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.”
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.