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Study: Gender diversity is good for business and bad for workers' happiness

Those smiles are fake. These two can't stand working together.
Those smiles are fake. These two can't stand working together.

Think about your workplace (or if you're at your desk, look around): are there equal numbers of men and women? If so, congratulations: your workplace is more likely to be profitable than if you were all-men or all-women. Also, sorry: chances are, you and your coworkers are all less cooperative and more unhappy than you could be.

Or, at least that's what a new study seems to say. Researchers at MIT and George Washington University studied a group of workplaces over eight years and found that workplaces with more equal numbers of men and women were more successful and had lower cooperation and morale levels than their counterparts. Here's a look at what they did and what they learned:

The question

MIT economics Professor Sara Fisher Ellison and GWU economics professor Wallace Mullin wanted to know about the intersection of two effects that diversity might have in workplaces: on social goods like trust and cooperation but also on productivity and profitability. In studying diversity, they zeroed in on particular on gender and tenure — how long employees have been at a firm.

How they tested it

Ellison and Mullin obtained eight years' worth of individual-level employee survey data from an young professional services company that operates more than 60 offices both in the US and in other countries. Those offices represented a wide spectrum of gender diversity, from women-dominated to men-dominated.

That survey data, aside from capturing basic demographic statistics, also asked employees four key questions about their workplaces: how open they perceived their offices were to diversity, their satisfaction with their jobs, how cooperative their workplaces were, and what morale was like.

What they found

Ellison and Mullin looked at the correlations between gender diversity and the factors related to workplace well-being — satisfaction, morale, and cooperation — and they found that more gender diversity was associated with lower levels of all three of those things, to varying degrees. It's worth noting, however, that those degrees aren't necessarily huge swings.

"Moving from an office evenly split between men and women to either an all-male or all-female office, ... would increase cooperation about one-sixth of a point on a 5-point scale," they write.

In addition, workplaces that employees tend to think are accepting of diversity also tend to have workers that are more cooperative, more satisfied, and who have higher morale.

The researchers also found a huge effect in the area of gender diversity and performance — moving from an all-men or all-women office to an evenly-split workplace would be linked to a 41 percent bump in revenues.

What it means

The fact that gender-diverse workplaces are less happy, while employees tend to cooperate better at workplaces that are more accepting of diversity, might at first seem to be contradictory, the authors note. However, there could be two explanations: One, that employees interpret diversity as being about more than gender and tenure, and they feel their offices are accepting in that way. But the authors settle on a more cynical explanation:

"The employees seem more cooperative (and more satisfied overall ... ) in an environment supportive of but lacking in diversity," they write.

Diversity sounds great, these people may be thinking, in other words, just not at my office.

There's also something counterintuitive going on in the happy-but-unsuccessful firm and its unhappy-but-high-performing counterpart. Worker well-being may be important, but it doesn't seem to be strongly tied to performance for these workplaces.

Though the results are compelling, they're also hard to broaden out to the rest of the business world, as they are focused on one company. In addition, the study raises a few intriguing questions that might help explain more about this — for example, whether the women or the men were more unsatisfied with more diverse workplaces. The authors also note that the study doesn't necessarily prescribe that an office change its lineup immediately, since all that expensive hiring and firing could negate the effects that a more equal workplace was intended to create.

Plus, this all rests on the idea of there being two genders. And finally, if you consider other gender identities, the whole thing gets way, way more complicated.

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