Gender¹ diversity in the workplace helps firms be more productive, according to a new study co-authored by an MIT researcher -- but it may also reduce satisfaction among employees. "Having a more diverse set of employees means you have a more diverse set of skills," says Sara Ellison, an MIT economist², which "could result in an office that functions better."

 

At the same time, individual employees may prefer less diverse settings. The study, analyzing³ a large white-collar U.S. firm, examined how much "social capital" offices build up in the form of things like cooperation, trust, and enjoyment⁴ of the workplace.

 

"The more homogeneous offices have higher levels of social capital," Ellison observes. "But the interesting twist is that ... higher levels of social capital are not important enough to cause those offices to perform better. The employees might be happier, they might be more comfortable, and these might be cooperative places, but they seem to perform less well."

 

More diversity, more revenue?

 

The paper summarizing the study's results, "Diversity, Social Goods Provision, and Performance in the Firm," was recently published in the Journal of Economics and Management Strategy. The authors are Ellison, a senior lecturer in MIT's Department of Economics, and Wallace P. Mullin, an economist at George Washington University.

 

The study used eight years of revenue data and survey results, covering 1995 to 2002, from a professional-services firm with more than 60 offices in the United States and abroad. The data included some all-male and all-female offices -- both of which are unusual, the researchers note -- in addition to mixed-gender offices. The survey data allowed Ellison and Mullin to study the employees' ratings of office satisfaction, cooperation, and morale⁵, not just one generalized measure of workplace happiness.

 

Among other results, the economists⁶ found that shifting from an all-male or all-female office to one split evenly along gender lines could increase revenue by roughly 41 percent. To see how this could happen, Ellison suggests an analogy with a baseball team.

 

"A baseball team entirely⁷ composed of catchers could have high esprit de corps," Ellison says, noting that a band of catchers could share experiences, equipment, or tips for handling knuckleballs. "But it would not perform very well on the field."

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