What are the benefits of diversity in the workplace?

Even though diversity has been a hot-button topic in the American workplace for many years, there is still significant room for improvement.

The Diversity Landscape in the U.S.

According to Glassdoor’s Diversity & Inclusion Study 2019, just over 60% have experienced or witnessed workplace discrimination based on age, gender, race, or LGBTQ status. Specifically, over 40% have experienced some form of ageism, gender discrimination, and/or racism. Seventy-seven percent of the employees surveyed also mentioned their employers have a diverse workforce. Sixty-four percent of employees said their employers have invested more in diversity and inclusion now than they previously had, while 55% state they could be doing more.

According to Glassdoor’s 2020 Diversity & Inclusion Workplace Survey, 32% of job-seekers wouldn’t apply at a company lacking in diversity, and 37% said they wouldn’t apply at a company with ethnically/racially-driven disparities in satisfaction ratings. Seventy-one percent of those polled also admitted they would be more likely to share their opinions on diversity and inclusion at their companies if they could do so anonymously.

According to Glassdoor Economic Research, diversity and inclusion job openings on Glassdoor increased by 37% between August 2018 and 2019. The industries leading this charge included education, healthcare, government, banking/financial services, and technologies.

PwC’s 2019 annual corporate directors survey also revealed plenty of perceived organizational advantages on an executive level. Some of these benefits include unique perspectives, board performance enhancements, improved investor relationships, and better company performance.

The Benefits of Workplace Diversity

Employers and employees across a range of industries enjoy the benefits of diversity.

5 Benefit for Companies

The first benefit for companies stems from the different talents, experience, and skill sets that come from a diverse group, which can help companies develop creative and innovative solutions. Without diversity, a homogenized group may use standard approaches to problem-solving, which can stifle innovation.

A second benefit demonstrates a correlation between increasing the diversity of leadership and improved financial performance. A Boston Consulting Group study demonstrated companies with above-average leadership diversity receive a greater payoff from innovation and higher EBIT margins.

Workplace diversity among venture capital firms also supports increased overall fund returns each year, as well as more profitable exits. Operating in a highly uncertain competitive environment requires creative thinking to develop unique solutions that will ensure a company’s survival and growth.

Additionally, supporting workplace diversity helps attract and retain talent. Studies show 32% of millennials and Gen-Z employees believe businesses should try to improve society, such as by reducing inequality or leading diversity initiatives. Given that 75% of the workforce will be millennials in 2025, employers must prioritize diversity.

Finally, workplace diversity boosts a company’s reputation and brand. Companies promoting diversity are considered friendlier and more socially responsible.

5 Benefit for Employees

One of the chief employee benefits of diversity correlates to the notion that diverse teams and companies provide a variety of ideas, perspectives, and learning opportunities that offer employees a richer experience. Employees enjoy collaborating with diverse co-workers and learning about their backgrounds.

Another benefit diversity brings is an increase in innovation and creativity. This can help motivate employees, foster camaraderie, and ultimately promote team unity.

Diversity in the workplace can also lead to faster problem-solving. A study published by the Harvard Business Review found that higher cognitive diversity correlates with better performance.

Additionally, workplace diversity leads to better decision-making. A study that analyzed 600 business decisions made by 200 teams found that the decision-making of diverse teams outperforms individual decision-making up to 87% of the time.

Finally, diversity in the workplace may increase employee engagement. Employees are more likely to be engaged when they feel included.

How Companies Can Support Diverse Employees

Companies that claim to support diversity typically fail to meet the unique needs of specific individuals, such as females, employees of color, and LTBQ individuals.

Diversity Efforts That Make a Difference

A 2018 Boston Consulting Group survey identified the most effective diversity measure for female employees, employees of color, and LGBTQ employees. Diversity measures for female employees include parental leave for adoption, child-care options, and flexible work programs. Diversity measures for employees of color include implementing a bias-free day-to-day experience, offering appropriate healthcare coverage, and blind screening and diverse interview panels. LGBTQ employee measures also include implementing a bias-free daily experience and offering appropriate healthcare coverages. LGBTQ employee diversity measures also include structural interventions, such as gender-neutral bathrooms.

Building a Better Workforce

The first step in developing an effective diversity program is identifying the individual needs of employees. Armed with these insights, employers will be better able to create diversity initiatives that are empowering and supportive of diverse individuals.

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