To maintain a competitive advantage, companies need to consider the benefits of hiring an underrepresented workforce and how diversity positively impacts the organization and its bottom line. In today’s marketplace, workplace diversity encompasses so much more than hiring people from different backgrounds.
Your company culture should reflect a proactive attitude toward diversity, equity, and inclusion to build an effective work environment. These elements shape and empower your workforce to break down past prejudices and embrace a culture of respect, understanding, and collaboration.
In this article, we’ll explore:
- The benefits of diversity in your work environment
- How creating an atmosphere that welcomes diversity can enable your enterprise to recruit and retain top talent
Businesses that strive to foster diversity will have a stronger competitive advantage in the global marketplace.
Related: The Future of Diversity
What is Diversity in the Workplace
Diversity in the workplace goes beyond hiring qualified candidates that are from underrepresented groups. As businesses evolve and grow, companies seeking to hire and retain employees from different backgrounds, races, genders, or religions understand the benefits of different perspectives, ideas, and lived experience.
While diversity is about recognizing and employing underestimated individuals, building a diverse work environment also includes equity and inclusion. When you create a work environment where everyone feels equal, it enables the voices of your employees to be heard, valued, and respected. And the company ultimately sees productivity and profit margins increase.
Workplace Diversity—Does It Provide a Competitive Advantage?
Absolutely. Although a Gallup study found that it didn’t matter how diverse the workforce was if the enterprise wasn’t proactively creating a work environment where employees felt heard, valued, and involved.
According to the study, when your company culture is focused on developing a diverse, equal, and inclusive culture, then your employee engagement goes up and the company’s financial performance can increase by 46%-58%.
Diverse Perspectives Foster Creativity & Innovation
For businesses that value creativity and need to innovate to maintain a competitive edge, leveraging a workforce of diverse perspectives is critical. Hiring underrepresented employees helps a company leverage a broader set of skills, perspectives, and experiences. By fostering collaboration between these different perspectives, the business will inspire innovative ideas.
A University of Florida study found that diversity is vital for businesses to be creative and flexible. By having various backgrounds, employees can bring new insights and creativity to solve fluctuating market problems and meet customer demands.
People from diverse genders, ethnicities, abilities, and ages have different perspectives and information processing styles A Harvard study indicates that the team can outperform other groups as a team utilizes its cognitive diversity.
Problem-Solving and Decision-Making
Teams with similar backgrounds and similar perspectives can struggle to innovate and adapt, jeopardizing the team’s ability to problem-solve effectively or the decision-making process can suffer from groupthink.
A diverse and inclusive team can enable better decision-making because the team is pulling from different perspectives and experiences. Casting a wider net through its employees, the team’s decision-making will enhance products and services, satisfy customer needs, and reach company KPIs.
Employee Engagement
When a company embraces diversity, it encourages underrepresented employees to become loyal because they feel valued, respected and motivated to grow within the company. When everyone is truly treated equitably, then an environment of respect emerges and their company engagement grows.
A study on the Psychological Benefits of Creating an Affirming Climate for Workplace Diversity found company turnover decreases dramatically when employees feel they have equal access to opportunities and receive fair treatment. Reducing turnover is a tremendous advantage because it saves money, time, and resources.
A Deloitte survey discovered that employee loyalty and retention increased specifically with millennials who would stay with their company for at least five years when they felt their company culture valued diversity. This is significant because many millennials leave an enterprise within two years.
Related: Re-Engage Your Team
Need help developing an inclusive, diverse company culture? Contact Reverb to work with one of our HR consultants.
Attract Better Talent
A study by the University of Syracuse discovered a company’s reputation is a valuable asset that can be significantly impacted by effective diversity and inclusion. Customers and external audiences will also value the company, increasing sales, partnership opportunities, and attracting top talent.
When the company’s purpose aligns with their own beliefs and values around inclusion and diversity, then their actions reflect it and ambitious business professionals will seek out opportunities to be a part of a healthy, diverse workforce.
Increased Profits
Profitability directly correlates to productivity. A study found that by simply encouraging diversity, employees performed higher to execute company strategies. This higher performance increased productivity and profits.
And The Harvard Business Review found that diverse teams had 26-32% higher success rates than teams of the same ethnicity. And while it’s great to retain employees, it’s even better when diversity and inclusion policies increase profit margins and sales.
Leveraging the Benefits of Workplace Diversity
In order to create a diverse organization that can reap the benefits of an underestimated workforce, businesses will want to focus on collaboration, communication, and trust. When everyone feels equal and that their voice is heard, then personal bias begins to fade.
A sense of belonging among coworkers with varied backgrounds not only supports innovation, collaboration, and productivity, but it creates an enriching environment where team members can learn and grow together.
Reverb is a human resources consulting firm that specializes in helping startups create inclusive cultures that engage and retain top talent. We also offer HR consulting, leadership development, and executive coaching.
That’s great, but how do you build and manage a diverse, inclusive workplace that benefits your employees and your organization as a whole? Get in touch with Reverb—we’re here to help.
Related: Creating a Culture of Openness
