Can workplace diversity be considered an actual competitive advantage or is it just the latest buzzword and something companies tend to boost about to improve their reputation?
I’m sure that you’ve noticed that there are plenty of articles online, as well as plenty of companies that are constantly hyping up the fact that diversity within the workplace has absolutely fantastic benefits.
In this blog, I’ll tell you all about the variety of benefits diversity within the workplace can bring to your teams and company as a whole, as well as how to effectively convince your hiring managers that diversity is not just nice to have. In fact, it’s a must-have.
P.S. Being aware of the statistical benefits that diversity can bring is necessary, but how to get started with creating a hiring process, company culture, and working environment that is diverse & inclusive?
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What is diversity in the workplace?
What are the first few things that come to your mind when you think of diversity in the workplace? Probably demographics.
However, diversity is more than just demographics. It’s EVERYTHING that makes us human.
Diversity in the workplace can include gender & gender identity, cultural diversity, ethnicity and race, sexual orientation, age/generational diversity, neurodiversity, personality, skill diversity, ensuring inclusivity when it comes to people with disabilities and so on. These are only 9 types of diversity in the workplace, but by no means are they where the list ends.
The thing however is, that some people tend to think that diversity in the workplace is simply a buzzword. But is it?
Workplace diversity – a buzzword or an actual competitive advantage?
Workplace diversity and ensuring it seems to be something that everyone is talking about nowadays. Yet, one point of discussion still remains – is it a buzzword or an actual competitive advantage?
It is clear that everyone wants to hire more diverse talent, but a lot of companies can’t really explain why or how exactly they are doing it. “If everyone does it, I should too” is about as deep as the explanations go. By no means it is not such a bad thing that companies all across the globe have begun to care about diversity. After all, it’s not only the right thing to do from a societal point of view, but it moreover has a multitude of benefits.
However, sadly, many companies tend to focus on diversity for the wrong reasons:
- ‘’Because I need to meet a diversity quota.’’
- ‘’Because I need to enlarge my talent pool in this War for Talent.’’
The reality is that caring about diversity is more than just making superficial gestures to attract talent and setting up quotas…
Diversity is not only an act of Corporate Social Responsibility but also a proven business case. It should be everyone’s top priority. Not yet convinced?
Well, here are 13 benefits diversity in the workplace will bring to your business.
Benefits of diversity in the workplace based on data
It’s clear that creating a workforce that is diverse takes a lot of time, effort, as well as patience. Yet, I’m sure you know that without investment there are no benefits. Therefore, it’s important to become first and foremost aware of the multitude of benefits workplace diversity can bring.
We will focus on the benefits of diversity classified under the three following categories:
- Improved performance from a diverse workforce
- Benefits of workplace diversity on a company-wide level
- Positive effects of workplace diversity on talent attraction
Improved performance as a result of diversity within the workplace
1. Diversity leads to more creativity within teams
Research has shown that there is indeed a strong relationship between diversity in culturally diverse teams and overall team creativity! The more diverse your teams in terms of characteristics, backgrounds, skills and experiences, the more increased the likelihood of generating a wider range of new and fresh ideas.
Ultimately leading to a significant competitive advantage in your industry because creativity is what drives growth, therefore making it vital to any business. After all – two differently thinking minds are better than two minds that think the same! 😉
2. Diverse teams are better at solving problems
Diversity not only leads to higher creativity within teams but also to improved problem-solving. Research by HBR has shown that if your workplace is diverse, especially cognitively diverse, your employees will be better at solving problems than within teams in which there are only cognitively similar people.
3. Teams that are diverse make better business decisions 87% of the time
The more diverse the team, the more informed and improved their decision-making processes and overall results. Additionally, a white paper by Cloverpop also discovered that if your teams are diverse and inclusive, they are capable of making better business decisions twice as fast as teams that are not.
4. Diverse companies report productivity levels that are 32% higher than their peers
Productivity is important in every sphere of life, especially when it comes to the efficiency of employees and the overall quality of the work they do. By fostering diversity within the workplace, you can ensure that your employees are capable of working better as a team which leads to higher productivity levels and an overall boost in collective confidence.
Benefits of workplace diversity on a company-wide level
1. Diverse companies are 35% more profitable than non-diverse companies
Companies with high levels of racial and ethnic diversity are 35% more likely to report above-average financial returns. On top of that, companies in which the executive teams are diverse, as suggested by McKinsey, are 25% more likely to generate greater profits than companies that lack diversity within executive teams.
So, if your teams are diverse, they will be better at dealing with challenging work environments, as well as adversity, and as a result, increase their overall performance levels.
2. Diverse companies are 70% more likely to capture new markets
According to research conducted by the Harvard Business Review, teams and companies that are diverse in terms of composition are 70% more likely to capture a new market than firms that are not diverse.
Think of it this way, not only does diversity increase your teams’ innovation and creativity. Through different skill sets, language knowledge and perspectives, it also allows you to open the door the new markets faster and more successfully.
3. Companies that have diverse management teams have a 45% increase in revenue directly related to innovation
The more diversity, the more innovation within companies. When your teams are built on the basis of hiring people with different perspectives, past experiences, as well as mindsets – they will be more likely to come up with disruptive and innovative solutions to various problems.
A study by BCG suggests that especially diversity within leadership and management teams can lead to more and higher levels of innovation, which in result lead to improved financial performance.
4. Workplace diversity leads to 68.3% improved employee retention
Workplace diversity is also beneficial for employee retention: if everyone feels included, accepted and valued for who they are, you will lower your turnover rate.
5. Diversity and inclusion leads to engaged employees
Creating workplaces that are diverse and inclusive leads to happier and more engaged employees. If your employees are working within an environment in which they feel like they can bring their authentic selves to work every day without being discriminated against – there will be a massive boost in overall employee morale to work.
Research by Deloitte found that the combination of diversity and inclusion within a workplace leads to the highest levels of employee engagement – 101%!
6. A diverse workforce improves company culture
If your workplace is diverse and inclusive, it will leave a positive impact on your organizational culture.
When interacting with people from different backgrounds, nationalities, views, beliefs and from different life stages, your employees will be able to form better awareness of each other’s world views. This way raising the awareness surrounding the importance of constant exchange of opinions and thoughts, as well as the crucial role that diversity plays within the workplace.
This is how workplace diversity can improve your talent attraction
1. 76% of job seekers are looking at diversity when making a final decision about accepting a job offer
In a Diversity Hiring Survey by Glassdoor, when looking for a new job place, the first thing that job seekers tend to take a look at is whether the workforce at the company is diverse or not. Basically, this means that every job seeker wants to know whether you as a company are motivated to work on your diversity goals from a genuine or commercial point of view.
Long story short – if you don’t practice what you preach – you’ll miss out on the diverse talent!
2. Diverse companies attract 73.2% more top talent than non-diverse companies
I’m pretty sure (or at least I hope so) that the vast majority of companies out there understand and truly value the importance of workplace diversity and inclusion. Many are implementing hiring practices that are fair and attempting to provide equal opportunities for everyone that applies. While previously this might have been something to do as a formality on a surface level (to look good), now it has become a conscious effort to actively look for people from all walks of life.
Companies that continuously and actively showcase their commitment to DE&I and can back it up with actual real-time results are the companies that are the most in-demand by candidates. And after all, in a primarily candidate-driven market – ensuring that your company is a company where people want to work begins with making each candidate aware that they are valued & appreciated for who they are.
A report by McKinsey highlights that diverse companies not only are better at decision making and have increased employee engagement but also are better able to attract and retain top talent. Creating equal opportunities starts with you and there is no better way to attract today’s top talent than by focusing on diversity.
3. Being committed to ensuring diversity leads to a positive reputation of the Employer Brand
Companies that are striving towards diversity are companies that are trying to make the world a better place simply because it’s the right thing to do. Without a doubt that leaves a positive impact on their reputation within the job market – because who would want to work for a company that does not value diversity? Not me and I bet you wouldn’t either.
By choosing to create, prioritize and consciously work on fostering an Employer Brand that values diversity, you are 250% more likely to have a highly effective hiring process.
3 ways to convince your hiring manager that workplace diversity is a must-have
Make diversity and inclusion tangible
Encourage them to take a look at the current situation when it comes to workforce diversity within the company – highlight that perhaps there is a lack of gender or demographic diversity. When presented with information like this, it’s likely the hiring manager will be more keen on taking action to ensure the teams they are creating are actually diverse on all levels.
Use statistics to back up your claims
Share with your hiring manager how exactly diversity, creativity, and better business performance are interconnected. Provide real-life examples and statistics to back up your claims about the benefits workplace diversity can bring to your company. Highlight the benefits of workplace diversity loud and clear, and feel free to use this blog as your guideline containing statistical benefits of diversity in the workplace can bring to your company.
Emphasize their role in ensuring D&I
Explain that striving towards ensuring a workplace that is diverse starts with the hiring manager, they are after all the ones who get the final say. Make them feel important (as they are and should be) because they are the individuals that are capable of creating teams that excel and are future-proof.
How can you know whether your DEI efforts are paying off?
The only way to assess whether something is working or not is by setting up the right metrics to track progress. Also when it comes to DE&I. Diversity and inclusion metrics allow you to gain valuable insights into your current workforce dynamics. On top of that allowing you to continuously assess your progress when trying to ensure inclusive hiring practices.
Now, we suggest starting with 4 diversity & inclusion metrics:
- Diversity of employees vs. application pool. By taking a look at the differences in terms of diversity amongst your applicant pool and who actually gets hired, you’ll be able to determine whether your DE&I efforts are actually paying off.
- Diversity across organisation levels. While the overall composition of your workforce might be diverse, it’s important to measure the percentage of women in comparison to men in C-level positions, for example.
- Employee job satisfaction. Not only does it reflect how well they are integrated within the company culture, but also whether they feel supported if they are facing various workplace issues such as discrimination, bullying and so on.
- Employee retention rate. Similarly, as employee satisfaction, an employee retention rate can tell you a lot about whether your workplace is inclusive or not.
Struggling to attract diverse talent?
You don’t want the best of the best talent; you want the best of the right talent! If you’re struggling to build a diverse pipeline, there’s a few thing you can do, Róisín Phelan from our partner ISL Talent shares 4 simple ways in which you can improve your recruitment process to attract diverse talent:
- Build a strong employer brand that reflects your values
- Make sure to define a clear and attractive company culture
- Think about where your ideal candidate hangs out online – social media is an important tool
- Don’t forget that building a diverse talent pipeline is not going to happen overnight.
How Equalture can help
Here at Equalture, we firmly believe in the power of technology to help overcome the greatest challenges – and ensuring DE&I can definitely be one of them. We are also deeply passionate about removing bias from the hiring process.
In order to achieve this, by using neuroscientific games you can objectively reveal the skills and behaviors of both your current team and your candidates, with the aim to judge people based on science instead of a gut feeling.