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Benefits of diversity in the workplace

Benefits of diversity in the workplace

The benefits of diversity in the workplace can be felt across all areas of an organisation. 

An increasingly important conversation amongst employers, managers, recruiters and consumers, some diversity benefits are tangible, others intangible, but all are important factors in how a business operates, interacts with others, and plays a positive role in the wider community. 

But before we start looking at the benefits of diversity in the workplace, let’s first understand what diversity actually covers, and looks like, in the world of work.

What is diversity in the workplace?

Diversity in the workplace describes how an organisation hires, promotes and engages with people from a wide range of backgrounds. 

Whilst often intertwined with ‘equality’ which focuses more on offering the same access to opportunity and preventing discrimination, diversity focuses more on understanding and appreciating the differences between people and ensuring, within a workplace context, that these attributes and characteristics are valued. Diversity as a term includes everything from race and ethnicity, to gender and age, sexuality, religion, education and socio-economics too.

Whilst much of the last couple of decades has focused on the representation of people from a wide range of backgrounds within a workforce, the truer (and more modern interpretation) of diversity at work focuses more on participation. Instead of hiring for diversity’s sake, how are people from different backgrounds actually promoted, listened to, and encouraged to participate in all areas of a business? 

The benefits of the latter are increasingly well understood, for both employer and employee.

The benefits of diversity at work

So what are the benefits of promoting and fully embracing diversity at work? Let’s dive in, starting with the most important.

The right thing to do 

First and foremost, it must be stressed that focusing on diversity in the workplace is simply the right thing to do. 

Before considering any other corporate or branding benefit, hiring and positively engaging with workers from all backgrounds is how all modern organisations should operate. 

A wider range of views, experiences and ideas 

People from different backgrounds bring a vast array of different ideas, experience and knowledge too. We can see the positive effects of this across society, and similar benefits are felt in the workplace too. 

By creating a diverse place of work, organisations have a broader spectrum of people to whom they can ask their opinion or seek a creative solution to a problem. 

These new perspectives can be invaluable to gaining a competitive edge and finding the best solutions more quickly.  

In fact, diverse teams have been shown to be 60% more effective when it comes to decision-making. 

Better business outcomes

Research shows that more diversity equates to better engagement… and increased profits. 

Research from Deloitte has found that eight in 10 millennials are more engaged at work when their company fosters an inclusive culture. 

This higher engagement leads to better productivity and healthier bottom lines. In fact, data from McKinsey shows how companies in the top 25% when it comes to gender diversity are 15% more likely to have above-average financial returns. Some data puts the comparative returns of more racially diverse companies at 15x higher than competitors with low racial diversity.

Positive employer (and consumer) branding 

Consumers have grown wise to spotting organisations marketing themselves to be something that they don’t truly live and breathe. Greenwashing is just one example of this, with companies espousing their green credentials in one small area of operation, whilst heavily polluting in another. 

A similar story can be said of diversity, where both job seekers and customers expect the brands they love most to be inclusive. 

This is important for organisations to understand as a key benefit of diversity at work as shoppers are increasingly spending money with businesses whose values align more closely with their own (thus fueling much of the greenwashing we see in marketing and advertising today). 

For hiring departments, a lack of diversity in the workplace presents a key issue, with research showing that almost 70% of job seekers consider diversity an important factor before applying. 

A deeper pool of talent 

Hiring and retaining top talent has always been one of the top challenges for HR departments and organisations as a whole, and focusing on developing a more diverse workplace means hiring managers can have a deeper pool of talent to fish from. 

This is especially important for businesses that hire predominantly younger workers, with 44% of millennials and Gen Z in the US being non-white, compared to just 27% in the generations before. 

Promoting diversity in times of change 

A pertinent example of when a diverse range of voices tends not to be heard is during periods of change – often because leadership teams within those organisations don’t include all the voices from an otherwise diverse workforce. 

At CML, we’re helping organisations overcome this by building change leadership networks that promote the voices of employees from ethnic backgrounds. 

Research shows that whilst many companies are taking great strides to improve the overall diversity of their workforces, that diversity is more rarely seen in decision-making positions – dispute the known benefits of prospecting ideas and solutions from a wider range of people. 

In fact, only 5% of businesses have fully implemented leadership development programs at all levels

Learn more about our change management training and how we help employees from ethnic backgrounds grow into future change leaders here

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