Corporate diversity and inclusion is a hot topic – and for good reason. Find out why diversity is important – and crucial for companies looking to gain a serious advantage over their competitors.
Diversity refers to the variety of differences between individuals. This encompasses race, ethnicity, gender, age, sexual orientation, physical abilities and disabilities, religion, political beliefs, education, socioeconomic background, language, cognition, and culture. When it comes to the workplace, however, diversity is a crucial driver for sparking innovation, bringing different perspectives together to refine an idea.
Why is Diversity Important?
In recent years, an increasing number of companies have set Diversity and Inclusion (D&I) as one of their main priorities, with Glassdoor Economic Research revealing a 37% increase in job openings related to D&I roles across the US, UK, France, and Germany in 2019, as compared to 2018.
Aside from it being a moral imperative, an inclusive workplace has financial and productivity benefits for all involved, making it a key factor for companies looking to succeed in this increasingly globalised and competitive world. Simply put, promoting D&I is a win-win situation for both employers and employees – and here’s why.
12 Benefits of Diversity in the Workplace
Boosts Employee Engagement
Employees are far more likely to voice their opinions if they feel that others will listen to and respect their point of view. Having a diverse workplace in which different voices are heard and accepted encourages employees to actively engage in their work environment, resulting in higher levels of productivity, increased retention, and overall business success.
Raises Employee Confidence
When a company actively embraces and celebrates its employees’ different individual characteristics and perspectives, their employees are far more likely to feel accepted and valued within their workplace. This feeling boosts not just their morale, but also their confidence to both express their ideas and build closer relationships with their colleagues, leading them to take real pride in their work and ultimately improving your company’s overall performance and bottom line.
Boosts Productive Performance
Low employee morale is a silent killer of workplace productivity. Luckily, it’s been proven time and time again that diversity within the workplace has a positive impact on employee morale. When morale is high, people are more motivated to complete their tasks, resulting in an overall increase in productivity, efficiency, and effectiveness across the board.
Increases Skills and Knowledge
By recruiting employees with a broad range of backgrounds, skills, and experiences, your business stands to benefit from a larger talent pool and a wider spectrum of creativity and perspectives.
Take age, for example. According to Jay Munro, Head of Career Insights for Indeed, “Older employees have life experience and background knowledge in the industry that they can use in the workplace, while the younger generation comes in with new ideas and ways of thinking. When we have different generations working harmoniously and sharing ideas and experiences, the output you see can be really interesting.”
Fosters Creativity and Innovation
It’s creative business ideas that set companies apart from one another – and employing a diverse group of people can help bring in a wider and more unique pool of ideas to help you edge out the competition. Boston Consulting Group’s study reported innovation revenue to be 19 percentage points higher than that of companies with below-average leadership diversity, showing a close correlation between diversity and innovation.
Faster Problem Solving
A diverse team with varying perspectives and viewpoints is able to reach solutions quicker and come up with more unique ideas than a team that shares similar backgrounds. A Harvard Business Review study found that teams solve complex, unfamiliar problems faster when they are more cognitively diverse.
Easier Recruitment
Having a diverse workforce also means that you have a larger, more diverse pool of candidates to choose from. This increases your chances of finding exceptional candidates who are best suited for the job and ultimately results in better performance. As recruiting can get very expensive, broadening the company network can help cut costs and boost recruitment efficiency as well.
Understand Customers Better
To deal with a diverse customer base, you need a diverse team. By hiring employees from all walks of life, you’re able to connect with and gain insight on a broader range of international customers. According to the Harvard Business Review, teams which include a member that shares a client’s ethnicity are 152% more likely to understand that client than another team, increasing the odds of success.
Reduces Employee Turnover
It’s no secret that long-term employees look good for the business, while a high turnover rate looks, well, bad. Diversity within the workplace has been strongly linked to employee retention as it indicates an environment of mutual respect. Employees that feel supported and valued in their work environment are understandably happier and more satisfied with their workplace. Hence, companies with a diverse workforce tend to retain employees for longer.
Raises Profits
Studies from both McKinsey & Company and Boston Consulting Group found that financial performance improves as organisations become more inclusive, thanks to the aforementioned improved productivity levels. Another contributing factor is the low turnover rate, as bad hires can be extremely costly.
Boosts Company Reputation
A study conducted by Glassdoor found that two-thirds of active and passive job seekers said that a diverse workforce is an important factor when evaluating companies and job offers. Having a diverse workforce attracts more applicants to your business and even gives your company a competitive edge over bigger firms. It also attracts clients who choose to only do business with companies whose business practices are socially inclusive and responsible.
Reduces Conflicts
Conflict in the workplace is inevitable. When there is a lack of acceptance or respect among employees, conflicts tend to arise. Mutual respect, however, reduces the likelihood of conflict, uniting employees with a common purpose. Developing cultural awareness is key here. By practising open communication in conjunction with truly accepting and supporting diversity within the workplace, conflict can be reduced or avoided entirely.
When it comes to building a successful and sustainable business in a global market, D&I is key. It’s no longer enough to simply carry out your main business function – in this day and age, you’ve got to take a stand, practice what you preach, and engage in corporate and social responsibility.
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