Why is diversity important?
Malcolm Forbes says, “Diversity is the art of thinking independently together”.
Every individual is unique, and the coming together of different perspectives, cultural backgrounds and races is what makes diversity special.
But when we think specifically with a business lens on, what is it that makes diversity so important?
Contrary to widespread belief, we need to decouple diversity and inclusion to truly understand the why. I speak about this in this article on the dimensions of diversity.
Once we understand the fundamentals inclusion, we then bring the diversity back into the picture. I outline more in this article on diversity management.
Here are 7 reasons why this is critically important to your company’s success:
1. Diversity stimulates creativity and innovation
When you have people from different backgrounds and experiences working at the same company, it brings together different perspectives, and different ways of solving problems.
When different perspectives come together, there’s a higher chance of sparking off innovative ideas that make a difference to the bottom line. Basically, diversity builds your company’s knowledge!
According to research by Deloitte, companies with more inclusive cultures are six times more innovative, eight times more likely to achieve better business results, and twice as likely to meet or exceed financial targets than organisations with less diversity. Another study shows that diverse companies were 45% more likely to report annual market share growth.
2. Diversity increases employee productivity
Diversity brings together a variety of skills.
For instance, someone may be lacking in numerical skills, while another employee may be an expert at it. And when we pull together all of these skills, more work gets done, boosting the overall productivity of the workplace.
Research shows that companies benefit the most when all levels of management are racially diverse. In fact, a 1% increase in racial diversity increases firm productivity by between $729 and $1590 per employee per year, which is a massive shift.
3. A diverse company attracts top talent
People want to work for companies that are diverse, and progressive in their thinking.
If your company culture and job descriptions are more inclusive, you’re more likely to attract top talent, irrespective of their age, sex, background or race.
The more talented your workforce is, the higher the chances of your company being more efficient, and profitable. In fact, 67% of new job seekers consider workplace diversity to be an important factor when evaluating job offers.
If the hiring patterns and recruitment strategies at your workplace are geared towards fostering diversity, your company’s talent pipeline will always be robust.
4. A diverse company attracts diverse customers
Think about it, if your employees are diverse, they can serve diverse customers.
Being able to serve customers from multiple backgrounds will also play an important role in boosting your firm’s profitability, since you’ll have the ability to serve new customer segments.
In fact, having a diverse workforce could also enable your company to launch into a new market, in a new country, which has the potential of increasing revenue and market share.
5. Reduces costs by hiring internationally
Being a diverse company means you can hire internationally. For instance, if you’re looking to hire technical staff, you could turn to hiring technical employees in India at half the wages.
By broadening your horizons, you open up new territories to onboard diverse employees, which can offer a huge cost advantage to your company. You no longer need to restrict yourself to hiring diverse employees from within your territory and can look to other countries and locations.
6. A diverse workforce is future focused
Taking a long-term view on how the overall population and workforce will shape up into the future is important for any company.
When your company reflects the workforce of the future, it can serve the population composition of tomorrow. Not just that, diversity also helps in boosting employee engagement, and reducing employee turnover, because if employees feel included, they’re more likely to feel engaged, and less likely to leave the company in the long run.
7. A diverse company leads to personal growth
Diversity in the workplace means that people are compelled to step out of their comfort zone, and embrace new cultures and ways of thinking. Through interacting with diverse employees, people expand their outlook on things, and grow at both a personal and professional level.
Think about it, if you’re in a team with a mix of Asians, Americans, Europeans, men and women, you’ll be forced to get to know their culture, their religion, their beliefs, and their values, which would all be very different to the ones you hold.
All of this can contribute to your own personal growth.
So, why is diversity important?
Even if your company does embrace diversity, this is only half the equation.
The strength and power of diversity is harnessed when your leaders and employees are inclusive of the difference that surrounds them.
That’s why it’s so important for your leaders to build habits that help them leverage diversity.
A lot of leaders understand the why of inclusion, but it’s the how that can be illusive. Our Inclusion Habits for Leaders program takes away the confusion and teaches leaders how to:
- Acknowledge the uneasiness of difference
- Communicate as one team
- Constantly challenge the status quo while being comfortable with being wrong
- Get vulnerable with their teammates
- Are courageously curious and
- Remain fair at an individual level
Our team will reach out for your next steps.