Economics Professor Wally Mullin finds that co-ed workplaces can boost profits.
When men and women work together on teams, it’s better for business, says a recent study about gender diversity in the workplace. The flip side? It’s not so good for employee satisfaction or morale.
Researchers at the George Washington University and the Massachusetts Institute of Technology looked at eight years of data from a firm that operates offices in the United States and abroad. The firm provided employee survey data as well as office-level measures of diversity and performance from 1995 to 2002. The offices ranged in size from just a few employees to nearly100 at its headquarters and included some same-sex sites.
Advocates have long argued that recruiting from a diverse pool of applicants leads to a more qualified, creative and innovative workforce. But this study, published in the Journal of Economics and Management Strategy, suggests that gender diversity also can dramatically improve a company’s bottom line.
“Gender diversity in an office improves office performance significantly,” said Wally Mullin, an economics professor in the Columbian College of Arts and Sciences who co-authored the study with MIT economist Sara Ellison. “Our results suggest that going from either an all male or all female office to an office split equally would be associated with a revenue gain of 41 percent.”
Battle of the Sexes
However, both sexes seem to prefer working in homogenous groups.
In addition to measuring the effect of gender diversity on performance, Dr. Mullin and his colleagues studied how it influences “social capital,” or the benefits derived from cooperation between individuals and groups.
On surveys, male and female employees reported higher levels of job satisfaction and thought their offices were more cooperative when they worked primarily with colleagues of the same sex.
While it may seem paradoxical that an uncooperative workplace would be more productive, “well-run workplaces establish procedures to ensure that the culture isn't too toxic,” Dr. Mullin explained.
“We model individual output in a firm being determined by individual effort but also by the cooperative effort of others in the firm,” he said. “So both contribute to productivity.”
Interestingly, the researchers found that employees appeared to value the idea of diversity more than diversity itself.
Employees who perceived their workplaces to be more “accepting of diversity” also gave high marks for cooperativeness, even if their offices were actually homogenous.
“There is a distinction between a company that provides an environment accepting of diversity and one that has diversity,” the study says. “The employees seem more cooperative (and more satisfied overall) in an environment supportive of but lacking in diversity.”