees didn't have creativity and problem-solving skills because everyone's the same, and they can't identify with the diverse community either,” he said. “So you had two negative implications working hand-in-hand."
"As communities become more diverse, it gives companies a broader pool to select from, but that doesn't mean that a hiring manager is going to hire people who are different," Dr. Richard said. "They may have biases and continue to hire the same types of people, whether that be race, gender or age. They have to be proactive and be aware of the environment and also aware of what can be done within the company.”
- The Impact of Store-Unit–Community Racial Diversity Congruence on Store-Unit Sales Performance (Abstract) – Journal of Management
- Research shows diversity can improve stores' sales performance – EurekAlert!
- Want to Boost Sales? Hire a Diverse Team – Business News Daily
- A diverse workforce can pay off for retailers, study finds – NJBIZ.com