The life sciences industry has gained notoriety for its lack of diversity and inclusion at the leadership level.
At the executive level, gender-wise, most teams for the top life science organizations are mostly dominated by male leaders. Approximately 20% of the entire C-Suite in the life science industry are women, and even less than that being elected to serve on the board of directors.
For racial diversity, people of color are severely underrepresented in life sciences. In a study by Nature Biotechnology, conducted in 2017 on the racial makeup of the industry, it was reported that African Americans represented 3% of the executive positions, and Latinos/Hispanics 4%, while only accounting for 2% of seats at the board.
The gap in diversity leadership is also present in industry startups and small businesses in life sciences. The importance of implementing diversity tactics in recruitment strategy in the life sciences industry is for the purpose of growing the industry as studies show that diversity has a positive impact on business performance and could potentially steer the industry in the right direction.
Diversity in executive leadership allows the space for different opinions and leadership perspectives to be made present in the opportunity for business growth and solutions. In life sciences, this can lead to a positive effect on technology and the health outcomes for patients.
According to a report from The Wall Street Journal titled The Business Case for More Diversity, the 20 most diverse companies in rankings have an average operating profit margin of 12%, compared with 8% for the lowest-ranking companies. The operating profit margin represents the profit that a company generates from its core business before interest and tax as a percentage of sales. In addition to more diverse companies having better operating profit margins, their shares also typically outperform the companies with lower levels of diversity.
In another study from the Boston Consulting Group on how diverse leadership teams boost innovation in their respective industries, it was noted that increasing the diversity of leadership teams leads to more and better innovation and improved financial performance in both developing and developed economies. In fact, companies start generating gains as soon as they make relatively small changes in the overall makeup of their senior and executive-level teams. Also in this study, which was conducted at 1,700 companies across 8 different countries, companies that reported above-average diversity on their management teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity (45% compared to 26%).
In a report from McKinsey & Company titled Delivering Through Diversity, the company’s research reinforced and reiterated the link between diversity in leadership and the financial performance of a company. Within this source, there were findings that further explained the reason why diversity is the answer to business growth. Here are some of the findings.
1. Companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to perform higher than their peers in profitability, suggesting the need for inclusion across race and gender.
2. Diverse companies are better equipped to attract top talent in the industry, make better decisions as a firm, and improve employer branding.
3. The highest-performing companies had more women in roles that are directly advantageous to the growth of the organization than in staff roles on their executive teams.
Diversity will become increasingly important with population growth. Data suggest that the US will see an increase in the proportional populations of minority groups (African American, Latino/Hispanic, and Asians) in the years to come. It was predicted that by the year 2065, minority groups will represent over half of the population in the U.S.
In the current technology boom that we are experiencing, the industry has been slow in moving towards tech and innovation in the same way as biopharma and the medical device industry. Although there have been new innovation in the products within the industry, the same is not shown within the business and leadership aspect.
Tackling situations such as gender and racial inequality simultaneously bring intersectionality to the workplace. In linking diversity to your business’s strategy of growth, effectively tailoring your efforts to your niche within the life sciences industry from upper to middle and lower management will have a direct impact on business growth. In order to win over your industry, partner with a life science recruiting firm that understands the need for hiring diverse talent to inherit growth and greater company performance.