Globalization has made the world much smaller, with even traditionally closed-off countries experiencing rapid rates of migration, altering their demographic structure and economy. Workplace diversity is essential for companies to remain relevant, increasing their audience of potential customers, boosting creativity and productivity, and enabling businesses to be competitive in the global marketplace.
Nevertheless, as popular HR influencer Brene Brown points out, we need to strive for more than diversity, equity, and inclusion, instilling a sense of belonging in all employees, irrespective of their background. In this article, we look at some of the biggest benefits of workplace diversity and identify how fostering inclusivity enhances decision making, expands customer reach, and increases productivity and profitability.
1. Enhances a Company’s Image
Fostering a diverse, inclusive, and equitable business culture goes a long way toward enhancing a company’s reputation and global standing. Workplace diversity attracts more investors, business partners, and customers.
2. Widens the Talent Pool
The Censia Talent Intelligence Platform harnesses the power of predictive analysis and artificial intelligence to model and find the talent most likely to succeed, irrespective of the candidate’s race, age, gender, ethnicity, disability, religion, sexual orientation, or socio-economic background.
Widening the talent pool increases an employer’s chances of connecting with the right person for an open role. According to one study, 67% of workers cited diversity as an important attribute for a potential employer. According to a survey by Glassdoor, 70% of Latinos, 72% of women, 80% of Asians, and 89% of black respondents agreed the workplace diversity was a critical consideration when seeking employment.
3. Improves Employee Retention
Not only is diversity important in attracting new employees, but it is also integral to persuading them to stay. Businesses that embrace cultural diversity, enticing a wider pool of candidates, typically build a more qualified workforce, hiring the best in the industry.
Exit interviews reveal that, for many employees, a driving factor is a lack of sense of belonging, with employers neglecting to ensure that their staff feel safe and comfortable in their working environment. It is therefore crucial for companies to look beyond legal requirements and hiring quotas, ensuring that their staff feel they are able to bring their whole selves to work and are valued for doing so.
Top-down diversity shows all employees that they can progress within an organization. Employees will only stick with a company in the long-term if they see a future there and the potential to progress within their career. To inspire staff commitment and loyalty, it is vital for companies to be diverse at every level.
4. Improves Customer Service
In order to provide great customer service, a company must connect with customers via its employees. Employing a diverse team enables companies to build more authentic relationships with a wider range of customers.
Customers keep a business afloat. The more customers a business has, the more profit it generates. Diversity within the workplace helps companies to better understand their customers, presenting effective solutions suitable for different customer needs.
5. Enhances Decision Making
According to a study by Cloverpop, evaluating 600 business decisions made by 200 teams, diverse teams demonstrate a 60% improvement in decision making. Teams that were diverse in age, gender, and geography made better business decisions 87% of the time.
C-level employees are responsible for major business decisions. Organizations that actively invest in seeking out minority voices gain pivotal insights into the issues faced by diverse demographics, providing leadership with new perspectives and inspiring them to make a difference.
6. Creates a Competitive Advantage
Multiple studies show that companies that embrace diversity have a higher likelihood of sustaining a competitive advantage over those that do not.
Diverse companies achieve a competitive advantage not only by acknowledging diversity, but by striving to create an inclusive, equitable environment where employees from a variety of different backgrounds bring their unique experiences to the table to work together towards a common goal. By embracing employees with diverging perspectives, companies produce better business solutions, increasing their overall reach.
Once study published by the Harvard Business Review reveals that companies that embrace diversity are 70% more likely to capture new markets.
7. Improves Performance and Profitability
Companies that fall in the top quartile for ethnic, racial, and gender diversity are 25% more likely to report above-average profits for their respective industry.
For every 10% increase in gender diversity, companies are typically around 3.5% more profitable, according to a study by McKinsey. According to one Forbes report, ethnically and racially diverse companies are 35% more likely to report above-average profits.
In the modern, multicultural world, building and maintaining a diverse workforce is critical to commercial success. Industries facing recruitment and retention difficulties, such as STEM fields, must invest in providing training, mentorship, and professional opportunities specifically tailored to underrepresented groups in order to close skills gaps and create a fairer and more inclusive society.