Benefits of Diversity in the Workplace

Dec 17

By Jason Richmond, Founder,Ideal Outcomes, Inc.

Workplace diversity is taking its rightful place at the top of the business agenda. Over the last few years, we’ve seen encouraging progress on this front, with more companies investing time and effort in this important area of their businesses.

Some of the country’s largest brands have recently begun reporting on their diversity numbers. This is in recognition of the growing expectation of employees and prospective candidates for organizations to embrace workplace diversity and inclusion in an authentic and meaningful way.

The findings of recent research by Glassdoor conclude that:

  • More than 3 out of 4 job seekers and employees (76%) report that a diverse workforce is important when evaluating companies and job offers.

  • Having a diverse workforce is particularly important to underrepresented groups: Nearly a third of employees and job seekers (32%) would not apply to a job at a company where there is a lack of diversity among its workforce.
If you feel that your organization could improve its approach and performance on the diversity front, read on. In this article, we’ll explore what diversity in the workplace comprises and consider some of the benefits you can look forward to if you get it right.

What Is Workplace Diversity?

First, let’s be clear what we mean by workplace diversity.

A diverse workforce is one in which people from all backgrounds, walks of life, race, gender, age, socio-economic status, and sexual orientation are sought out by the employer and welcomed into the business.

Diversity is often associated with the term “inclusion.” While the two are closely linked, they mean slightly different things. Diversity refers to the abovementioned personal differences or attributes that hired employees may have. Inclusion refers to how those same people are treated once they’re working in a company. It means that everyone should be treated with respect and not be subjected to any form of bias or discrimination.

6 Benefits of Workplace Diversity

Employers and employees alike reap compelling benefits from having a diverse workforce. Here are our top six benefits that you as an employer can enjoy:

1. Better Business Performance

Companies with more diverse employees report consistently higher revenues, and the numbers are there to prove it. According to a McKinsey report, every 10 percent increase in the racial and ethnic diversity of a business’s senior executive team leads to a 0.8 percent increase in earnings.

What’s more, businesses in the top quartile for racial, ethnic, and gender diversity have a 25 percent greater likelihood of being more profitable than the median for their respective industry. This holds especially true during times of crisis.

2. A Larger Talent Pool

If you put diversity front and center of your recruitment efforts, you’ll succeed in attracting a greater number of qualified candidates. If you don’t, you’ll end up attracting the same kinds of people you always have. When you intentionally extend the scope of your talent search to include people from diverse backgrounds, ethnicities, ages, and so on, you boost your chances of finding the perfect hire more quickly. You’ll also find that more prospective candidates are interested in joining your team.

Research from Glassdoor reveals almost 9 in 10 black applicants, 8 in 10 Asians, and 7 in 10 Latinos say that workforce diversity is important to them. A significant majority of white respondents also indicate that workplace diversity was a key factor when considering prospective employers.

3. Lower Staff Turnover

Diverse organizations are better able to retain their people over the longer term. That’s in part because they make an effort to ensure that everyone’s voices are heard and that everyone is treated with respect and given equal opportunities for career advancement. Simply put, when people feel acknowledged and that they “belong” in an organization, they’re less likely to move on.

4. Engaged Employees

People who feel accepted for who they are and included in a team regardless of their backgrounds feel more engaged. Engaged employees will be more likely to put in extra effort and go above and beyond what appears in their job description. This translates into more effective teamwork, improved team morale, and enhanced productivity. On the flip side, disengaged employees tend to withdraw and do just the bare minimum. This can lead to tension and conflict between individuals and their colleagues and managers.

5. A Culture of Trust

Trust is an often-overlooked concept in the modern workplace, but its importance shouldn’t be underestimated. In fact, some prominent business leaders have recently spoken out about what they perceive as a worrying “crisis of trust” in our modern workplace – the result of the unprecedented convergence of several nefarious forces: a pandemic crisis, a sustainability crisis, a workforce crisis, and an inequality crisis. 

Business is the most powerful platform for change, so forward-looking leaders should invest time and energy in building their own trusted enterprises. When people feel that there’s reciprocal trust between them, their colleagues, and senior leadership–irrespective of their backgrounds–it fosters a truly inclusive culture.

6. Creativity and Innovation

When people feel accepted and included, their fear of rejection or “looking silly” is reduced. This opens the door for greater levels of creativity in an organization. People simply feel more comfortable trying new things without fear of failure or ridicule. 

Similarly, diverse teams enjoy greater levels of innovation. That’s because when you put people from diverse backgrounds together to work on a new project or come up with a new solution to an old problem, everyone will share a slightly different approach based on their unique perspectives and personal and professional experiences.

Additionally, diverse teams can identify with a broader customer base and anticipate their needs and preferences, which helps you develop more targeted and relevant products and services.

Take Action on Workplace Diversity

Now that we’ve explored what workforce diversity means and the many benefits of diversity in the workplace, be sure to read this post for some tips on building a culture of diversity, inclusion, and belonging for your organization.

Alternatively, if you’d like to learn more about Ideal Outcomes and how we can help you add momentum to your workplace diversity efforts, contact us today.