As succeeding in the global economy becomes more and more challenging, companies must look for new competitive advantages. It is becoming increasingly evident that one of the best ways for organizations to maintain their relevance and solidify their future profitability is to embrace workplace diversity.
A company that encompasses a workforce of different genders, experiences, cultures, ages, races, ethnicities, educational backgrounds and religions will have a broader range of experience, skills and ideas from which to draw. In turn, these diverse perspectives will help drive a corporation’s ability to evolve and innovate.
Workplace Diversity Is the Way of the Future
Over the past few decades, globalization has become a way of life for governments, citizens and corporations throughout the world. Globalization has not only led to an expanded international economy but also to the spread of awareness of different cultures and ideologies. Increases in international trade and the ease of travel for business and pleasure, as well as the expansion of the internet and the dominance of social networking, have resulted in an unprecedented cross-pollination of people, places and public and private enterprises.
Immigration has likewise increased. A 2015 Pew Research Center study reported that in the next 50 years, immigrants and their descendants will be the biggest driving force in U.S. population growth. By 2065 immigrants are expected to account for 88 percent of the U.S.’s population growth. In the study, a Pew researcher states that “The big picture is that immigration has been the major demographic factor driving growth and change in the U.S. population over the last 50 years.”
Given these statistics, it will be imperative for organizations to prioritize workplace diversity and embrace diverse perspectives in order to remain relevant to consumers. After all, how can a company sell a product or deliver a service to a group of people it does not understand? To be able to tap into the needs and wants of present and future consumers, corporations will need to both reflect and understand an increasingly multicultural populace or risk stagnation. Never has the business mantra “evolve or die” been more relevant.
Diverse Perspectives Can Drive Creativity and Profitability
It may seem obvious that workplace diversity is inevitable as society becomes less homogenous. What is perhaps less obvious are the significant benefits of an inclusive workplace.
A report entitled “Diversity Matters” by McKinsey & Company, a worldwide management consulting firm, found that companies that embraced diverse perspectives and eschewed a homogenous workforce experienced higher financial returns than their competitors. McKinsey & Company found that organizations with gender diversity were 15 percent more likely to financially outperform competitors. Furthermore, companies with an ethnically diverse staff were 35 percent more likely to outperform rivals.
The report states that “Our latest research finds that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns. … 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.”
Not only did the report find that these companies enjoy better returns, McKinsey & Company also theorized that enterprises that support workplace diversity experience higher customer and employee satisfaction.
A study by Forbes entitled “Fostering Innovation Through a Diverse Workforce” also supports the benefits of embracing an inclusive workforce. The report, based on a survey of 321 executives at a variety of major global corporations, found that companies that fostered workplace diversity were more innovative. This innovative spirit led to the creation of new products and services and business processes. A diverse collection of people with differing backgrounds and cultures fosters a unique and energized working environment that in turn produces dynamic products and services.
The Best Talent
Organizations with diversified employees can attract the most talented executives because companies with heterogeneous staff appeal to a wider array of candidates from around the world. A recent study by Glassdoor found that 67 percent of respondents “said that a diverse workforce is an important factor when evaluating companies and job offers.”
Not only do corporations that promote workplace diversity have their pick of the best executive talent, they can also retain those top employees. Research shows that companies that have more inclusive staffing policies have a healthier work environment and that a positive work environment leads to a decrease in staff turnover.
Given that the world — and hence the economic landscape — is becoming more and more interconnected, it seems logical that companies that understand and reflect our ever-increasing global melting pot will be best poised to dominate the marketplace.
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Sources:
McKinsey & Company: Why diversity matters
Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce
Entrepreneur: The Myriad Benefits of Diversity in the Workplace
Reuters: Immigrants will drive U.S. population growth in next five decades
