In this post, the final of three posts on diversity in the workplace, we examine why diversity is good for organizations and more specifically, how diversity can drive growth.
While diversity in the workplace is sometimes approached as an obstacle (e.g., something one must accommodate), it is important to bear in mind that diverse workplaces in fact have a competitive edge on a myriad of levels. Below, we summarize just some of the reasons why diverse workforces are at an advantage. See our diversity, equity and inclusion (DEI) course library.
Diversity Increases an Organization’s Human Capital
By definition, human capital refers to the knowledge, skills and values that human workers bring to an organization. Diverse workplaces naturally have a greater breadth of knowledge, skills and values on hand than homogenous workplaces. As a result, embracing diversity in the workplace raises an organization’s human resources and this in turn can enable organizations to expand and grow at a faster pace. This also means that prioritizing diversity (e.g., at the level of hiring) often yields a high return on investment over time.
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Diversity Supports Adaptability
On a related note, diverse workforces, which bring workers together from many backgrounds and contexts, are typically more adaptable, flexible and ready and willing to respond to change. After all, a diverse organization is likely comprised of workers who have crossed borders and adapted to different cultures over time and who are subsequently already well prepared to think outside the box.
Diversity is a Way to Tap into a Greater Share of the Consumer Market
Diverse workforces have been proven to be better equipped to tap into larger shares of the consumer market. This is due to two factors. First, consumers often prefer to be served by people with whom they share some common ground. Second, in some cases, a diverse workforce is needed to reach certain markets (e.g., where there are language and/or cultural barriers).
Diversity Increases Access to Qualified Candidates
Recruiting from a diverse pool of candidates naturally gives organizations access to more qualified workers. After all, if one’s recruitment includes men and women or US workers and workers from around the world, chances of finding outstanding talent expand. In short, it is a way to tap into the best and brightest workers from around the world. While working with international workers may require additional support (e.g., on-site language training), a growing number of US businesses are realizing that such short-term investments have long-term gains.
Diversity Supports Employee Retention
Several studies have shown that diverse workplaces support employee retention. Most notably, since workplaces that support diversity are less hostile, they naturally do not experience the turnover that typically plagues hostile work environments (e.g., environments where sexism, racism or homophobia are present). Higher employee retention supports organizations by creating a stable work environment and of course, yields a higher return on investment for one’s recruitment, onboarding and training activities.
Diversity Supports Competitiveness in a Global Economy
Being competitive in a global economy means understanding cross-cultural differences and being able to communicate with clients and customers in multiple languages. Naturally, US businesses that choose to tap into global talent are better equipped to do business around the world and to expand on a global level.
Diversity in Leadership is the Future
Millennials are the most diverse generation yet and all signs point to the fact that the US will continue to become increasingly racially and ethically diverse in the coming decades. Indeed by the end of this century, there will likely be no racial or ethnic majority groups in the US. Today, only a small percentage of organizations are diverse at the executive level. Indeed, despite the fact that many US organizations employ a high number of women and visible minorities, women and visible minorities continue to be grossly under represented in leadership positions and on boards of directors. Organizations whose leadership teams already reflect tomorrow’s diversity are on the leading edge and will no doubt benefit over time.
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