Choose your country site

Why workplace diversity is essential for your business

Home > Insights > Expert Opinion > Why workplace diversity is essential for your business
Expert Opinion
March 7, 2022
5/5 - (1 vote)
5/5 - (1 vote)

Diversity in the workplace has risen up the business agenda. This is in response to wider societal change and the growing evidence of a diversity dividend in company performance.

The diversity agenda itself has widened too. Employers now need to be cognisant of various groups and minorities who face discrimination.  For example, on the grounds of their gender, ethnicity, sexual orientation or identity, religion, culture, physical disability, or neurodivergence.

How to define equality

A stated commitment to being an ‘equal opportunities’ employer is not sufficient. Even if supported by the appropriate HR policies and compliance with statutory nudges, such as the gender pay gap.

Safeguarding the rights at work of such a diverse range of people and groups may seem daunting given the need to engage with unfamiliar and what may seem sensitive issues.

Going further, fully embracing diversity to ensure a genuinely inclusive workplace is undoubtedly challenging.

But promoting diversity and inclusion in the workplace is not just the right thing to do morally; it makes sense for hard-headed business reasons too.

Why workplace diversity matters

Companies are competing for talent and many experience skills shortages. Those that fail to attract applicants from the broadest possible range of backgrounds, or assess them fairly, put themselves at a disadvantage as well. Similarly, if certain employees feel excluded, the employer pays a price in lost productivity and higher staff turnover. Moreover, there is a further opportunity cost. Effectively integrated and balanced teams enjoy higher morale and job satisfaction, plus they tend to be more creative.

A substantial body of evidence shows the impacts of diversity and inclusion on business performance. An often-quoted McKinsey study found that companies with more ethnically diverse workforces were 35% more likely to have above-average profit margins than those whose employees were most homogenous. Deloitte reported in 2015 that diverse companies had a cash flow per employee over three years nearly two and a half times higher than non-diverse firms. In an analysis of 500 top US companies, the top 20 most diverse outperformed the least diverse on both share price and operating results over both five- and 10-year periods. Other research in the US and Europe has shown how balancing the gender of leadership teams produces a positive shift in strategic thinking, risk management and value creation.

The key lesson is that diversity and inclusion confer a competitive advantage, not least in innovation. Diversity of thinking and pooling of ideas is a well-spring of creativity. This enhances innovation, helps companies spot risks, and increase buy-in to decisions.

Diversity training at work

Promoting diversity and inclusion requires a multi-pronged approach. You must back up training by revamping hiring practices, normalising flexible working, and analysing HR metrics.

Training too must be inclusive and mandatory for all employees, starting at the top. Consequently, leaders should listen to the lived experience of staff from minorities to inspire commitment to change and openness.

Tailoring unconscious bias training to the organisation can help avoid reinforcing stereotypes and the mixed results reported in some studies. It helps to integrate a consistent message in different forms and stages, from microlearning and inductions to wellbeing initiatives and webinars.

Ultimately, the aim is to shift or clarify the culture of the organisation so that it shapes attitudes and behaviours, values the contribution of different people, and delivers the dividends of true diversity and inclusion.

Show comments

No Comments

Leave a Reply

Your email address will not be published.