Diversity in the workplace is a hot topic…but have you ever stopped to wonder why that is?
It’s not just a “good idea” or “something you should do” …we’re at a point in history where it’s mandatory for businesses who want to survive the rapid changes taking place in our world.
And we’re not just talking businesses with a global reach…small local businesses and companies who are only national in scope can experience the advantages of diversity in the workplace within their own organizations.
Benefits of diversity in the workplace
It’s just common sense…when you put individuals with different worldviews together, you’re going to get a wide variety of ideas for solving problems or finding new, more efficient ways of doing things.
However, beyond the “common sense” factor, research backs this concept up.
One McKinsey study found that “Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians.”
Think about what this could mean for your business.
Advantages of diversity in the workplace
Having a diverse workforce gives you the ability to meet your customers’ needs and desires.
As an example, the global toymaker Mattel Inc. said, “We understand that a culture rich in diversity is key to business success. It allows us to better understand the business opportunities in various markets around the world, and develop products that resonate with consumers in diverse cultures.”
Put more simply, Mattel’s commitment to diversity allows them to be innovative in creating products that appeal to a broader, global marketplace.
In turn, this helps them to remain a leader in their industry.
A diverse workforce can help you connect with audiences you’ve not thought of before in a real and effective way.
For example, as of 2016 disabled Americans comprised one out of every four people. And according to the American Institutes for Research, “the total disposable income for working-age people with disabilities is about $490 billion.”
If you employ disabled individuals, you have a powerful resource within your organization that can help you reach this undeserved population.
How does diversity help the workplace?
Reduce employee turnover
- A Glassdoor survey found that “57% of people think their company should be doing more to increase diversity among its workforce”
- A Deloitte University study reports that “83% of millennials are actively engaged when they believe their organization fosters an inclusive culture, compared to only 60% of millennials who are actively engaged when their organization does not foster an inclusive culture.”
As millennials make up a sizeable portion (two-fifths) of the working-age population, they have a massive influence on the ways that companies (who want to thrive) need to think about doing business.
Therefore, it stands to reason that smart businesses need to purposely seek to fill their ranks with diverse employees if they want to compete in the marketplace both now and in the future.
Research published by the Harvard Business Review reported that “…people like to fit in, so they are cautious about sticking their necks out. When we have a strong, homogenous culture, we stifle the natural cognitive diversity in groups through the pressure to conform.”
Therefore, diversity in the workplace can lead to creativity in resolving problems as well as creating new products and services.
In fact, a study found that diverse teams “were [sic] shown to make decisions faster than individual workers, and benefitted from a 60 per cent improvement on decision- making.”
When you create a culture of acceptance, each individual is empowered to bring everything they’ve got to work…nobody is afraid that their point of view will be dismissed so they can each confidently share their ideas with the team.
A diverse team can help you compete in the global marketplace.
If you have employees who speak more than one language and/or understand other cultures you have an advantage over companies with a homogenous workforce.
The co-founder and CEO of Wattpad, Allen Lau, once shared how diversifying their workforce helped the company to grow quickly. He said, “In the early days of our business, my co-founder Ivan and I searched for a way to kick start our audience growth. It was painfully slow until we made the decision to support additional languages on our app. Luckily, we had worked with people who lived in these countries who could provide the insight we needed to strengthen our product.”
Having a diverse team of individuals with a variety of different cultural backgrounds can help you secure your place in the global marketplace.
More and more potential employees are focused on diversity as a metric for deciding to work with a company. A 2014 Glassdoor survey found that “two-thirds (67 percent) of those surveyed say a diverse workforce is an important factor when evaluating companies and job offers.”
Obviously, then, it makes good business sense to highlight your commitment to a diverse workforce when posting job listings and everywhere your brand is seen.
Your customers want to feel heard and appreciated. If you have a diverse workforce, you likely have employees who may be able to offer solutions that better fit the needs of your customers.
The confidence and trust built between your workforce of diverse individuals and your customers can lead to not only repeat customers, but it can create “brand sponsors.”
These are individuals who share their experiences of using your product or service with their friends and family…something every business owner dreams of.
With a diverse workforce, you’ll have insight into cultural norms that will help you avoid a marketing blunder that could negatively impact your brand.
Alternatively, a marketing blunder resulting from a lack of awareness of cultural sensitivities can be problematic for businesses as well.
Bottom line, excellent customer service informed by employees who know and understand the needs and desires of your target market is one catalyst behind “word of mouth” advertising that you’re smart to take advantage of.
When your organization hires diverse talent you gain the benefit of a workforce that can adapt to changes in the marketplace. This can potentially help your business to remain competitive in an ever-changing, global business environment.
Specifically, an organization with cognitive and culturally diverse talent is positioned to see – and take advantage of – opportunities in the industry missed by their competitors.
Opportunities that can potentially result in more revenues for your organization.
For example, the American Sociological Association found that “companies reporting the highest levels of racial diversity brought in nearly 15 times more sales revenue on average than those with the lowest levels of racial diversity.”
The research also found that “for every percentage increase in the rate of racial or gender diversity up to the rate represented in the relevant population, there was an increase in sales revenues of approximately 9 and 3 percent, respectively.”
In fact, companies with high levels of diversity among their talent were shown to routinely report higher numbers of customers than organizations less diversity.