Many companies with Diversity, Equity, and Inclusion (DEI) strategies want to build a better workplace — one where everyone gets to contribute. While organizations examine diversity through the lenses of gender, sexual orientation, and race, socioeconomic status can too often become the “hidden” part of diversity.
In 2020, for example, DiversityIns released a “Top 50 Companies for Diversity” list of organizations with very impressive strategies for promoting diversity in the workplace. Not one mentioned social class in their efforts.
One reason companies may not be thinking about socioeconomic status is because it can be a taboo subject in America. Many people are taught from a young age to never ask strangers about religion, politics, or money. The conversations rarely go in positive directions. Sociologist Paul Blumberg goes even further, calling class “America’s forbidden thought.”
Even if the idea of socioeconomic status might not be a comfortable one, it is essential. Inequality exists in society and in the workplace. It is only by addressing it and by including all workers that we can start creating true equity and inclusion through diversity.
What is Socioeconomic Diversity in the Workplace?
Socioeconomic status refers to the perceived status of a person, which is based on a number of factors:
- Their job & the perceived prestige of that job
- Their education
- Their income
- Their place of residence
- In some cultures, their nationality or religion
Socioeconomic status can determine social class, seen as the culture or group belonging that comes with its own socialization norms, expectations, and community membership. Children, for example, are associated with the social class of their family of origin. They might learn specific expectations or patterns of behavior from their household.
In the workplace, socioeconomic diversity is about having workers from all types of socioeconomic backgrounds at different levels of the organization, including leadership. Diversity of this kind means workers at all levels in a company have different levels of education, live in different communities, and come from different levels of wealth.
Facts About Socioeconomic Diversity in the Workplace
Whether companies acknowledge it or not, class systems exist in our society, and that gets reflected in the workplace. Let’s look at some of the numbers:
- 63% of Americans live paycheck to paycheck, & 76% of workers earning less than $50,000 annually live paycheck to paycheck.
- Workers with lower socioeconomic status are 32% less likely to advance to managers when compared with workers with more affluent backgrounds. They are also more likely to experience health problems & leave the workforce prematurely.
- Workers from lower socioeconomic backgrounds are likely to take longer—an average of 3 months — to get a promotion when compared with those from affluent backgrounds, who took an average of 15.2 months to get promotions.
- Workers currently in a lower socioeconomic position pay more for just about everything in their lives. Everything from bank fees for overdrafts & for lower-balance accounts to a lack of access to financial products & resources can mean workers pay more when they earn less. This can create a cycle that’s difficult to escape.
- Socioeconomic status is often intersectional, so by addressing equity for all classes in the workplace, organizations can help build equity for more workers. Studies show that people living with a disability, for example, are almost twice as likely to live in poverty when compared with Americans who do not live with a disability. 3% of Black Americans are experiencing a third generation of poverty. Supporting workers of all socioeconomic backgrounds means supporting all workers.
There are many great reasons why addressing socioeconomic diversity in the workplace is important. With the majority of Americans living paycheck to paycheck, it’s important to have a variety of views. A worker who is not affluent may be able to point out when a company product might become out of reach for an average consumer or when a marketing message might alienate someone with access to fewer financial resources.
There’s also evidence that workplaces with socioeconomic diversity may do better. Companies with greater diversity report 19% higher revenues thanks to greater innovation. A study in the UK found that even a small increase in social mobility could result in a 9% increase in GDP. Socioeconomic equity makes financial sense.
Let’s take a closer look at actionable steps organizations can take to increase socioeconomic diversity:
Look for Hidden Bias
Studies conducted by the American Psychological Association found that people in a higher socioeconomic social class tended to view themselves as more capable when compared to their peers. Another study, published in Scientific American, asked people to listen to short audio clips of job candidates. Listeners were able to identify a speaker’s social class more than half the time and were more likely to say a job candidate from a high social class was more likely to get a job and more eligible for a higher salary.
DEI training can be one way to address hidden bias. This type of training can help workplaces uncover and address biased language and processes. Another important way to address hidden bias is to hire for leadership and management positions with socioeconomic diversity in mind. When team members see that a variety of perspectives are valued at the highest levels of a company, this can disrupt some unconscious bias by showing everyone can contribute.
Consider Hiring and Recruiting Practices
Consider recruiting at public universities and community colleges. A study of Ivy League Schools found that the largest group of students came from wealthy backgrounds. The cost of a two-year program at a public community college is approximately $33,524, compared to an average of $35,852 for just one academic year at a private college. By recruiting at more affordable schools, you may be able to find talent from a range of backgrounds.
When recruiting or hiring, also consider which degrees are necessary. Employers may like to see a college degree, but for some jobs it may not be needed at all. Work experience or completing inexpensive or free online courses can be an equally good indicator of a candidate’s qualifications. Putting more weight on recommendations rather than formal education can also help companies find talent.
Don’t Make It About Labels
The vast majority of Americans — 85% according to a Gallup poll — define themselves as middle class. This includes those earning over $100,000 yearly and those earning under $30,000.
While we naturally recognize that people have different access to resources, the way we all see ourselves differs. Someone with a high level of education but a current income of $20,000 per year may still see themselves as part of the middle class. Someone who came from a food-insecure household but who currently earns $100,000 may not see themselves as part of an upper socioeconomic class.
This can create a communication challenge. How can organizations create more socioeconomic diversity if most workers self-identify as middle class?
Rather than actively trying to create more diversity by hiring workers from lower socioeconomic backgrounds, it can be useful to try to recruit workers based on specific factors. For example, you may look for more non-college-educated workers or workers from non-traditional educational backgrounds. You can create paid work-study programs or scholarships for workers and students below specific incomes and then recruit from this pool of talent.
Consider Paid Internships
Internships provide needed work experience to students. They can help younger workers network and gain exposure to workplaces that may have been closed to them.
The trouble is that 43% of internships at for-profit organizations are unpaid. Students and young professionals with means of support and resources can pay for rent, food, and other necessities while pursuing unpaid internships to get experience. Students with fewer resources may need to choose between a career-advancing internship and economic survival.
By paying workers for their time, you may be able to attract a wider range of talent to your workplace.
How Can Diversio Help?
Diversio is a metrics-driven DEI solution that can help you uncover what you can’t see, from socioeconomic inequality to hidden disabilities. We gather, analyze, and benchmark data, so you can see how many people at your organization come from different socioeconomic backgrounds and what actionable steps you can take to support them and make them feel more included. We are your partner in creating measurable, meaningful diversity in the workplace.
Let’s start building real equity together. Schedule a demo to experience Diversio for yourself.