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Why Workplace Diversity Should Be a Priority in 2017

America is the quintessential melting pot. It’s a nation that has thrived on diversity, and that diversity has arguably played an integral role in our success. When it comes to the business world, there’s a sound body of evidence that suggests that workplace diversity offers major benefits and is something that should be a top priority this year.

 

Increased Financial Performance

A 2015 study from McKinsey & Company found, “Gender-diverse companies are 15 percent more likely to outperform those who lack diversity.” They also found, “Ethnically-diverse companies are 35 percent more likely to outperform their non-diverse counterparts.”

Although workplace diversity doesn’t lead to higher profits in and of itself, it does tend to correlate into acquiring high-level talent, a deeper talent pool, and more effective decision making. In the long run, this can translate into increased employee satisfaction, less turnover, and higher morale. When you combine all of these factors, it’s easy to see how it can positively impact a company’s financial performance.

McKinsey & Company also found, “In the United States, there is a linear relationship between racial and ethnic diversity and better financial performance: for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes (EBIT) rise 0.8 percent.” This is tangible proof that diversity in top positions can noticeably boost your business’s profitability.

 

A Catalyst for Creativity

Imagine two groups. Group one is homogeneous–all team members are of the exact same ethnicity, gender, etc. Group two is heterogeneous–team members differ by ethnicity, gender, and socioeconomic status. Which do you think would have fresher ideas and unique viewpoints?

Workplace diversity is ideal for enhanced creativity and for coming up with solutions to the wide variety of challenges that modern businesses face. Assembling a diverse team can lead to more breakthroughs and is likely to put you at a competitive advantage.

There’s even concrete data that proves there’s a correlation between diversity and innovation. A study from the University of Illinois tested the problem-solving performance between racially diverse groups and non-racially diverse groups. According to their findings, “The groups with racial diversity significantly outperformed the groups with no racial diversity. Being with similar others leads us to think we all hold the same information and share the same perspective.”

 

Additional Benefits

Running your business in a meritocratic fashion where individuals are hired and rewarded based on their abilities rather than their race, gender, etc., offers some other valuable benefits as well:

  • You can expand your talent pool
  • Your business will be better positioned to compete in our increasingly globalized marketplace
  • Increased morale
  • Increased employee retention
  • Reduced language barriers with foreign partners/vendors
  • Improved brand equity

Thriving in the modern business world is all about being adaptable and nimble. What better way to adapt than to place an emphasis on workplace diversity? This can be tremendously beneficial as you move further into the 21st century, fueling the growth of your business.

 

 

The Importance of Workplace Diversity

Of all the countries in the world, not many embrace diversity as much as the United States. In fact, it could be argued that our cultural melting pot has played a big role in our country’s success and ascension to the position of global leader. Likewise, today’s workplaces have become increasingly diverse — and many companies employ individuals from a variety of backgrounds. Let’s examine the concept of workplace diversity and the benefits it can have for businesses.

 

What is Workplace Diversity?

A company with workplace diversity employs individuals from a wide variety of backgrounds who have different characteristics, beliefs and experiences. Some elements that account for workplace diversity include race, gender, religion, sexual orientation, age, thinking style, educational background, etc. Companies with a diverse workplace are usually open to a plethora of ideas in order to further their business and better meet the needs of consumers.

 

The Importance of a Diverse Workplace

There are numerous benefits that stem from diversifying staff members within a company. Perhaps the biggest involves the level of creativity and innovation that often arises when there are multiple viewpoints. In fact, a study from Forbes found “of the 321 companies with more than $500 million in revenue surveyed, 85 percent agreed or strongly agreed that diversity is key to driving innovation in the workplace.”

Another advantage is that it often makes it possible for businesses to appeal to a broader demographic. When there are employees from different backgrounds, this tends to make a company more relatable. In turn, it’s easier to attract more customers and thus increase market share.

It can also help a company acquire high-level talent. By having a willingness to hire many types of individuals, the talent pool grows and can present businesses with opportunities that others lacking workplace diversity may miss out on.

In addition, workplace diversity usually helps a business become more adaptable. By having employees of different ethnicities, cultures, religions, etc., it can better meet the needs of a broad range of consumers and be more competitive. As the world becomes more and more globalized, this can be beneficial to long-term sustainability.

 

Federal Laws on Diversity

There are several federal laws in place that address the issue of discrimination and promote diversity within the workplace. Some primary laws include:

  • Title VII of the Civil Rights Act of 1964, which prohibits employers from discriminating against employees due to race, gender, age and religion
  • The Age Discrimination Employment Act of 1967, which prohibits employers from discriminating against employees 40 years of age or older
  • The Equal Pay Act, which was designed to prevent pay gaps between men and women
  • The Americans with Disability Act, which prohibits employers from discriminating against individuals with disabilities

 

Understanding and abiding by these laws is crucial for employers because failure to do so is an open invitation to lawsuits.

The bottom line is that workplace diversity offers many benefits and is a priority in many of today’s top companies. Staying open to employing individuals from a variety of backgrounds can be the catalyst for positive change and can propel your business into the 21st century.

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