The Benefits of a Diverse Workforce
By Dawn Robson
Employers are becoming more aware of the potential benefits of diversity and inclusion in the workplace. These benefits can include, for example, improvements in financial performance, operational effectiveness, workplace environment, customer perceptions and employee loyalty and pride.
Diversity refers to race, gender, ethnic group, age, personality, cognitive style, physical and mental abilities, sexual orientation, education and background. It is both the law and good business practice for organizations to develop systems and practices that ensure the fair treatment of all members of their workforce — including respecting and raising understanding of individual and cultural differences and providing equal opportunities for advancement.
Given that a key objective of businesses is to make money, it should be noted that the 2017 McKinsey report reinforces the link between workforce diversity and company financial profits. This report notes that companies ranked in the top 25% for gender diversity on their executive teams were 21% more likely to experience above-average profitability than companies in the bottom 25% (this was an improvement from 15% in 2014). Similarly, companies ranked in the top 25% for ethnic and cultural diversity, are 33% more likely to realize an EBIT (earnings before interest and tax) margin outperformance than companies in the bottom 25% – which is comparable to the 2014 findings.
In the current dynamic and sometimes volatile economic environment, companies need to adapt in order to grow. Research has found that homogenous staff teams are more likely to provide similar perspectives on a problem. However, diverse groups of employees are more inclined to challenge the status quo by digging deeper into the facts and then processing this information individually. As a result, a diverse team is more likely to come up with, for example, creative suggestions for moving the company in a new director or effective solutions for business challenges.
Additionally, especially in light of the current tight labour market, organizations that don’t consider individuals representing diverse demographics when they are recruiting or promoting can miss out on a significant source of high quality employees. As such, it’s important that your organizational practices do not minimize opportunities for individuals representing one or more demographic segments to enter or move up within the organization. For example, take a look at your position requirements and job posting to ensure that they accurately describe the opportunity and only contain bona fide occupational requirements. You may also need to challenge biases within your recruitment process to ensure that you are not “hiring in your own image” or potentially dismissing a candidate who, for example, has more international than Canadian experience.
Employees with physical or mental challenges can also be strong contributors to organizational success. Working with such individuals to leverage their strengths and capabilities demonstrates a strong level of commitment to their well-being. For other employees, the respectful treatment of differently enabled workers can provide a sense of security and belief that the organization values individual contribution.
As your employee base becomes more diverse, and assuming you have policies and programs in place to properly support inclusion, your employees are more likely to speak well of your organization to family and friends. In turn, this will improve your reputation with job seekers. Additionally, diversity can have a positive impact on how your organization’s brand is viewed by clients and the public, which could lead to increased sales (thus supporting the enhanced financial performance referenced earlier).
Overall, your commitment to, and demonstration of, diversity in the workplace will impact the appeal of your organization. Do what you can to give yourself this tremendous competitive advantage!
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