For businesses that intend to compete on a global playing field, a workplace – and workforce – that reflects a diversity of generations, cultures, values and thinking is a prerequisite to success. In fact, any business, whether it has a local, regional, national or global footprint, will be better off with a diverse base.
Studies back this up. Every 1 percent increase in ethnocultural diversity by Canadian companies correlates to a 2.4 percent gain in revenue and a 0.5 percent increase in productivity, according to a new study by the Centre for International Governance Innovation, in Waterloo. Another study by MIT found that shifting from an all male or all female office to one evenly split among genders can boost revenue by as much as 41 percent.
There’s a lot more to workplace diversity than male/female, ethnicities, and age. It encompasses all those but more – cognitive style, education, countries worked in organizational function and background.
Workplaces are growing markedly more diverse as forces like technology and other advances tend to shrink our world. Smart companies and organizations encourage the trend because of the benefits a diverse base creates.
Hiring executives understand this, says Zabeen Hirji at Royal Bank of Canada (RBC). They are increasingly scrutinizing their practices to ensure they are not inadvertently missing out on the full scope of talent that’s best equipped to help them grow. A diverse workplace is something to be celebrated and learn from as it poses a competitive advantage over the long term.
The benefits are both tangible and intangible. Among them:
1. Improved productivity.
This occurs when people with different backgrounds and knowledge bases infuse new thinking into organizational processes and procedures. Employee engagement can improve, motivating people to work more effectively and efficiently.
2. More creativity.
There’s a cross fertilization of thought and ideas when heterogeneous groups interact. They have different ideas on the host of solutions that can be employed to achieve common goals. A diversity of cultures, education and backgrounds equips employees with different problem solving skills. That enriches brainstorming, and sparks greater innovation.
3. Employees who are more invested in the company.
Organizations that have a richer mix of people also become more dynamic. That’s something employees take pride in and it leads to greater commitment and loyalty.
4. A sharper competitive edge.
A wide array of talented individuals from varied cultures will create a substantial edge over less diverse businesses with their understanding of cross-cultural issues and ability to overcome language barriers.
5. Extended market reach.
A diverse staff provides the insights it takes to successfully identify with and reach different demographics. The diverse organization is better able to speak the right language – literally and figuratively – of prospective customers.
6. Improved tech savvy.
When the workforce is comprised of people with different backgrounds and job experiences and of different ages (like Millennials who cut their teeth on tech), the organization has the advantage of their familiarity and comfort level with tech and social platforms. It’s a great advantage in staying ahead of the times.
7. Easier talent recruitment, retention.
Organizations that have embraced the concept of diversity create the kind of positive associations that grow strong brands and reputations. Those are the kinds of companies that people want to work for and want to build their careers with over the long term.
Human capital is essential to building businesses that are dynamic and thrive in today’s fast changing environment. It’s the smart businesses that recognize that what gives human capital the largest share of its value is the diversity that characterizes it.
Extended market reach is probably one of the most important benefits of having a diversified workplace, especially if you are an international company who’s targeting two or more countries. Nothing beats the knowledge of someone who was born and raised in the country you’re targeting when you are a foreign company looking to expand your reach.
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