Higher growth and innovation for small businesses with increased racial and ethnic diversity, reveals new Hiscox USA diversity report
Atlanta, GA – May 10, 2022 – Nearly three quarters (72%) of small businesses in the US with moderate-to-high racial and ethnic diversity among managers and owners experienced business growth over the last two years, compared to 45% of small businesses with little-to-no racial and ethnic diversity, according to a new study released by Hiscox, the leading small business insurer. The Hiscox Diversity in Small Businesses Report also found rates of innovation were higher for businesses with increased rates of diversity.
The key findings from Hiscox USA’s research – based on a survey of 400 small business owners in the US between December 21st, 2021 and January 10th, 2022 – include:
- Small businesses with more diversity show higher growth: In the past two years, 72% of small businesses with moderate-to-high racial and ethnic diversity among managers and owners experienced business growth, compared to 45% with little-to-no racial and ethnic diversity. On average, those with moderate-to-high racial and ethnic diversity among managers and owners grew by an average of 25%.
- Small businesses with more diversity have a higher rate of innovation: Small businesses with moderate-to-high racial and ethnic diversity among managers and owners are more likely to change branding; an average of six times over the course of the business’ lifetime, compared to an average of four times for small businesses with little-to-no racial and ethnic diversity. When it comes to launching new products and services, small businesses with moderate-to-high racial and ethnic diversity among managers and owners do this an average of 24 times, compared to an average of 14 times from small businesses with little-to-no racial and ethnic diversity.
- It pays to value diversity: On average, small businesses with moderate-to-high gender diversity among managers and owners who experienced a sales increase observed a 31% increase over the past two years.
- Consumers are seeking out businesses with diversity: In the past two years, all small businesses have benefitted from increased social awareness; 62% of small businesses with high-to-moderate racial and ethnic diversity among managers and owners said it drove an increase in their customer base, and 65% of all small business owners say that they saw an increase in their publicity due to increased social awareness. Of those businesses that saw an increase, 65% say that it lasted six months or more.
- Despite the benefits of diversity and inclusion (D&I), many still do not see it as a priority: Nearly half (46%) of small businesses say improving D&I is only slightly, or not at all important, revealing there is still more work to be done on educating businesses.
“Small businesses bring vibrancy, innovation and uniqueness to our local communities,” said Regine Fiddler, Chief Marketing Officer of Hiscox USA. “The benefits of diversity and inclusion in big corporations have been well-researched and documented. However, it’s important that we also embrace the power of diversity and inclusion in small businesses, by giving them the understanding and tools to champion D&I as they grow, so that they can enjoy the unquestionable benefits it brings.”
About the Study
The Hiscox Diversity Survey was conducted by Wakefield Research among 400 US small business owners, with oversamples for 100 female small business owners, 100 African-American small business owners, and 100 Hispanic small business owners, between December 21st, 2021 and January 10th, 2022, using an email invitation and an online survey.
For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.9 percentage points for the main sample, and 9.8 percentage points for the oversamples, from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
About The Hiscox Group
Hiscox is a global specialist insurer, headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Our ambition is to be a respected insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle.
The Hiscox Group employs over 3,000 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the USA, we offer a range of specialist insurance for professionals and business customers as well as homeowners. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re & ILS. In the US, Hiscox small business Insurance is underwritten by Hiscox Insurance Company Inc., a Chicago-based insurance company.
Our values define our business, with a focus on people, courage, ownership and integrity. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscox.com.
The content provided above is provided for general informational purposes and is not intended, nor shall it be deemed, to be a solicitation of insurance with regard to any particular or specific person or entity.
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