In this era of globalization, diversity in the business environment is about more than gender, race, and ethnicity. It now includes employees with diverse religious and political beliefs, education, socioeconomic backgrounds, sexual orientation, cultures, and even disabilities. Companies are discovering that, by supporting and promoting a diverse and inclusive workplace, they are gaining benefits that go beyond the optics.
The business has the transformative power to change and contribute to a more open, diverse, and inclusive society. We can only accomplish this by starting from within our organizations.
Many of us know intuitively that diversity is good for business. The case for establishing a truly diverse workforce, at all organizational levels, grows more compelling each year. The moral argument is weighty enough, but the financial impact – as proven by multiple studies – makes this a no-brainer.
Diversity and financial performance in 2017
In the original research, using 2014 diversity data, it is found that companies in the top quartile for gender diversity on their executive teams were 15 percent more likely to experience above-average profitability than companies in the fourth quartile.
For ethnic and cultural diversity, the 2014 finding was a 35 percent likelihood of outperformance, comparable to the 2017 finding of a 33 percent likelihood of outperformance on EBIT margin; both were also statistically significant
The Benefits of Racial and Ethnic Diversity in the Workplace
Companies increasingly understand the value of recruiting and retaining diverse employees, as these workers play a critical role in a company’s ability to adapt, grow and sustain a competitive advantage in the modern business landscape.
However, some companies fail to recognize the benefits of having a racially and ethnically diverse workforce. Factors such as prejudice and stereotypes towards certain racial or ethnic groups, whether conscious or unconscious, can lead to discriminatory practices in hiring.
The benefits of a racial and ethnically diverse workplace are:
Gains in worker welfare and efficiency
Reduced turnover costs
Fewer internal disputes and grievances
Improved accessibility to new and diverse customer markets
Higher productivity and increased revenue
Increased innovation
Development of new products and services
Improved company reputation management
Greater flexibility and adaptability in a globalized world
More efficient risk management (e.g. legal risks due to non-compliance)
A multicultural workforce can give an organization an important edge when expanding into new markets. Often, a product or service needs to be adapted to succeed overseas. Understanding local laws, regulations, and customs, as well as the competitive landscape, can help a business to thrive. Moreover, local connections, native language skills, and cultural understanding can boost international business development exponentially.
Types of workplace diversity
Diversity and inclusion (D&I) initiatives are aimed at eliminating obstacles and bringing people from these groups into full participation in the workforce. Understanding the opportunities these groups provide and the challenges they face is critical to building an effective D&I strategy. Examples of different types of workplace diversity follow.
In HR terms, there are a few primary types of diversity characteristics to bear in mind [6]:
Gender – women make up a bigger percentage of the workforce than ever before. But there is still a gap in terms of fair pay and the percentage of women in leadership roles.
Race and ethnicity – as ethnic and racial identities evolve, standardized forms with ethnic groups fail to hit the mark. Opening the conversation with employees and candidates on race and ethnicity goes a step towards improving cultural diversity.
LGBT – the LGBT community includes a complex range of people in terms of backgrounds, experiences, and challenges. To work towards eliminating discrimination, careful attention needs to be paid towards a strategy as an LGBT employer.
Age – both younger and older workers can be discriminated against in terms of preconceptions. Through steps like opening apprenticeships to all ages and providing cross-generation mentoring programs, these prejudices can be addressed.
Workers with disabilities – disabilities can cover many differences, from the ability to form social relationships to physical disabilities. Part of this can be helped with neurodiversity programs, as well as fighting against negative perceptions.
Mental health – focusing on mental health along with workplace wellness support can combat a variety of issues, from absenteeism to behavioral problems.
Neurodiversity – recognizing and providing a supportive environment for those with neurological differences that include dyslexia, autism and Tourette’s helps organizations to celebrate differences and the benefits they can offer in well-matched job types.
Cognitive Diversity and Thinking Style
Everyone has the potential to bring a different perspective to an organization. Drawing from a workforce with a diversity of thought and background, companies can assemble more effective teams, tackle difficult tasks, and drive innovation.
While the diversity of thought is an open area that does not lend itself to tracking and measuring that can be done with formalized diverse groups, an increasing portion of workers, most notably Millennials, value coworkers with diverse views.
Removing bias from all aspects of the employee experience enables many workers with unique views and perspectives to advance. Moving forward, this category has the potential to lead the redefinition of what diversity and inclusion in the workforce means.
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