Does working from home help with diverse recruitment?

It's pretty well established that a diverse workforce has benefits in terms of creativity and innovation, but achieving it isn't always easy, especially when organizations place a lot of emphasis on things like culture, which can inadvertently encourage homogeneity.

One of the proposed advantages of working remotely was that it would increase the diversity of the workforce by making work more accessible to busy parents, the disabled, and others who are marginalized by on-premise, 9-5 work.

A recent study from Wharton explores whether this is actually the case. The researchers examine whether tech firms offering remote work to candidates resulted in a more diverse pool of applicants for job vacancies.

The researchers analyzed a few thousand job postings made for technical and managerial positions. They found that when those jobs moved from on-premise to remote during the pandemic, they received 15% more female applicants and 33% more from minority groups.

While the study honed in on tech startups, the professors emphasized that the findings apply to leaders in various industries. This is particularly pertinent as they grapple with the twofold task of enhancing workforce diversity and navigating the choices between remote, hybrid, and in-person work setups.

They teamed up with AngelList Talent, now Wellfound, a platform for budding startups. They looked at data from around half a million STEM job ads between 2018 and 2022. That's two years before and after the COVID-19 shutdowns in March 2020. This specific period helped them focus on jobs where the only change was whether they could work remotely or not.

Boosting diversity

So why does remote working help to boost diversity in the workforce? The researchers propose three main reasons, all of which revolve around particular types of flexibility.

The first of these is time flexibility, with remote work often disconnecting when we work as well as where we work. Instead, the emphasis is more on whether the work gets done. This can afford remote workers flexibility around their schedule so long as they maintain their productivity. This can be especially valuable for people with caring responsibilities and has shown to be highly valued by working women, for instance.

The second form of flexibility revolves around where we do work. Location flexibility is a natural byproduct of remote work as you untether work from a particular workplace. This has been shown to be particularly valuable when an employer is in an expensive city or even an expensive part of town, as it opens up recruitment to people generally unable to afford to live there.

The final kind of flexibility that remote working offers is face-to-face interaction. This may seem somewhat tangential, but the researchers believe that minorities often face workplaces full of microaggressions and other forms of discrimination, so limiting the amount of exposure to such an environment can be highly attractive. Obviously, the flip side of this has been oft-noted and can hamper the career progression of remote workers, but in the short term, it can be attractive nonetheless.

The value of flexibility

As well as encouraging a greater diversity in applicants, the researchers also found that applicants across the board valued the flexibility afforded by remote work a great deal. Indeed, on average, applicants were happy to concede around 7% of their income if it meant they could work remotely.

“You can think about that as another perk, just like your health insurance or vacation days,” the researchers explain. “Having remote work turns out to be thought of as an amenity or a job benefit for which we could calculate using our data.”

While the research isn't intended to be exhaustive or to address all of the various aspects associated with remote work, the researchers believe it nonetheless highlights one of the benefits of offering it at a time when most organizations have diversity, equity, and inclusion initiatives.

“If we pay attention to the reasons why women and underrepresented minorities are drawn to remote work, we do think that this is fairly applicable for a pretty wide swath of skilled jobs,” the authors conclude. “These are also the areas that are growing in our economy. We are projected to have a shortfall of STEM workers, and the competition for talent is strong.”