How does diversity impact business?
Diversity isn't a new topic in the business landscape; the conversation surrounding the undeniable need for natural diversity in the workplace has been going on for some time. It has become more apparent that its importance continues to grow with time.
More businesses are looking for ways to create a more diverse workplace, and even more, they should follow suit if there is a clear connection between diversity and profitability for no other reason.
How important is diversity?
Let's take a look at the statistics; a study by McKinsey & Company titled, ˜Diversity Wins: How Inclusion Matters, puts it all into perspective. The report reveals that all kinds of diversity, including gender, cultural and ethnic diversity in corporate leadership, directly tie into the success of businesses.
Here are some of the key findings:
Companies that rank highest in gender diversity ran at a 25% average higher chance of more profitability than companies that ranked lowest. This number has increased from the last study, conducted in 2017.
The study also revealed that the organizations with women executives in the range of 30% had a higher chance of achieving more profitability than organizations with less.
Companies with more diversity in culture and ethnicity also had a higher chance of being more profitable. The study revealed that they had a 36% higher chance of being profitable than companies with lower diversity levels.
How does diversity impact business?
Organizational Culture
Diversity in the workplace means a more comprehensive range of varied human resources. This is especially the case when you have a cognitively diverse workforce.
According to the Harvard Business Review, the more cognitively diverse your workforce is, the higher your chances of enabling that workforce to have diversity in how they think and act. This leads to finding more creative solutions and ideas.
Organizations must foster a culture of acceptance, not just of different types of people but also of other approaches, varying thoughts, and processes.
Internationalization of business
Companies with people from varying backgrounds improve their chances of becoming global companies. It becomes easier for them to expand their reach to international markets from the immediate area of operations.
You add different kinds of knowledge, some of which are likely intimate to certain cultures or regions. You add access to foreign languages.
This means you can reach a wider audience. The varying nuances of the global market can be learned and incorporated into your business strategy, which is the kind of knowledge you can capitalize on by having a more diverse workforce.
These different perspectives allow solutions to be approached from multiple angles, leading to quicker decisions.
Talent Attraction
A study by Deloitte revealed that 83% of millennials feel actively engaged in organizations that create a culture of diversity and inclusion. A workplace culture that values and promotes diversity and inclusion has become a more desirable workplace.
When your company culture is good and resonates with your existing employees, you create opportunities to attract even better talent.
Here are a few results of having a diverse and inclusive workplace:
- More Varying Diversity of Thought and Creativity
- Increased Access to Varying Markets
- Improved Innovation
- Increased Productivity as a result of Increased Engagement
- Better Profits as a Result of Higher Productivity
While the benefits of having a more inclusive and diverse workplace, in every aspect, have definite impacts on businesses, this area still deserves a lot of focus.
Organizations are prioritizing such initiatives; however, the fact is that these changes are taking time.
Marked differences will be seen across markets and the globe when every organization realizes that it isn't merely about becoming a part of a movement but that diversity and inclusion are essential to maintain their competitive edge.
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