A diverse workplace benefits companies in multiple ways such as increased productivity, competitive advantage and better problem solving just to name a few. Here’s why the impact of diversity in the workplace is so significant.
As companies scale and reach beyond borders to make a significant impact, their workplaces and organizational structures must align with their global ambitions.
Diversity in the workplace encourages businesses to allow people with different qualities and backgrounds to work together in a productive, collaborative, and fair environment. Everyone benefits when individuals with different perspectives, beliefs, and skills work toward a common goal.
Diversity in the workplace considers employees’ race, religion, gender, sexual orientation, ethnicity, and other factors. Rather than emphasizing tolerance for differences, a truly diverse workplace encourages appreciation for different attributes and viewpoints. This helps create a community where everyone feels valued for who they are, and a wide range of views helps positively shape the work environment.
As corporations focus on sustainable practices concerning environmental, social, and governance (ESG) issues, the importance of workplace diversity increases. Companies can demonstrate their good social stewardship by implementing a hiring process that emphasizes fairness and inclusion and ensuring people with widely differing backgrounds and perspectives have their voices heard. As noted by the World Economic Forum, diversity makes the workplace more competitive, leading to improved business performance.
The impact of diversity in the workplace is demonstrably positive in many ways, including improved business performance and a supportive company culture that leverages differing perspectives and life experiences.
Here are a few ways in which workplace diversity benefits the workplace:
According to a 2019 McKinsey study, companies in the top quartile for gender diversity on executive teams had a 25% greater likelihood of more-than-average profitability than those in the lowest quartile. That figure surged from 21% in 2017 and 15% in 2014, demonstrating how workplace diversity increasingly affects financial performance.
Companies with a diverse workforce typically have more creative and innovative teams. That’s because cultural diversity in the workplace brings unique perspectives to problem-solving, helping find creative solutions that work. People with different backgrounds and unique characteristics comprise the general population. The more diverse a team is, the better it can understand and meet the needs of various groups. For corporations looking to innovate and stay ahead of the competition, diverse teams can help them reach that goal.
A diverse, inclusive workplace improves opportunities for professional growth, as people with unique characteristics enhance and inform each other’s perspectives. Employees from different cultures can share information and experiences, improving their teams’ know-how and problem-solving methods. A diverse workforce allows a better understanding of the world as a whole, helping employees find new avenues for individual and collective growth.
Teams with diverse members make better decisions than less-diverse ones due to their variety of viewpoints and abundance of information. As teams become increasingly diverse, so does their ability to make sound decisions. Such teams exhibit fewer built-in biases and may better understand the many demographics worldwide. This contributes to improved decision-making.
When companies hire diverse employees, they have an array of perspectives to draw from. Much like an artist who benefits from a broader palette, team diversity creates opportunities and opens doors to avenues that won’t be available in homogeneous workplaces. While a striking variety in perspectives may seem daunting sometimes due to the risk of conflict, time and time again, its benefits have outweighed any potential problems.
Companies looking to promote diversity in the workplace should strive to build teams comprised of various voices and skill sets. According to the World Economic Forum, employees who experience intersectionality and belong to more than one underrepresented demographic often experience a sense of lack of opportunity and could benefit the most from diversity and inclusion at their workplace.
When introducing diversity in the workplace, it’s important to consider these different aspects:
This of course is just a partial list, as companies should vary their workforce with employees from different sexual orientations, gender identities, social-economic backgrounds, experiences and more.
Challenges of diversity in the workplace may slow down or inhibit its many benefits. But finding ways to address them can smooth out the process.
Here are a few ways to proactively address potential barriers:
To summarize, a diverse workplace benefits companies in multiple ways, including improved financial performance, advanced innovation and more opportunities for professional development. It also shows a commitment to fairness and social issues, increasing the chances for a better ESG score.
*Disclaimer: This summary is for general education purposes only and may be subject to change. ESGgo, Inc., and its affiliates (the “Company”, “ESGgo”, “we”, or “us”) cannot guarantee the accuracy of the statements made or conclusions reached in this summary and we expressly disclaim all representations and warranties (whether express or implied by statute or otherwise) whatsoever.