Benefits of Diversity in the Workplace
In this fast-paced world, leaders often struggle with many urgent challenges and the topic of diversity in the workplace becomes an afterthought.
However, extensive research has shown that embracing workplace diversity, equity, and inclusion (DEI) can be a game-changing strategy that propels companies to new heights.
Workplace diversity exists when an organization employs individuals from varying backgrounds, genders, ages, sexual orientations, ethnicities, and more. Hiring individuals with both inherent and acquired forms of diversity is a necessity in today’s day and age with the globalization of business.
Top 5 Benefits of Workplace Diversity
The advantages of cultivating diversity in the workplace are tangible and proven by research:
Benefit#1: Diversity Drives Innovation
56% of companies with more than $10 billion in annual revenues strongly agree that diversity helps drive innovation.
The presence of diverse employees brings a variety of unique skills and experiences, creating opportunities for synergy and the development of innovative ideas.
For example, Procter & Gamble, a multinational consumer goods company with a portfolio of well-known brands such as Tide, Pampers, and Pantene, is an example of an organization that has focused on increasing diversity and inclusion.
With 41% of women representing P&G’s global workforce, P&G is inching closer to achieving its goal of having a 50/50 representation of women throughout management and associate-level roles.
P&G’s diverse workforce has contributed to the creation of powerful campaigns. “My Black is Beautiful” was a campaign created by black women at P&G to celebrate black culture and challenge racial biases.
“The Talk” was an ad released from this campaign that painfully showcases black mothers having conversations with their children to prepare them for a world that will treat them negatively because of their skin color.
Not only that, but the development of innovative products like the Pantene Gold Series for textured hair would not have been achievable without the diverse representation of employees from various ethnic backgrounds who personally understood the unique challenges associated with different hair textures.
Benefit#2: Diversity Improves Decision-Making
A comprehensive study of 200 teams revealed that diverse teams outperformed their counterparts 87% of the time. This highlights the positive impact of varied perspectives in facilitating more effective decision-making by avoiding groupthink and promoting healthy debates.
Despite data supporting the value of team diversity for successful decision-making processes, it is all too common for this diversity to be non-apparent in large organizations. All male teams make around 38% of the decisions in a typical large company, with this gap widening in the tech industry.
Benefit #3: Diversity Powers Global Expansion
In today's globalized business landscape, organizations must possess cultural competency to effectively engage with diverse customer bases. This is crucial for developing culturally sensitive marketing strategies, products that resonate with target audiences, and gaining global market share. Companies with greater diversity are 70% more likely to capture more markets.
McDonald’s is a prime example of experiencing successful international expansion due to the diversity within its teams. With a presence in over 100 countries, McDonald’s has achieved international success by customizing its menu to align with local tastes and cultural preferences in each region.
This level of adaptability is made possible through the recruitment of local talent, which provides their teams with invaluable cultural insights such as the incorporation of regional flavors into their products. Furthermore, the diversity of their workforce has proven instrumental in overcoming cultural and linguistic challenges during their international expansion efforts.
Benefit#4: Diversity Improves Financial Performance
It’s no surprise that the benefits of diversity mentioned above help the bottom line. Research by BCG demonstrates that companies with more diverse leadership teams consistently achieve higher profit margins and earn greater returns from innovation investments.
Bain & Co’s research shows that decision-making effectiveness is 95% correlated with financial performance. The numbers don’t lie in supporting the case for diversity in the workplace.
Benefit #5: Diversity Attracts Better Talent
1 in 3 individuals will not consider applying to a company that lacks diversity, making diversity in the workplace crucial for attracting top talent.
An inclusive work environment creates a culture that employees actively seek to be part of. When employees perceive that their contributions and presence are genuinely valued, it significantly reduces the likelihood of turnover.
Research indicates that when employees trust they will be treated fairly regardless of their differences, they are 9.8 times more inclined to look forward to work and 5.4 times more likely to commit to their company over the long term.
Challenges in Improving Diversity at Work
While diversity in the workplace offers numerous advantages, it is not without its challenges. Here are the most common challenges of implementing diversity in the workplace:
Resistance to Change
Organizational changes, such as diversifying the workforce or implementing new policies, can face resistance. In the face of such resistance, it is crucial to educate employees about the benefits of diversity and inclusion, encouraging them to perceive these efforts as investments in both the organization's and their own future success.
Leadership buy-in is essential to set an example for the entire organization, demonstrating the enduring commitment to DEI efforts.
Overcoming Discrimination
A Glassdoor report revealed that 61% of U.S. employees have experienced or witnessed discrimination.
Cases of biases, harassment or microaggressions are all too common, making it challenging for new members to integrate into the company. Thus, it is essential to establish DEI procedures including anti-discrimination policies and mechanisms for reporting incidents without fear of retaliation.
Conducting specialized DEI training on issues such as anti-harassment or unconscious bias can effectively promote a positive mindset toward diversity and guide employees in appropriate interactions with colleagues from diverse backgrounds.
Communication Issues
In a workplace with a multigenerational workforce, varying communication styles can sometimes result in an inefficient exchange of information among colleagues.
Younger employees often favor digital messaging platforms like Slack or Microsoft Teams, while older employees may prefer traditional phone conversations.
To improve communication, it's beneficial to establish clear guidelines regarding the appropriate use of each communication platform. For instance, messaging can be encouraged for swift, non-urgent discussions, while phone calls, video conferences, or in-person meetings can be reserved for more time-sensitive or critical conversations
Best Practices for Fostering Diversity
Tailor support to individual needs
Employees need to first identify the individual needs of different groups. Empowering employees in their personal lives will help them reach their fullest potential in their professional lives.
For female employees, consider offering comprehensive healthcare coverage including maternity care, having flexible working arrangements, and supporting childcare services.
Diversity efforts for LGBTQ employees can include demonstrating support by participating in external events like Pride. Other efforts include offering adequate healthcare coverage and structural interventions like gender-neutral bathrooms and inclusive forms.
2. Bias-free recruitment
Adopt inclusive and bias-free recruitment processes such as blind screening processes, inclusive job postings, and diverse interview panels.
By eliminating unconscious biases from the hiring process, it paves the way for fair and equitable evaluations of candidates, allowing companies to tap into a broader pool of talent. Bias-free recruitment offers a transformative approach to talent acquisition, fostering inclusivity and diversity within organizations.
3. Continuous diversity training
To ensure that diversity remains top of mind, regularly provide training to educate new and existing employees on company policies and expected behaviors to maintain an inclusive environment.
To establish successful diversity programs in the workplace, consider collaborating with trusted organizations (like CultureAlly :), known for their expertise in delivering effective diversity training courses.
4. Mentorship programs & employee resource groups (ERGs)
Implement mentorship programs to help underrepresented employees advance in their careers. Mentors provide guidance and actively advocate for career opportunities.
Like mentors, ERGs empower underrepresented employees by providing a supportive community where they can seek advice and work together to further enrich diversity initiatives.
5. Measure progress
Collecting data on DEI helps you set goals and track progress. To gauge the effectiveness of diversity efforts, employers can rely on several key metrics:
Employee productivity: The largest companies have experienced a boost in their productivity with a more diverse workforce.
Employee morale: Employee satisfaction and engagement reflect an inclusive workplace.
Employee turnover: A reduction in turnover rates is an indication of improved workplace satisfaction and culture.
Successful Organizations that Prioritize Diversity
Johnson & Johnson (J&J)
Johnson & Johnson (J&J), with over 140,000 employees worldwide, has a dedicated mission to make diversity and inclusion integral to their daily operations.
J&J’s organization’s DEI strategy centers around 4 pillars:
Accelerate our global culture of inclusion where every individual belongs
Build a workforce that reflects the diversity of our communities
Drive innovation and growth to serve global diverse markets
Transform talent and business processes to achieve equitable access and outcomes for all
Thanks to their strong global DEI strategy, J&J has been continuously recognized as being one of the top companies to work for.
They offer generous benefits, including substantial parental leave, surrogacy and adoption support, and discounted rates for childcare centers, earning them a place on Working Mother's 100 Best Companies list for 34 consecutive years.
Additionally, J&J actively supports 12 Employee Resource Groups (ERGs) that connect and engage employees across the organization. The company has set ambitious targets, aiming to achieve 50% women in management and 35% racial diversity in American management positions by 2025.
What truly distinguishes J&J is the strong leadership support for its DEI initiatives. If more organizations worldwide had management that shared the same commitment and mindset to DEI, the progress toward advancing DEI would be tremendous.
Commonwealth Fusion
Named as the #1 America’s Best Startup Employers by Forbes, Commonwealth Fusion is an example that organizations don’t have to be multinational to have good DEI policies and an inclusive workplace.
Commonwealth Fusion (CFS) is an energy and resource company based in Cambridge, Massachusetts with a mission to deliver clean, limitless fusion energy to the world.
The company’s leadership team is committed to building a diverse company with initiatives aimed at improving diversity and offering opportunities for growth and learning.
With comprehensive benefits such as unlimited sick days, health, dental and vision insurance and generous parental leave policies, CFS is empowering its employees with the resources and support they need to succeed.
Veterans United Home Loans
Veterans United Home Loans is a full-service mortgage lender headquartered in Columbia, Missouri. In 2013, the company launched its diversity and inclusion program, the United Initiative, which includes the following components:
Immersion internship: This internship program addresses the underrepresentation of people of color in the financial industry by creating opportunities for students of color and student veterans.
Diversity dialogues & movies: This initiative encourages progressive conversations among employees, increasing awareness of sensitive topics and promoting inclusivity.
Women in leadership: Veterans United actively supports women in leadership roles through events and resources designed to empower and advance their careers.
ConnectU groups: This is Veterans United’s version of ERGs. The ConnectU Groups include communities for LGBTQ, Professionals of Color and Women in Technology.
Veterans & active duty service programs: The company actively recruits military members and provides military benefits such as care packages, military training PTO, and more.
As a result of its DEI initiatives, Veterans United Home Loans has earned a place on Fortune Magazine’s 100 Best Companies to Work For list.
Diversity in the Workplace is Not Just a Buzzword
Fostering diversity in the workplace is an absolute necessity given the numerous advantages it brings. Embracing diversity can result in enhanced financial performance, the emergence of disruptive and innovative ideas, and the ability to attract top-tier talent.
In today's business landscape, diversity should no longer be relegated to the backseat; it is the driving force that can distinguish a business from its competitors.
