The last few years saw a growing trend that showed higher acceptance towards the concept of diversity and inclusion amongst the corporate world. As a result, more companies are now focusing on being diverse by incorporating D&I policies at all workforce levels.
Companies recognise “diversity and inclusion” as a driving force for revenue, growth, and profit.
Wondering how having a diverse/inclusive team could benefit your firm?
Here are some interesting statistics to consider:
- Studies done by Gartner have indicated that team performance in a highly diverse environment improved by 30%.
- Research done by McKinsey has shown that ethnically diverse companies are 35% more likely to outperform their peers, while gender-diverse companies are 15% more likely to do the same.
- Catalyst research has indicated that companies with more women employees statistically outperform their peers for a long time.
- Studies done by Deloitte Australia pointed out that inclusive teams outperform their peers by 80% in team-based assessments, and companies enjoyed a 2 to3-times increase in cash flow per employee.
What is diversity?
In simple terms, diversity can be explained as different characteristics in people belonging to a specific group. These characteristics refer to unique features in individuals such as race, age, gender, ethnicity, culture, religious background, physical abilities, and geographical location.
What is diversity and inclusion in the workplace?
A diverse and inclusive atmosphere makes everyone feel equally involved in all workplace areas, irrespective of who they are or their role in the organisation.
A company with a diverse workplace ensures that it hires employees solely based on their skills and talent and without the bias of ethnicity, race, culture, gender, location, etc.
Although the concept of diversity is interpreted solely as a multicultural matter, it also applies to a diversity of language, age, race, gender, ethnicity, sexuality, and educational background.
A study done by Michigan University indicated that the symbolic hiring of employees does not produce any tangible results. Thus, it is crucial to ensure the active participation of all the employees within a company’s operations in order to diversify the workspace actively.
Benefits of diversity and inclusion in the workplace
Here are some benefits of a diverse and inclusive workforce:
1. Diverse talent pool
Gone are the days, where employees were looking for a well-paying 9 to 5 job. Instead, they are on the lookout for spaces where they feel accepted, can grow, and be challenged.
This is the main reason why a good majority of candidates are attracted to a company that embraces diversity.
Organisations these days have a growing understanding of the fact that factors like ethnicity and race are irrelevant to productivity.
Thus, if your company is open to diversity in regards to background, ethnicity, age, thought, or other factors, it increases your likelihood of finding the best hire.
Studies have indicated that 67% of job seekers consider diversity while seeking employment.
A Glassdoor survey indicated 72% of women, 80% of Asians, 89% of black respondents, and 70% of Latinos said workforce diversity was important. In short, we can conclude that diverse companies are more likely to attract a refined and stronger talent pool.
2. Greater innovation
Workplace diversity is the number one factor that contributes to innovation and the generation of big ideas.
Having a company that has a group of homogeneous workforce similar in their thoughts and personalities might not lead to creative solutions.
On the other hand, having a diverse workforce can spring up or materialise breakthrough solutions as their problem-solving skills and thought patterns are truly unique.
Diverse teams can throw light on how to create services or products for the emerging future.
The Harvard Business Review has found an important relationship between innovative outcomes and diversity.
BCG’s 2017 Diversity and Innovation Survey pointed out that companies with an above-average diversity score have higher innovation revenues.
Similarly, a survey conducted in 2019 by the HR Research Institute found that 66% of companies believe that diversity is one of the key factors supporting innovation.
3. Better perspective
A company that hires people from diverse backgrounds, cultures, or nationalities, will naturally benefit from a broad range of perspectives, opinions, and experiences.
This is crucial to smoothly sail through various problematic business challenges that might creep in at various stages.
It might be intimidating for some hiring managers to accept different opinions from people belonging to diverse backgrounds. However, research has proved that diverse teams can boost decision-making abilities up to 60%.
4. Enhanced employee performance
If the employees feel that they can’t openly express themselves at work, chances are high that they are more likely to fear rejection and might not produce their best.
People are afraid to give unpopular opinions mainly due to potential awkwardness.
But, what if they find themselves in an environment where employees come from different cultures?
This scenario offers them a safer, happier and comfortable space for them to work – resulting in higher productivity and output.
Studies have shown that companies with a diverse workforce are 35% more likely to outperform their competitors.
Harvard Business Review has indicated that the likelihood of diverse companies to capture new markets is at 70%.
5. Increased profits
Several studies have proved that companies with greater diversity at the workplace help to achieve better profits.
Companies with a diverse workforce help to make effective business decisions which eventually result in earning more profit.
Research done by McKinsey & Company, a global management consulting firm with over 180 companies in France, Germany, the United States, and the UK, indicated that companies that have more diverse teams were the top financial performers.
McKinsey reports also indicated that the EBIT (earnings before interest and taxes) increased 3.5% for every 10% increase in gender diversity.
6. Effective decision making
Diverse teams help companies make strategic decisions effectively and quickly in a study conducted by Cloverpop on 600 decisions made by 200 groups. It was found that there was a 60 percent improvement in decision-making by diverse teams.
Individual decision-makers were outperformed by gender-diverse teams by 73 percent. The outperformance rate was 87% when team members were diverse in age, geography, and gender.
7. Profit maximisation
Several studies have proved that diverse teams could boost performances, thereby increasing overall profit margins.
A McKinsey report in 2015 on 366 companies indicated companies that have a diverse workforce are 35% more likely to have a higher financial return.
Another study conducted by the same company revealed that firms with diverse executive boards have 95% higher returns on equity than homogeneous boards.
Boston Consulting Group(BCG) research found clear-cut evidence on improved financial performance after diversifying the team leaders.
8. Improved employee trust and engagement
When employees feel that the company values them, they are usually happy to go to any extent to support the company. In short, it leads to higher engagement.
Studies have shown that employees working in an inclusive workspace have better mental and physical health and are less likely to apply for leave due to health issues.
A study conducted by Deloitte on the experiences and views of 1,550 employees on three large multinational businesses, including healthcare, retail, and manufacturing, has proved that their better engagement is the outcome of diversity.
Regularly recognising the unique talent of your employees and rewarding them will help nurture mutual trust and create a more inclusive workspace.
9. Improves company reputation
Businesses dedicated to building and promoting diversity in the workplace earn lots of goodwill from the employees and the public.
Having a diverse group of workers in your company helps make your company exciting and easy to relate to.
Additionally, it opens the door to meet various people, markets, business partners, and customers.
Diversity and inclusion best practices and strategies
Here are some of the top ways by which you could include diversity and inclusion in your company:
1. Constant team evaluation
It is important to constantly evaluate your team to ensure that the workforce is up to the mark in terms of D&I. If you lack enough employees from diverse backgrounds, it is recommended to consider hiring accordingly to maintain a diverse workforce.
Reports from BCG (Boston Consulting Group) indicated that among the Fortune 500 companies, 24 CEOs are women, which makes up to 55% of the total number of CEOs.
2. Honour cultural, religious, and gender diversity
It is crucial to honour multiple religious and cultural practices of your employees. You can achieve this by focusing on important cultural and religious holidays.
This will help to improve the satisfaction of your employees, allowing you to gain better employee retention.
3. Create a pay structure to promote equality
Pay is one of the critical factors that affect the motivation of employees and improves their relationship with work. Therefore, having an equal pay structure irrespective of gender or ethnic origin helps send out a positive message about the organisation’s value and improves productivity by attracting the best employees.
This will also help to avoid expensive lawsuits and strained relationships between employers and employees.
4. Welcome diverse thinking
If your company has a diverse workforce, the employees will naturally have diverse thinking. This comes as a result of differences in perspectives due to their different backgrounds.
Embracing diverse thinking helps generate effective feedback and out-of-the-box ideas. This will also help employees to feel that they are respected and part of a shared mission.
5. Be open to a multilingual workforce
In order to make the employees feel included, ensure that you consider any language barriers and employee preferences. Companies these days make sure that employees feel comfortable by communicating in their preferred language.
Having a multilingual workforce also helps to ensure educational opportunities for the workers to learn other languages.
6. Have personal discussions
Having a personal discussion with the manager is one of the effective ways to understand the needs of employees.
Managers should be open and understanding to ensure employees are comfortable and it is safe to speak up and trust their leadership skills.
7. Create strong anti-discriminatory policies
To have long-term success in the organisation, it is a must to have an anti-discriminatory policy. The policy should set standards and expectations for behaviour and clarify that discrimination and harassment will not be tolerated.
These should be integrated within the organisational policies so that the company ensures implementation on a day-to-day basis.
8. Create a company culture where every voice is heard
Often, employees quit their job if they find that their hard work and uniqueness are not appreciated.
Thus, it is important to nurture an environment where they feel connected with the company and feel appreciated for the efforts they are putting in irrespective of their age, religion, physical conditions, race, gender, etc.
9. Include all generations in the workforce
Businesses often have a workforce that comprises individuals in a wide range of age groups.
The older generation might lack sufficient technological expertise in using modern communication channels compared to young millennials but they could be way ahead in terms of experience.
Ensure that you invest in a communication platform preferred by employees of all age groups to ensure seamless communication.
Additionally, it is required for organisations to understand the value addition provided by individuals of different age groups.
10. Reduce bias in the selection and promotion policies
Businesses often pride themselves on having a diverse workforce. However, as known to many, recruiting managers tend to be unconsciously biased during the selection process.
To diversify the workforce, the recruiting personnel must avoid this bias and be open to applicants coming from diverse backgrounds. In addition, the company policies should also be revised so that the diverse backgrounds of the workers won’t interfere when it comes to giving promotions.
Ensure that your HR and recruitment staff are provided adequate D&I training.
11. Educate people in leadership positions
Once you have decided to implement diversity and inclusion policies within your company, the next best thing to do is to educate the leaders and executives.
People in the executive and managerial roles need to develop an all-inclusive attitude to deal with a diverse workforce.
As an example, leaders can help and inspire their employees to reevaluate their prejudices and judgment towards coworkers to create an unbiased workspace with transformational leadership.
The modern business world is transforming at a rapid pace. With the blooming of internet technology, remote teams can collaborate virtually to solve complex issues.
These days we can see a steady influx of people in the workforce who come from different geographical locations, backgrounds, religious beliefs, ethnicity, etc.
Harvesting ideas from diverse workgroups will help to give a considerable upliftment to your business.
Ensure that you revise your company policies periodically to warmly welcome a diverse workgroup with open hands.