Let me start by saying diversity is not a fad. It is not something that is here today and gone tomorrow. It is something that will continue to be pursued by companies seeking a competitive advantage.
Perhaps we need to begin by defining what is meant by a diverse workforce: a workforce comprising members of different races, ethnicities, genders, sexual orientations, socio-economic statuses, ages, physical abilities, religious beliefs, political beliefs and ideologies.
Both millennials and members of Gen Z — who are the workforce of tomorrow — have diversity as one of their core values. If you expect to attract the best and brightest to your workplace, you had better start taking steps to ensure you have a diverse workforce. A study from Deloitte found that millennials will remain longer with companies that have a diverse workforce. Given the cost of employee turnover, this is a significant consideration.
There are reasons beyond employee attraction and retention to consider when working toward a more diverse workforce. People from different backgrounds bring with them a wide range of experiences and perspectives. This usually leads to surfacing more creative solutions to problems.
More creativity is likely to lead to innovative approaches to problem solving because of the fresh ideas being surfaced by people with different backgrounds and ways of looking at things. Innovation is one of the hallmarks of successful companies.
Here are some interesting things to note:
- A Harvard Business Review (HBR) study found that diverse teams solved problems faster. An HBR article stated, “Tackling new challenges requires a balance between applying what we know and discovering what we don’t know that might be useful. It also requires individual application of specialized expertise and the ability to step back and look at the bigger picture. A high degree of cognitive diversity could generate accelerated learning and performance in the face of new, uncertain, and complex situations.”
- A Cloverpop whitepaper stated that diverse teams “outperformed individual decision-makers up to 87% of the time. Diverse teams were also shown to make decisions faster than individual workers, and benefited from a 60% improvement on decision-making.”
- McKinsey & Company research uncovered the fact that companies that were more diverse had better financial performance. “For companies ranking in the top quartile of executive-board diversity, return on equity numbers were 53% higher, on average, than they were for those in the bottom quartile. At the same time, EBIT margins at the most diverse companies were 14% higher, on average, than those of the least diverse companies.”
Finally, a more diverse workforce can help enhance your company’s reputation as both a good place to work and as a responsible, socially aware business.
If you want your business to be a top performer you need to start now to look at your hiring practices to make sure you are considering a very broad range of applicants. Beyond that, you also need to look at your leadership teams to assess how diverse they are and take steps to ensure there are career paths laid out making it possible for employees from diverse backgrounds to end up in leadership positions in your company.
