3 Reasons Why Diversity Is Key to a Successful Business

It’s not hard to make the case for why diversity matters — it increases revenue, engages employees, and encourages innovation. It’s important in all industries, as diverse companies naturally design more products and services that relate to a broader audience. What’s more concerning is that necessity compels me to explain the importance of diversity, even though many have done so already.

Companies should want a diverse workforce rather than thinking of it as an obligation. Besides, diversifying isn’t just about becoming a better employer and consumer brand — it offers its own set of distinct advantages, especially when it comes to productivity, creativity, and return on investment. Let’s take a closer look at just how much of a positive effect diversity can have on your business.

It’s Good For Your Employees

According to a Glassdoor survey, 57 percent of employees think their company should do more to diversify their workforce — and they’re right to think so. When employees look around the workplace and see themselves, they become more confident that they will be taken seriously when discussing product ideas and growth opportunities with their supervisors. This confidence inspires increased commitment, engagement, and loyalty, all of which are needed for innovation and the attraction and retention of star employees. In fact, a Deloitte study found that when employees think their organization is committed to and supportive of diversity — and they feel included — there’s an 83 percent increase in their ability to innovate.

Diverse teams have another advantage — they’re far more productive and creative than their non-diverse counterparts. Coupled with more approaches to problem solving, people with different backgrounds introduce new ideas and ways to innovate. In more diverse groups, suggestions from minority team members are less likely to be dismissed. This means that there’s a constant stream of new ideas to drive the company forward. These creative teams produce better results, giving your company quality products and exemplary service that increases your consumer and employer branding.

Diverse workforces can form connections with different communities. Employees with different backgrounds have a better understanding of different cultures, and are able to bring unique perspectives and ideas to decisions being made across the company. Diverse workforces are also essential to employee engagement. When employees are empowered to learn, understand, and celebrate different perspectives, and to challenge their own viewpoints and behavior, they form strong, unshakeable bonds with their co-workers. This meets two of the three driving forces behind office politics: the need to get along and the need to find meaning. The sense of community developed by bringing together people with different backgrounds and mindsets creates a culture that produces new ways of thinking about products, which will only help you to surpass your competitors

It Benefits Your Customers

Your customers are an incredibly diverse group; they differ in gender, age, sexual preference, race, physical ability, ethnic groups, and religion. Your employees should reflect that diversity. As a matter of fact, a diversified workforce can have a considerable impact on customer satisfaction and sales.

A survey conducted by Dr. Ben Barry of Ryerson University found that black women in Canada and the U.S. were 1.5 times more likely to purchase a fashion product advertised by a black model, as seeing a model that mirrored their race made them connect to the brand. White women were just as likely to purchase, believing that the brand upheld the values they aspired to, such as empowerment and inclusion.

Having a workforce that reflects the diversity of your customer base allows you to be conscious of what’s important to them. You’ll also be able to effectively market your products/services and avoid offensive snafus. Employees from diverse backgrounds are quicker to recognize tone-deaf marketing campaigns, and more likely to speak to your customers in a voice they understand and respect.

It Boosts the Bottom Line

Businesses that choose not to cultivate an inclusive workplace have high turnover rates due to the resulting hostile work environment. Failing to hold on to a qualified employee can cost 16 to 21 percent of their annual salary, and that money is coming straight out of your company’s profits. Fostering a diverse — and discrimination-free — work environment can help you avoid avoid these costs.

Multiple studies have shown that businesses with more diverse workforces make more money — a lot more money. Recent research from McKinsey found that companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have above-average financial returns than those in the bottom quartile. For gender diversity, it was 15 percent. Furthermore, for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes rose by 0.8 percent.

If you want to see some really impressive numbers, consider this: Organizations with the highest levels of racial diversity had 1,367 percent higher mean sales revenue than those with the lowest levels. And those with the highest levels of gender diversity had 1,325 percent higher mean sales revenue than the lowest level businesses. That is a mind-blowing disparity, and it clearly points to the financial importance of a diverse workforce.

Diversification Made Simple

So we know why diversity is important, but how do we go about fostering it? It starts with making sure recruiters aren’t continually fishing in the same ponds, leaders aren’t hiring employees in their own image, and that day-to-day company routines don’t encourage conformity and convention. Once you achieve those basics, you can expand by:

• Advocating for diversity awareness
• Creating resource groups for different communities that hold regular events
• Providing cultural sensitivity and unconscious bias training for both employees and management
• Improving diversity in recruiting by offering partnerships and scholarships

If your workforce doesn’t reflect the diverse, multicultural society we live in, you have a serious issue on your hands. To be truly successful, you absolutely must have a diverse team to embody the wisdom, experiences, and perspectives of your customer base — and that will give you the competitive edge you need to truly mark your place in the global market.

 

Guest Contributor: Liz Greene is a writer, marketing professional, and full blown pop culture geek from the beautiful City of Trees, Boise, ID. When not stalking the aisles of her local Ulta, she can be found shoveling down sushi while discussing the merits of the latest Game of Thrones fan theories. You can follow her on Twitter @LizVGreene, or check out her latest post on Three Broke Bunnies.

 

 

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