Fact check: Why wouldn’t you simply hire on merit instead of race and gender if you want the highest company profit

1. Summary of the results

The original statement suggests that hiring based on merit alone is the best approach to achieve the highest company profit. However, analyses from various sources indicate that this approach may not be the most effective. For instance, diverse teams are found to be more profitable, with a 39% higher profitability than less diverse teams ^[1]. Additionally, companies with diverse leadership teams are 39% more likely to outperform their peers ^[2]. This suggests that diversity and inclusion (DEI) are essential for business success, and that hiring based on merit alone may not be enough to achieve diversity and inclusion goals ^[3]. In fact, a thoughtful approach to DEI is necessary for a meritocratic system to work ^[4]. The importance of DEI is further emphasized by the finding that companies with diverse leadership teams report higher revenues from innovation and are better equipped to adapt to changing market conditions ^[5].

2. Missing context/alternative viewpoints

A key point missing from the original statement is the importance of recognizing and addressing systemic inequalities to achieve true meritocracy ^[4]. Furthermore, the statement overlooks the potential consequences of the Supreme Court's affirmative action ruling on the job prospects of candidates of color, which could limit the pipeline of diverse candidates for companies ^[6]. Alternative viewpoints, such as the shift from DEI to MEI (Merit, Excellence, and Intelligence) in corporate America, highlight the criticism that MEI may reinforce existing inequalities and overlook the importance of diversity and inclusion ^[7]. It is also important to consider the potential risks of neglecting DEI, including declining financial performance, reduced employee engagement, and increased turnover ^[5]. Moreover, the business case for diversity is growing stronger, with a statistically significant link between diverse boards and executive teams and higher holistic-impact scores, including environmental and social measures ^[2].

3. Potential misinformation/bias in the original statement

The original statement may be based on a misconception that merit-based hiring and DEI are mutually exclusive, when in fact, a thoughtful approach to DEI is necessary for a meritocratic system to work ^[4]. This framing may benefit those who want to maintain the status quo and avoid addressing systemic inequalities, but it may not be in the best interest of companies that want to achieve true meritocracy and business success. Additionally, the statement may be overlooking the importance of inclusion, which is essential for creating an environment where diverse teams can thrive, leading to increased innovation, talent retention, and ultimately, higher profits ^[1]. The statement may also be ignoring the potential consequences of the Supreme Court's affirmative action ruling, which could limit the pipeline of diverse candidates for companies and make it harder for them to achieve their diversity and inclusion goals ^[3]. Overall, the original statement may be based on a narrow and outdated understanding of what drives business success, and may not take into account the growing body of research that highlights the importance of DEI for business performance and profitability ^[5].