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We all know there are lots of things that small businesses do better than big ones. However, I was a bit surprised to find that one of those things is hiring a diverse workforce. A new study by the Small Business Majority reveals that, overall, small businesses are doing a great job of hiring ethnically diverse entry-level employees.

Small-business hiring practices are important, because small businesses account for 99 percent of U.S. businesses, and about 56 million employees. Here's some of what the study found:

Seven out of 10 small businesses surveyed have at least one female employee, 24 percent employ at least one Hispanic employee, and 18 percent have at least one African-American employee on staff. In addition, 8 percent employ at least one employee with a disability, 6 percent have at least one American Indian or Alaskan native employee, and 5 percent employ at least one Asian or Pacific Islander employee. About one-fourth report they also have at least one other non-white employee.

These stats are especially impressive considering that the majority (74 percent) of respondents are located in rural or suburban areas, and that 88 percent have 10 or fewer employees. In general, the larger a small business is, the more likely it was to have a more diverse workforce, the survey found.

But there's still some room for improvement. The statistics above reflect entry-level employees only; when it comes to upper-level workers, staffs are less diverse. Among the staff beyond entry-level, 35 percent are women, 9 percent are African-American, 8 percent are Hispanic, 6 percent have a disability, 2 percent are American Indian or Alaska natives, 1 percent are Asian Pacific Islanders, and 6 percent are members of another non-white minority group.

Why is increasing hiring diversity important?

Incorporating different kinds of people into your team gives you broader perspectives on everything from marketing and management to new product or service ideas. It's human nature to feel comfortable with those who are similar to us, so it's commendable that so many entrepreneurs are already hiring relatively diverse teams.

Ethnicity and gender aren't the only types of diversity we should be considering. Hiring employees in different age groups, from Gen Z on up to seniors, can also help your business gain depth and profit from different generations’ different skills and outlooks. I was also happy to see that employees with disabilities are represented in the survey, as these individuals often struggle to find employment. More and more big companies are recognizing the value that employees with all types of disabilities can bring to the table. For example, SAP and Microsoft have both started programs to recruit employees on the autism spectrum, whose special skills are often a great fit with technology work.

Nearly one-third (29 percent) of small business owners in the survey say they plan to increase the diversity of their upper-level employees in the next few years. How can you join them?

  • Look beyond your traditional sources of job candidates. Make it a point to reach out to people outside your general social circle and to share job openings on sites or with organizations that cater to minority, female or disabled workers. If you normally only recruit entry-level employees from local colleges, consider reaching out to organizations that cater to stay-at-home moms or retirees — both of these demographic groups are often seeking part-time employment
  • Encourage employees on your team to recruit their friends and acquaintances. Diverse entry-level employees who reach out to others in their social circles will likely bring more diverse job candidates into your orbit.
  • Consider recruiting outside your immediate local area. For example, since urban areas are often more diverse than rural or suburban locations, you may want to reach out to nearby cities if you're seeking a more diverse pool of job candidates.

America has always been a melting pot, and today it's becoming ever more diverse. Just as diversity is our country's strength, so too can it strengthen your small business.

Something else that can strengthen your small business: getting consulting and advice from SCORE. SCORE’s experienced mentors are a diverse group, and you can find someone in their ranks to help with whatever small business issue you’re facing. Visit the SCORE website to learn more.  

About the Author(s)

Rieva Lesonsky

Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship and SmallBizDaily.com.

CEO, GrowBiz Media
Diversity